Present: Koontz, Kinser, Lemons, Goodwyn, Millette, and Mims, 

JJ., and Russell, S.J. 

TB VENTURE, LLC 

 OPINION BY 

 v. Record No. 091621 JUSTICE CYNTHIA D. KINSER 

 November 4, 2010 

ARLINGTON COUNTY 

FROM THE CIRCUIT COURT OF ARLINGTON COUNTY 

William T. Newman, Jr., Judge 

In this appeal involving a taxpayer's petition to correct 

erroneous tax assessments, the dispositive issue is whether the 

taxpayer carried its burden to present evidence establishing the 

fair market value of certain condominium units. Because the 

taxpayer failed to establish the fair market value of each 

individual unit, we will affirm the judgment of the circuit 

court striking the taxpayer's evidence. 

RELEVANT FACTS AND PROCEEDINGS1

The real property at issue consists of 21 condominium units 

owned by TB Venture, LLC (TB Venture) and located in Arlington 

County (the County). TB Venture acquired the units in 2006-2007 

for the purchase price of $2,000,000. The units are part of a 

condominium development known as "The Odyssey Condominium 

Project" (The Odyssey), which consists of residential units and 

 1

 We will recite only those facts relevant to the 

dispositive issue. 
ground-level retail space.2 Pursuant to a "Community Benefit 

Housing Program Agreement" (the Agreement) between the developer 

of the project and the County, 21 units in The Odyssey are 

designated as community benefit units, or CBUs. The Agreement 

specified that the 21 units would consist of 6 three-bedroom 

townhouses and 15 two-bedroom flats. The Agreement requires the 

CBUs to be rented to qualifying, low-income households for a 

period of 40 years and specifies limitations on rental amounts 

and occupancy. The Agreement further requires that a 

"Declaration of Covenants" be recorded "among the land records 

of [the] County." 

For the 2007 tax year, the County assessed the 21 units as 

having a fair market value of $8,370,400. The County's 

Department of Real Estate Assessments reduced the assessment to 

$5,364,864, and the Board of Equalization (BOE) further lowered 

the assessed value to $3,248,100. The BOE assessed the 6 

townhouses as having a fair market value of either $187,300 or 

$187,400 each, and the 15 flats as having a fair market value of 

$141,600 each. For the 2008 tax year, the County assessed the 

 2

 Prior to TB Venture's acquisition, the developer 

transferred the units to another entity, and the development 

plans were altered, changing the units from rental apartments to 

condominiums pursuant to the provisions of the Condominium Act, 

Code §§ 55-79.39 through –79.103. 

2 
townhouses at $210,900 each and the flats at $186,200 each, for 

a total fair market value of $4,058,400 for the 21 units. 

Pursuant to Code § 58.1-3984, TB Venture filed a complaint 

to correct erroneous tax assessments, alleging that the County's 

assessments for the 2007 and 2008 tax years were "greatly in 

excess of 100 [percent] of the fair market value of each of the 

[u]nits," and thus violated the provisions of Code § 58.1-3201 

requiring real property to be assessed at 100 percent of its 

fair market value. TB Venture asked the circuit court to reduce 

the assessments to amounts representing the 21 units' fair 

market value. 

At trial, TB Venture presented testimony from, among 

others, Thomas J. Shields, who qualified as an expert in real 

estate appraisal. Shields testified that to appraise the 

subject property, he utilized a "direct capitalization 

methodology, which projected . . . a stabilized year of income 

and expenses to derive . . . a net operating income." He then 

capitalized the net operating income "at an appropriate 

capitalization rate to determine the market value." Shields 

stated that he assessed the units on a "leased fee" rather than 

a fee simple basis. According to Shields, that methodology 

enabled him to take into account the 40-year rental restrictions 

encumbering the units. Using his methodology, Shields opined 

3 
that the fair market value of the 21 units was $2,160,000 as of 

January 1, 2007, and $2,000,500 as of January 1, 2008. 

Based on those figures, Shields then allocated a value to 

each unit "based on the pro rata share of the income of each of 

the units derived by the overall income." Shields admitted that 

his valuation considered "all 21 units as a whole." He 

explained that he did not determine the fair market value of 

each unit because "the units [could not] be sold individually as 

condominiums" but are "basically tied together through this 

covenant." In his opinion, there is no market for "one rentrestricted unit as an investment."3

On cross-examination, Shields stated that TB Venture's 

purchase of the property was a bulk sale, i.e., "[n]o individual 

prices were negotiated." Similarly, Shields admitted that his 

valuation was a "bulk valuation," which he believed was "the 

only way to look at it in this particular case." Shields 

reaffirmed that he had "appraised the entirety of 21 units and 

then allocated values to each individual condominium." When 

asked whether his allocation of value was based on market value, 

Shields replied it was "purely an allocation based on the income 

in place." 

