SC Administrative Law Court Decisions



SC Administrative Law Court Decisions

|CAPTION: |

|Timothy V. Key vs. Aiken County Assessor |

| |

|AGENCY: |

|Aiken County Assessor |

| |

|PARTIES: |

|Petitioners: |

|Timothy V. Key |

| |

|Respondents: |

|Aiken County Assessor |

|  |

|DOCKET NUMBER: |

|07-ALJ-17-0193-CC |

| |

|APPEARANCES: |

|For the Petitioner: |

|Pro Se |

| |

|For the Respondent: |

|W. Lawrence Brown, Esquire |

|  |

| |

|ORDERS: |

|FINAL ORDER AND DECISION |

|STATEMENT OF THE CASE |

|This matter is before the Administrative Law Court (“ALC”) for a final order and decision following a contested case hearing pursuant to |

|S.C. Code Ann. § 12-60-2540 (2000) and S.C. Code Ann. § 1-23-600(B) (Supp. 2006). Petitioner Timothy V. Key (“Key”) challenges the |

|Respondent Aiken County Assessor’s (“Assessor’s”) placement of his residence located at 195 River Wind Drive, North Augusta, South Carolina|

|29847, on the 2006 county tax rolls. Key asserts that his residence was not complete and fit for the use it was intended by December 31, |

|2005. Accordingly, Key seeks to have the value of his residence deducted from his 2006 tax assessment. The Assessor found that the |

|residence was complete and fit for the use it was intended by December 31, 2005 and that no reduction in Key’s tax assessment was |

|warranted. The Assessor therefore issued a tax assessment for 2006 for Key’s property that included the value of his residence. Key |

|appealed this assessment to the Aiken County Board of Assessment Appeals (“Board”). The Board affirmed the Assessor’s assessment. Key |

|appealed this decision to the ALC. |

|After notice to the parties, the court held a hearing on August 23, 2007. Both parties appeared at the hearing. Evidence was introduced and|

|testimony presented. After carefully weighing all of the evidence, the court finds that Key’s residence should not be included on the 2006 |

|tax roll. |

|ISSUE |

|The sole issue before the court is whether certain improvements to Key’s property should be included on the 2006 tax roll for property tax |

|assessment purposes. |

|FINDINGS OF FACT |

|Having observed the witnesses and exhibits presented at the hearing and closely passed upon their credibility, and taking into |

|consideration the burden of persuasion by the parties, the court makes the following Findings of Fact by a preponderance of the evidence. |

|On May 13, 2004, Key applied for a building permit to build a residence at 195 River Wind Drive in North Augusta, South Carolina. Key was |

|both the builder and the intended occupant of this residence. The evidence demonstrated that generally residences are completed |

|approximately six to eight months after the building permit is issued; however, when the builder is also the intended occupant, the process|

|often takes longer. In this case, it took Key approximately eighteen months to complete the construction of his residence. |

|An inspection report that was completed in mid-December 2005 indicated that there were thirteen minor items to be completed before a |

|certificate of occupancy could be issued. These included: |

|1.                  handrail on interior steps |

|2.                  cut off pull down stairs to fit floor |

|3.                  finish doors & door hardware |

|4.                  finish noseing [sic] of landing at front steps |

|5.                  need thresholds at sunroom [door] |

|6.                  weather strip attic doors |

|7.                  caulk entry door thresholds |

|8.                  complete trim cover above all exterior doors |

|9.                  caulk exterior windows |

|10.              3 ft. landing required at rear sun room doors |

|11.              clean out crawl space |

|12.              make sure risers at rear steps are within 3/8” |

|13.              3” tall house numbers on home |

|[Respt.’s Ex. 6.] Key testified that he completed these thirteen deficiencies as quickly as he could and that it would have been to his |

|financial benefit to complete them before the end of the year. However, the last item was not completed until the first week of January |

|2006. Key testified that during the final stages of construction he generally called the inspector on the same day – or at the latest the |

|day after – an item was completed. The inspection reports show that Key was calling the inspector regularly in late November and early |

