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Lake Forest Property Owners Ass'n v. Baldwin County Board of Equalization
Citations: 659 So. 2d 605; 1994 Ala. Civ. App. LEXIS 147; 1994 WL 94257Docket: AV92000407
Court: Court of Civil Appeals of Alabama; March 24, 1994; Alabama; State Appellate Court
This case involves a second appeal by the Lake Forest Property Owners Association, Inc. (LFPOA) regarding the ad valorem tax assessment of common areas in the Lake Forest subdivision. The previous ruling addressed several key issues: the conditions under which property values could be reduced due to encumbrances, the valuation of servient interests in relation to dominant estates, and whether to assess the entire residential development collectively for tax purposes. The common areas faced unique assessment challenges due to encumbrances granted to property owners, including easements for recreational use and access. Upon remand, the trial court was instructed to assess the common areas at fair market value, taking into account the encumbrances as one of several factors. The trial court reviewed additional evidence and ruled again in favor of the board of equalization. Lake Forest appealed, arguing errors in this ruling. According to Alabama law, the tax assessor's valuation is presumed correct, placing the burden on the taxpayer to provide evidence otherwise. The court affirmed the trial court's decision, adopting its July 29, 1992, order. The Lake Forest subdivision comprises 3,386 developed lots and 837 undeveloped lots, with a monthly assessment fee of $27.50 levied on lot owners for maintenance of shared amenities, which include a golf course, marina, tennis courts, pools, and a restaurant. Financial statements revealed significant operating losses for these amenities. Lot values ranged from $6,500 to $10,500, with premium lots valued between $18,000 and $45,000. The tax assessor determined the value of the amenities at $7,000 per acre based on comparable sales, while using a cost approach for improvements. LFPOA's experts argue that the value of amenities contributes to the increased value of individual lots, asserting that taxing amenities separately constitutes double taxation. Ownership of the amenities is under LFPOA, a non-profit corporation. Board experts indicated that lots in Lake Forest sell for approximately $4,000 less than similar lots elsewhere. LFPOA is depreciating its improvements, valued at around $8,000,000. The Baldwin County tax assessor valued the amenities at $6,031,000 for 1991, a valuation with which LFPOA agrees. The court concluded that: a) the evidence does not support LFPOA's claim that the value of the amenities enhances the lots' value; b) the rights to use the amenities do not diminish the amenities' value; c) LFPOA has not been denied equal protection and due process; d) the Board's valuation is neither excessive nor arbitrary; and e) the court rules in favor of the Board, with costs assessed to LFPOA. The circuit court's judgment is affirmed.