 

3

 The Agreement required that the CBUs be rented. 

4 
At the close of TB Venture's evidence, the County moved to 

strike the evidence, arguing, in part, that TB Venture failed to 

present evidence showing the fair market value of each 

individual unit. According to the County, TB Venture thus 

failed to carry its burden not only to show manifest error, but 

also to establish the fair market value of the real property. 

The circuit court granted the motion to strike. In its final 

order, the court held that TB Venture "failed to prove the value 

of the subject properties, and . . . failed to show either 

manifest error or total disregard of controlling evidence in the 

making of the assessments at issue and therefore failed to 

overcome the presumption of correctness which applies to the 

assessments." We awarded TB Venture this appeal. 

ANALYSIS 

On appeal, TB Venture challenges the circuit court's 

judgment striking its evidence. When ruling on a motion to 

strike a plaintiff's evidence, a trial court "is required to 

accept as true all evidence favorable to a plaintiff and any 

reasonable inferences that may be drawn from such evidence." 

James v. City of Falls Church, 280 Va. 31, 38, 694 S.E.2d 568, 

572 (2010) (citing Austin v. Shoney's, Inc., 254 Va. 134, 138, 

486 S.E.2d 285, 287 (1997)). "The trial court is not to judge 

the weight and credibility of the evidence, and may not reject 

any inference from the evidence favorable to the plaintiff 

5 
unless it would defy logic and common sense." Austin, 254 Va. 

at 138, 486 S.E.2d at 287; see also Meador v. Lawson, 214 Va. 

759, 761, 204 S.E.2d 285, 287 (1974). On appeal, when this 

Court reviews a trial court's decision to strike a plaintiff's 

evidence, we likewise view the evidence in the light most 

favorable to the plaintiff. Lee v. Nationwide Mut. Ins. Co., 

255 Va. 279, 284, 497 S.E.2d 328, 330 (1998); James, 280 Va. at 

38 n.4, 694 S.E.2d at 572 n.4. 

"All assessments of real estate . . . shall be at their 

fair market value." Va. Const. art. X, §§ 1, 2; see also Code 

§ 58.1-3201. "A taxing authority's assessment is presumed to be 

correct," and a taxpayer challenging the assessment of his or 

her real property "has the burden to rebut that presumption by 

establishing that the real property in question is assessed at 

more than fair market value or that the assessment is not 

uniform in its application." West Creek Assocs., LLC v. County 

of Goochland, 276 Va. 393, 409, 665 S.E.2d 834, 842 (2008) 

(citing Code § 58.1-3984(A)). Even if the taxing authority is 

unable to present evidence proving the correctness of its 

assessment, "this does not impeach it since the taxpayer has the 

burden of proving the assessment erroneous." Id. at 409, 665 

S.E.2d at 843 (internal quotation marks omitted). To rebut the 

presumption of correctness, "a taxpayer must show by a clear 

preponderance of the evidence that the taxing authority 

6 
committed manifest error or totally disregarded controlling 

evidence in making the assessment." Id.; accord Tidewater 

Psychiatric Inst., Inc. v. City of Virginia Beach, 256 Va. 136, 

141, 501 S.E.2d 761, 763 (1998). Manifest error may be shown by 

proving that the taxing authority employed an improper 

methodology in arriving at a property's assessed value or by 

establishing "a significant disparity between fair market value 

and assessed value . . . 'so long as the assessment [does not 

come] within the range of a reasonable difference of opinion, 

. . . when considered in light of the presumption in its 

favor.' " West Creek, 276 Va. at 414, 655 S.E.2d at 845 

(quoting City of Norfolk v. Synder, 161 Va. 288, 293, 170 S.E. 

721, 723 (1933)). 

In every instance, however, 

to satisfy the statutory requirement of showing that 

real property is assessed at more than its fair market 

value, a taxpayer must necessarily establish the 

property's fair market value. This is so irrespective 

of whether a taxpayer is attempting to show manifest 

error or disregard of controlling evidence by proving 

a significant disparity between fair market value and 

assessed value, or by establishing a flawed 

methodology by the taxing authority in setting the 

assessed value. 