|December 2005. The inspector testified that he would typically perform inspections within a day of Key’s call. The final inspection |

|occurred on January 6, 2006 and the city of North Augusta issued a certificate of occupancy for 195 River Wind Drive on January 9, 2006. |

|Key did not occupy this residence until after the certificate of occupancy was issued.[1] |

|Both parties agree that the residence was substantially complete by December 31, 2005. However, the evidence shows that as of December 31, |

|2005 Key was still working on “punch list” items that were required by the city’s building inspector for issuance of a certificate of |

|occupancy. These items were not completed and found acceptable by the building inspector until January 9, 2006, as shown by the issuance of|

|the certificate of occupancy. |

|LAW |

|Based upon the foregoing Findings of Fact, the court concludes the following as a matter of law. |

|1. Jurisdiction and Review |

|Jurisdiction over this case is vested with the South Carolina Administrative Law Court pursuant to S.C. Code Ann. § 12-60-2540(A) (Supp. |

|2006), S.C. Code Ann. § 1-23-600(B) (Supp. 2006), and S.C. Code Ann. §§ 1-23-310 et seq. (2005). The weight and credibility assigned to |

|evidence presented at the hearing of a matter is within the province of the trier of fact. See S.C. Cable Television Ass’n v. S. Bell Tel. |

|& Tel. Co., 308 S.C. 216, 222, 417 S.E.2d 586, 589 (1992). Furthermore, a trial judge who observes a witness is in the best position to |

|judge the witness’s demeanor and veracity and to evaluate the credibility of his testimony. See, e.g., Woodall v. Woodall, 322 S.C. 7, 10, |

|471 S.E.2d 154, 157 (1996); Wallace v. Milliken & Co., 300 S.C. 553, 556, 389 S.E.2d 448, 450 (Ct. App. 1990). In presiding over this |

|contested case, the court serves as the finder of fact and makes a de novo determination regarding the matters at issue. Reliance Ins. Co. |

|v. Smith, 327 S.C. 528, 534, 489 S.E.2d 674, 677 (Ct. App. 1997); see S.C. Code Ann. § 1-23-600(B) (Supp. 2006). |

|2. Inclusion on the Tax Rolls |

|A taxpayer may appeal a property tax assessment of a county board of assessment by requesting a contested case hearing before the ALC. S.C.|

|Code Ann. § 12-60-2540(A) (Supp. 2006). A presumption exists that an assessor’s valuation is correct. See S.C. Tax Comm’n v. S.C. Tax Bd. |

|of Review, 278 S.C. 556, 562, 299 S.E.2d 489, 492-93 (1983). |

|The taxable status of real property for a given tax year is to be determined as of December 31 of the preceding year. S.C. Code Ann. § |

|12-37-900 (2000); Atkinson Dredging Co. v. Thomas, 266 S.C. 361, 223 S.E. 2d 592 (1976). Section 12-37-670 provides, in pertinent part, |

|that “[n]o new structure shall be listed or assessed until it is completed and fit for the use for which it is intended.” S.C. Code Ann. § |

|12-37-670 (2000).[2] For an improvement to be included in a tax assessment, it must be fully complete for its intended purpose, not merely |

|“substantially” complete. See, e.g., Charleston County Bd. of Assessment Control v. S.C. Tax Comm’n, 78-CP-10-1543 (S.C. Feb. 22, 1979); |

|International Center II, LLC v. Berkeley County Assessor 05-ALJ-17-0235-CC, 2006 WL 477124 (S.C. Admin. Law Ct., Feb. 2, 2006); Horry |

|County Assessor v. TPC of Myrtle Beach, 00-ALJ-17-0187-CC, 2006 WL 477124 (S.C. Admin. Law Ct., July 28, 2000) (all rejecting the argument |

|that substantially complete is sufficient to satisfy the requirements of § 12-37-670). |

|3. Conclusions |

|The parties agree that the relevant tax control date is December 31, 2005. The Assessor argues that because the items remaining to be |

