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Appraisal Evidence Must Be Considered When Valuing Encumbered Property

In the case of Spirit Master Funding IX, L.L.C. v. Cuyahoga Cty. Bd. of Revision, 2022-Ohio-610, the Ohio Eighth District Court of Appeals held that the Board of Tax Appeals (“BTA”) must consider appraisal evidence along with the sale price when valuing encumbered property.

Here, the BTA rejected an appraiser’s assertions that a lease (which was in effect at the time of the sale) impacted the sale price and that the sale price was not the property’s true value despite being an arm’s length transaction. Instead, the BTA determined that the sale price alone reflected the property’s true value. The Court disagreed with the BTA.

In overruling the BTA’s decision, the Court explained that the BTA should have considered the appraiser’s evidence because R.C. 5713.03 permits the consideration of the sale price alone only if the property is “unencumbered” and, in this case, the property was encumbered as it was subject to a lease at the time of sale.

To read this case, click here.

Authors: Matthew John Markling and the McGown & Markling Team.

Note: This blog entry does not constitute – nor does it contain – legal advice. Legal jurisprudence is like the always-changing Midwestern weather. As a result, this single blog entry cannot substitute for consultation with a McGown & Markling attorney. If legal advice is needed with respect to a specific factual situation, please feel free to contact a McGown & Markling attorney.

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