Id. at 417, 665 S.E.2d at 847 (citation omitted). This Court 

generally has defined the term fair market value as real 

property's "sale price when offered for sale 'by one who 

desires, but is not obliged, to sell it, and is bought by one 

7 
who is under no necessity of having it.' " Keswick Club, L.P. 

v. County of Albemarle, 273 Va. 128, 136, 639 S.E.2d 243, 247 

(2007) (quoting Tuckahoe Woman’s Club v. City of Richmond, 199 

Va. 734, 737, 101 S.E.2d 571, 574 (1958)); see also West Creek, 

276 Va. at 416, 665 S.E.2d at 846 ("[F]air market value 'is the 

present actual value of the land with all its adaptations to 

general and special uses, and not its prospective, speculative 

or possible value, based on future expenditures and 

improvements.' " (quoting Fruit Growers Express Co. v. City of 

Alexandria, 216 Va. 602, 609, 221 S.E.2d 157, 162 (1976))). 

Viewing the evidence in the light most favorable to TB 

Venture, we conclude that the circuit court did not err in 

striking TB Venture's evidence. As we have already noted, the 

taxpayer's burden to prove that real property is assessed at 

more than its fair market value necessarily requires that the 

taxpayer establish the property's fair market value. West 

Creek, 276 Va. at 417, 665 S.E.2d at 847. Here, because the 

real property at issue consists of condominium units, TB Venture 

was required to produce evidence to show the fair market value 

of each individual unit. 

The provisions of Code § 55-79.42 state that "each 

condominium unit constitutes for all purposes a separate parcel 

of real estate." Additionally, "[i]f there is any unit owner 

other than the declarant, each unit, together with its common 

8 
element interest . . . shall be separately assessed and taxed." 

Code § 55-79.42. TB Venture, the current owner of the 21 units, 

was not the "declarant" of The Odyssey.4 In fact, the 21 units 

at issue here had been registered as condominiums prior to being 

acquired by TB Venture. Thus, just as the County was required 

to separately assess each unit, TB Venture was required to 

establish the fair market value of each unit. See Orchard Glen 

East, Inc. v. Board of Supervisors of Prince William County, 254 

Va. 307, 312, 492 S.E.2d 150, 153 (1997) (holding that Code 

§ 55-79.42 requires individual assessment of condominiums 

regardless of ownership); West Creek, 276 Va. at 414 n.8, 665 

S.E.2d at 846 n.8 (listing statutes that require parcels of real 

property to be assessed individually); see also Code § 58.1-

3290. 

But, TB Venture's expert witness admitted that he did not 

separately appraise the units at issue. Instead, Shields valued 

the 21 units as a whole and then allocated an amount to each 

unit based on the unit's pro rata share of the overall income. 

Shields used such methodology because, in his opinion, there is 

no market for "one rent-restricted" condominium. Similarly, TB 

Venture argues on appeal that allocating each unit's fair market 

value pro rata based on income is warranted "because income is 

 4

 The "declarant" is, among other things, the entity that 

"applies for registration of the condominium." Code § 55-79.41. 

9 
the only distinguishing feature that separates these units." 

According to TB Venture, each unit's location in the complex, 

its amenities, and even its view are irrelevant because of the 

restrictions contained in the Agreement. 

To the extent there are market-driven impediments to 

selling the units individually and limitations on the rental 

income that can be realized, such factors may affect each unit's 

fair market value. See West Creek, 276 Va. at 416, 665 S.E.2d 

at 846 ("[F]air market value is the present actual value of the 

land with all its adaptations to general and special uses.") 

(internal quotation marks omitted). But, they do not alter the 

statutory requirement that condominiums be treated as separate 

parcels of real estate and separately assessed. Code § 55-

79.42. Nor do such factors alter TB Venture's burden to 

establish each unit's fair market value in order to show that 

its real property is assessed at more than fair market value as 

required by Code § 58.1-3984(A). See West Creek, 276 Va. at 

417, 665 S.E.2d at 847. TB Venture failed to carry that burden, 

and the circuit court properly struck its evidence. 

10 
CONCLUSION 

For these reasons, we will affirm the circuit court's 

judgment.5

Affirmed. 

 5

 In light of the Court's decision, it is not necessary to 

address TB Venture's other assignments of error. 

11