|completed on December 31, 2005 for certificate of occupancy purposes were minor and did not otherwise prevent the residence from being |

|inhabited, the structure was complete and fit for the use for which it is intended within the meaning of § 12-37-670. Key, by contrast, |

|contends that since he could not lawfully occupy his residence on December 31, 2005, and because he in fact did not occupy his residence on|

|December 31, 2005, it was not complete and fit for the use intended. |

|The County argues that a certificate of occupancy is not always an accurate indicator of a structure’s completion and fitness for its |

|intended use. In support of its argument that the court should reject the certificate of occupancy date, it contends that using that date |

|as determinative for purposes of § 12-37-670 would permit builders to avoid property taxes on “spec” houses when they do not yet have a |

|buyer by purposely postponing a final building inspection even though the house is completed. Similarly, it points out, taxpayers could |

|avoid property taxes by unlawfully moving into their substantially completed homes before a certificate of occupancy is issued. |

|The court recognizes that there may be situations where no certificate of occupancy is issued or where it does not accurately reflect the |

|date upon which an improvement should be included in the county’s tax base. Indeed, § 12-37-670 does not provide such a bright-line test |

|for determining a structure’s completion date or fitness for its intended use. Nonetheless, the court observes that generally the |

|certificate of occupancy or the actual date the structure becomes occupied will be the most compelling evidence of the residence’s date of |

|completion and fitness for the use for which it was intended. See, e.g., 2007 Act. No. 57, § 6 (to be codified at S.C. Code Ann. § |

|12-37-670(B)(1)) (using the date of issuance of the certificate of occupancy, or, where no certificate of occupancy is issued, the date the|

|structure is actually occupied as the determinative date for previously untaxed improvements in cases where a county chooses by ordinance |

|to add such properties to the tax rolls by calendar quarter).[3] Here, both the issuance of the certificate of occupancy and the actual |

|date of occupancy occurred after the tax control date. The court therefore finds that Key’s residence was not complete and fit for its |

|intended use until after December 31, 2005. |

|ORDER |

|Based upon the Findings of Fact and Conclusions of Law stated above, it is hereby |

|ORDERED that the Assessor shall not include the value of Key’s residence for property tax assessment purposes for the 2006 tax year. |

|IT IS SO ORDERED. |

|_____________________________________ |

|PAIGE J. GOSSETT |

|Administrative Law Judge |

|November 20, 2007 |

|Columbia, South Carolina |

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| |

|[pic] |

|[1] Although one of the County’s witnesses, Jim Ouzts, an appraiser for the Assessor, testified that when he viewed the home on December |

|16, 2005 he observed pictures propped up against the walls and a few chairs and a table in one room of the home, the court accepts Key’s |

|unequivocal testimony that his family did not move into the residence at 195 River Wind Drive until after the certificate of occupancy was |

|issued on January 9, 2006. Moreover, the County did not introduce any evidence to refute Key’s statement; rather, it apparently relies on |

|Outzts’s evidence in support of its argument that the house was ready to be occupied as of December 16, 2005. |

|[2] Since Key’s 2006 tax assessment this statute has been amended twice, once in 2006 and again in 2007. See 2006 Act No. 388, Pt V, § 2.A |

|(eff. June 10, 2006); 2007 Act. No. 57, § 6 (eff. June 6, 2007) (to be codified at S.C. Code Ann. § 12-37-670). Neither of these |

|amendments, however, affects the assessment at issue. |

|[3] While this amendment indisputably does not apply to Key’s residence because (1) this dispute arose prior to the enactment of Act No. 57|

|and (2) Aiken County has not adopted such an ordinance, the court finds that the amendment provides guidance as to the General Assembly’s |

|intent with regard to taxation of previously untaxed improvements. See Fidelity and Cas. Ins. Co. of New York v. Nationwide Ins. Co., 278 |

|S.C. 332, 295 S.E.2d 783 (1982) (stating that it is proper to consider related legislation in construing a statute). The court therefore |

|finds it appropriate to consider those factors, although not controlling, to help resolve the instant dispute. |

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