Recent Court Decisions Affecting Ohio Real Property Tax Appraisals

The Ohio Supreme Court has issued a couple of decisions in recent weeks that affect how reappraisals of property are handled.



At issue was the tax value assigned by the Summit County fiscal officer to an Akron-area Arby’s restaurant during the  reappraisal that occurs every 6 years.  When the real property upon which the restaurant was located sold in 2005, the purchase price was $1,407,000. When the property was valued by the county’s fiscal officer in 2008, the value was determined to be $902,230.  The Akron City School District Board of Education (the “Akron school board”) filed a complaint asserting the the 2005 sale price was within a reasonable period of time and should be adopted as the value of the real property. The Akron school board did not provide any other evidence to support its assertion that the sale price was recent to the tax-lien date of January 1, 2008. The Summit County Board of Revision declined to use the sale price and retained the fiscal officer’s value. On appeal, the Board of Tax Appeals (“BTA”) reversed.  The property owners appealed and the Ohio Supreme Court reversed the BTA and remanded the case back to the BTA for further proceedings. The Ohio Supreme Court held that when a sale occurs more than 24 months before the tax-lien date and is reflected in the property records, and the tax assessor decides not to base the reappraisal on it, the sale should not be presumed to be recent. The party arguing for the use of the sale price will have the burden of providing evidence to show that nothing about the market conditions or property character has changed between the sale date and the tax-lien date. The case was remanded to allow the Akron school board the opportunity to provide that evidence.


The significance of this decision was to remove the presumption that a sale price older than 24 months is ‘recent’ and it therefore cannot be conclusive of a property’s current value without further evidence to support the continued validity of that value.


    At issue in this case was the bulk evaluation of condominium units. 21 units of a 28-unit condominium complex in Dublin, Ohio were under construction. The Franklin County Auditor valued each unit under construction as a separate parcel and the aggregate value totaled $8,139,300. However, the property records did not indicate whether the county auditor properly took into consideration the unfinished state of the condo units when determining each unit’s value as required by Ohio. Adm. Code 5703-25-06(G).  The property owner appealed to the board of revision providing a valuation prepared by an appraiser. The appraiser deducted the cost for completion, valued the 21 units in bulk as if the units were one economic unit and further discounted the amount to what he believed a single investor would pay for all 21 units. The board of revision adopted the valuation prepared by the appraiser.  The local school board appealed to the BTA who reinstated the county auditor’s valuation. The Ohio Supreme Court revised the BTA due to the fact that the local school board failed to meet its own burden of proof by not offering any evidence to support the higher valuation. It had merely attacked the validity of the appraisal report.  The school board asked the court to reconsider. The court granted reconsideration on the issue of the bulk-sale valuation was accurate and held that the appraisal violated R.C. 5311.11 which requires that each unit of a condominium property…is deemed a separate parcel for all purposes of taxation and assessment of real property.” The court also faulted the appraisal for using a discounted net present value for the units  as if they would be sold to a single investor when in fact the highest and best use for the units would be as owner-occupied residential units and the complex was in fact selling the units for individual residential use. Further, county auditors are required by law to assess the “true value” of real property (See R.C. 5713.01(B)), which is the amount the property recent sold for on the open market or the amount of an appraisal predicting what the sale price would be. The appraisal based its conclusions on a net present investment value, which is contrary to the real market value required by law.
    Upon reconsideration, the court upheld the BTA’s finding that a bulk-value-appraisal methodology contradicted Ohio statutory requires but remanded the matter back to the BTA to independently determine the value of the condominium units instead of reinstating the county auditor’s valuations.

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In summary, during a reappraisal of property for tax value purposes, (i) a sale price in the record that is more than 24 months old may be considered but is not binding on a tax assessor when  determining the property’s value, and  (ii) bulk-value-appraisals of condominium units are contrary to Ohio law.


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