                         STATE OF MICHIGAN

                          COURT OF APPEALS



VERONICA SMITH,                                                   UNPUBLISHED
                                                                  February 15, 2018
              Petitioner-Appellant,

v                                                                 No. 335547
                                                                  Tax Tribunal
CITY OF HAMTRAMCK,                                                LC No. 15-005843-TT

              Respondent-Appellee.


Before: MARKEY, P.J., and M. J. KELLY and CAMERON, JJ.

PER CURIAM.

       Petitioner, Veronica Smith, appeals by right the Tax Tribunal’s final opinion and
judgment which upheld the true cash value and taxable value assigned to petitioner’s home by
respondent, the city of Hamtramck, for the years 2015 and 2016. We affirm.

        Petitioner’s home was one of approximately two hundred constructed in settlement of a
racial discrimination lawsuit filed in 1968 against the city of Hamtramck. During the 1950s and
1960s, the city made plans to construct the Chrysler Freeway through the city and to build new
housing. Using federal funds, the city cleared out existing homes in three separate
neighborhoods, displacing many residents; however, after the freeway was constructed, the new
homes were never built. In 1968 a class action lawsuit was brought in federal district court
against the city on behalf of displaced homeowners and descendants of original displaced
homeowners. The class action plaintiffs claimed that the city had violated the Fourteenth
Amendment in that over 70% of the displaced residents were African American. In 1971 a
settlement was reached wherein the city and Wayne County agreed to construct approximately
200 new homes, giving the class action plaintiffs the option of purchasing a home with a partial
subsidy from a housing fund that was established for that purpose. Petitioner exercised the
option and purchased the home at issue. She paid $55,000 out of pocket; the remainder of the
purchase price came out of the housing fund.

       Petitioner’s home is a 1728 square-foot, two-story colonial. The building permit was
issued on March 18, 2013, to the contractor, NHS-Hamtramck #1, LLC. The home was finished
in November 2013. Petitioner formally purchased the home in March 2014.

       In 2014 petitioner’s home was assessed with a taxable value of $27,500 and an assessed
value of $27,500. The February 2015 notice of assessment listed a taxable value of $58,600 and
an assessed value of $58,600. Petitioner appeared before respondent’s board of review in March
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2015, objecting that her 2015 assessments were too high. The board of review reduced both the
taxable value and assessed value to $56,000. In 2016, respondent assessed petitioner’s home at a
taxable value of $62,468 and an assessed value of $65,300. Petitioner appeared before the board
of review in March 2016 to challenge the 2016 assessments, but the board did not change them.

        On or about August 4, 2015, petitioner, acting in propria persona, filed a property tax
appeal with the Tax Tribunal, challenging the true cash value and taxable value for the year
2015. Under MCL 205.737(5)(b) the tribunal added the year 2016 to the consideration of the
appeal.1 In her petition, petitioner claimed that the 2015 taxable value should have been $23,000
rather than $56,000. Petitioner pointed to the fact that since she paid $55,000 for the home, that
should be the true cash value for the home in 2015, with the property being assessed for one-half
that amount, or $27,500.

        On April 13, 2016, respondent filed written value estimates with the tribunal.
Respondent stated that petitioner only paid one half of the actual cost of the new home out of
pocket, with the other half coming out of the housing fund. Respondent noted that there are
three methods for assessing taxable value: the sales approach, cost approach, and income
approach. Respondent stated that the sales approach does not give accurate results in petitioner’s
case because most of the homes surrounding petitioner’s home are older and had depreciated
significantly. The income approach is not appropriate because petitioner’s home is not income-
producing property. The most logical method is the cost method, which is the preferred method
for new construction. Utilizing that approach, respondent’s assessor noted that the cost of the
structure was $111,000. He estimated the cost of heating/cooling, electrical, and plumbing as
totaling $23,000, and added a builder’s premium of 5%. From that total of $140,700, he
deducted physical, economic and neighborhood depreciation of $14,800, resulting in a value of
$125,900. To that, he added the land value of $4,700, which results in a final property true cash
value of $130,600. Respondent went on to explain that the 2014 calculations were not fully
completed because the home was newly built at that time; the previous assessor had left in the
spring of 2014, and the new assessor did not arrive until later. Also, in 2015, an estimate of
$56,000 was used. Respondent explained that it was not until sometime in 2015 that the home
was “measured and properly priced in the assessing system.”

         On June 14, 2016, the tribunal issued a proposed opinion and judgment. The tribunal
held that the 2015 and 2016 assessments were properly made and upheld the assessments in their
totality as adjusted in 2015 by the board of review. The tribunal noted that respondent provided
a cost less depreciation approach and included the calculations resulting in the assessment value
for both 2015 and 2016 using the State Tax Manual. Petitioner filed written exceptions to the
proposed opinion and judgment, but the tribunal subsequently adopted it as its final opinion and
judgment. Petitioner now appeals by right.

       Initially, petitioner claims that the tribunal clearly erred in finding that her home was
constructed over a two-year period (2013 to 2014), instead of during calendar year 2013 alone.


1
  MCL 205.737(5)(b) states that when a petition for a particular year is filed, an appeal for each
subsequent year is added automatically to the petition.


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Petitioner claims that this erroneously caused a doubling of the true cash value between 2014 and
2015. Petitioner is mistaken. The tribunal’s findings of fact are final if they are supported by
competent, material, and substantial evidence on the whole record. Meadowlanes, Ltd Dividend
Housing Ass’n v City of Holland, 437 Mich 473, 482; 473 NW2d 636 (1991). In this case, the
tribunal did not find as a matter of fact that petitioner’s home was built over a two-year period.
Rather, the tribunal’s final opinion and judgment states that the tribunal found that, although the
home was completed in November of 2013, it was assessed in 2014 as if it were not completed
until 2014. This was clear from respondent’s value estimates, where respondent stated that the
home was given an estimate of $56,000 in 2015 because it had not yet been properly measured
and placed on the assessment rolls until 2016.

         Secondly, petitioner claims that if the reason for the increase in the assessment is because
of previously “omitted property,” the law requires that there be a property record card or other
documentation showing that the omitted property was not previously included in the assessment.
Petitioner claims that here the property record cards show only that the bathrooms and a chain
link fence were omitted. These two items alone cannot be the basis for a doubling in the
assessment between 2014 and 2015. Petitioner consequently claims that the Tax Tribunal erred
in its findings regarding the true cash and taxable values for 2015 and 2016.

Our review of the Tax Tribunal’s decisions is limited. Mt Pleasant v State Tax Comm, 477 Mich
50, 53; 729 NW2d 833 (2007). Absent fraud, this Court’s review of a Tax Tribunal decision is
limited to determining whether the tribunal made an error of law or adopted a wrong principle.
Id., citing Const 1963, art 6, § 28. The Tax Tribunal’s findings of fact are final if they are
supported by competent, material, and substantial evidence on the whole record. Meadowlanes,
Ltd, 437 Mich at 482. The petitioner has the burden of proof in establishing the property’s true
cash value. MCL 205.737(3); Kern v Pontiac Twp, 93 Mich App 612, 620; 287 NW2d 603
(1979). The assessment of real property in Michigan shall not exceed 50% of its true cash value.
Mich Const 1963, art IX, § 3. “ ‘True cash value’ means the usual selling price at the place
where the property to which the term is applied is at the time of the assessment, being the price
that could be obtained for the property at private sale, and not at auction sale except as otherwise
provided in this section, or at forced sale.” MCL 211.27(1). The Tax Tribunal is required to
make an independent determination of true cash value. Jones & Laughlin Steel Corp v City of
Warren, 193 Mich App 348, 353; 483 NW2d 416 (1992). The tribunal is not bound to accept
either of the parties’ theories of valuation. It may accept one theory and reject the other; it may
reject both theories, or it may use a combination of both in arriving at its determination. Id. at
356. The Tax Tribunal may select any valuation methodology that is accurate and bears a
reasonable relationship to the property’s true cash value. Safran Printing Co v Detroit, 88 Mich
App 376, 380; 276 NW2d 602 (1979).

       Regarding additions and omitted property, MCL 211.27a(2) states in pertinent part:

       [F]or taxes levied in 1995 and for each year after 1995, the taxable value of each
       parcel of property is the lesser of the following:

              (a) The property’s taxable value in the immediately preceding year minus
       any losses, multiplied by the lesser of 1.05 or the inflation rate, plus all
       additions. . . .

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              (b) The property’s current state equalized valuation. [Emphasis added.]

MCL 211.34d(1)(b) provides:

              For taxes levied after 1994, “additions” means . . . all of the following:

              (i) Omitted real property. As used in this subparagraph, “omitted real
       property” means previously existing tangible real property not included in the
       assessment. Omitted real property shall not increase taxable value as an addition
       unless the assessing jurisdiction has a property record card or other
       documentation showing that the omitted real property was not previously
       included in the assessment. . . . [Emphasis added.]

        In this case, the Tax Tribunal record contains an April 6, 2016, property record card for
petitioner’s home which states specifically for the year 2016:

       Other additions:

       (13) Plumbing

       3 fixture bath                        2400

       2 fixture bath                        1600

Because a property record card documents the additions, the requirements of MCL 211.34d have
been met. The Tax Tribunal recognized this and found that the two bathrooms were previously
omitted and that was the reason for the increase in the assessment from 2015 to 2016. This
factual finding is supported by competent, material and substantial evidence on the record.

        Respondent used the cost approach in its determination of true cash value. Respondent’s
valuation was based upon actual numbers and calculated with the methodology set forth in the
State Tax Manual. In contrast, petitioner did not provide a valuation method. The Tax Tribunal
found respondent’s methodology to be sound and in accordance with an accepted assessing
method discussed in the State Tax Manual. There was no error. The Tax Tribunal did not adopt
a wrong principle or make an error of law. Further, the findings of the tribunal were supported
by competent, material, and substantial evidence on the record.

       We affirm.

                                                            /s/ Jane E. Markey
                                                            /s/ Michael J. Kelly
                                                            /s/ Thomas C. Cameron




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