OFFICES AND OFFICERS ‑- COUNTY ‑- ASSESSORS ‑- TAXATION ‑- PROPERTY ‑- NECESSITY FOR PHYSICAL INSPECTION
Except as permitted by RCW 84.41.041 based on appropriate statistical data, no revaluation of property for tax purposes can take place without a physical inspection.
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July 22, 1980
Honorable Shirley Winsley
State Representative, 28th Dist.
539 Buena Vista Avenue
Fircrest, Washington 98466 Cite as: AGLO 1980 No. 25
Dear Representative Winsley:
By letter previously acknowledged, you requested the opinion of this office on the following questions relating to the valuation of real property for property tax purposes:
"1. Under what circumstances is a physical inspection required as a part of a revaluation of a parcel of real property?
"2. In cases where a physical inspection is required, how thorough must the inspection be? For example, is the assessor required to inspect the interior of residential property?
"3. If an assessor revalues a property without making a necessary physical inspection, what is the taxpayer's recourse? Can the revaluation be invalidated?"
We answer these questions as set forth in our analysis.
Our starting point in responding to your questions is RCW 84.41.041 which reads as follows:
[[Orig. Op. Page 2]]
"Each county assessor shall cause taxable real property to be physically inspected and valued at least once every four years in accordance with RCW 84.41.030, and in accordance with a plan filed with and approved by the department of revenue. Such revaluation plan shall provide that a reasonable portion of all taxable real property within a county shall be revalued and these newly-determined values placed on the assessment rolls each year. During the intervals between each physical inspection of real property, the valuation of such property may be adjusted to its current true and fair value, such adjustments to be based upon appropriate statistical data.
"The assessor may require property owners to submit pertinent data respecting taxable property in their control including data respecting any sale or purchase of said property within the past five years, the cost and characteristics of any improvement on the property and other facts necessary for appraisal of the property." (Emphasis supplied.)
RCW 84.41.030, the provision referred to in RCW 84.41.041, supra, reads as follows:
"Each county assessor shall maintain an active and systematic program of revaluation on a continuous basis, and shall establish a revaluation schedule which will result in revaluation of all taxable real property within the county at least once each four years."
Previously, a similar requirement was contained in RCW 84.41.040 which, until it was replaced by RCW 84.41.041, supra,1/ provided that:
[[Orig. Op. Page 3]]
"Each county assessor shall cause real property being valued to be physically inspected and shall require such examination as will provide adequate data from which to make accurate valuations. Property which may have been revalued after physical examination by the assessor subsequent to May 31, 1954, shall be considered to have been revalued pursuant to the requirements of this chapter."
In AGO 1969 No. 15, copy enclosed, we concluded that under this earlier version of the law a physical inspection was necessary prior to any changing of the true and fair value of real property for purposes of taxation. In addition, we expressly rejected the proposition that a single physical inspection could serve as the basis for all future revaluations‑-without any further inspections prior to those revaluations. See AGO 1969 No. 15,supra, at p. 3.
We also considered in that opinion the question of what constitutes an adequate physical inspection and said, at pp. 4-5:
"With regard to the question of what constitutes the 'adequate data' which is to be acquired in subsequent physical inspections, we believe that the proper standard is that set forth in Property Tax Bulletin No. 231, quoted above; i.e., it must be determined '. . . that data on each parcel is . . . reasonably up-to-date . . .' Thus, physical inspections which take place after the initial physical inspection of each parcel must be sufficient to determine what relevant physical changes, if any, have occurred in the data gathered in the prior inspection. Accordingly, we would expect that, absent extensive changes such as new construction or major additions to a building, subsequent inspections would serve mainly as a check on data gathered previously, and would not require 'starting from scratch' so far as gathering data is concerned. However, as already concluded, this check, by means of a physical inspection, must be made prior to any change in the true and fair value. . . ."
And, in a footnote on p. 5 we discussed the sanctions for failing to make the required physical inspection, saying:
[[Orig. Op. Page 4]]
". . . Our research has disclosed that authority exists in other states for the proposition that even where a statute provides for actual physical inspection of property for assessment purposes, the failure to physically inspect, while being an irregularity, does not, by itself, defeat the validity of an assessment already made. See,People ex rel. Smith v. Coen, 415 Ill. 73, 112 N.E.2d 119 (1953). However, no such case has been found in this state. Indeed, in view of the fact that our supreme court, in Carkonen, et al. v. Williams, et al., supra, [76 Wn.2d 617, 458 P.2d 280 (1969)] referred to the requirements of RCW 84.41.040 as a justification for a cyclical approach to revaluation, and for the specific revaluation programs in King and Snohomish counties, we would not expect that this same court would countenance any systematic disregard of the requirement."
In addition, before turning directly to your questions we take note of WAC 458-12-339 which, as adopted by the Department of Revenue in 1974, reads in pertinent part as follows:
". . .
"All real property being valued shall be physically inspected at least once every four years in order to provide adequate data from which to make accurate valuations.
"During the interval between each physical inspection, the valuation of real property may be adjusted to current true and fair value using appropriate statistical data. (RCW 84.41.040)
"When records have been developed on every parcel of property, showing sufficient data on which to base accurate valuation, the process of periodic physical inspection will serve to insure (a) that all taxable property is listed, and (b) that data on each parcel is kept reasonably up-to-date, for comparison with data on similar property which have sold, and (c) that the property has been observed as a whole including its environmental elements [[Orig. Op. Page 5]] amentities to the extent necessary to arrive at an estimate of current market value."
Your first question, repeated for ease of reference, asks:
"Under what circumstances is a physical inspection required as a part of a revaluation of a parcel of real property?"
We believe that the answer to this question is clear from the language of RCW 84.41.041,supra, and is essentially the same as that which we indicated in AGO 1969 No. 15,supra, under the statutory predecessor thereto. In general, no revaluation can take place without a physical inspection.
RCW 84.41.041 does, however, contain one exception to this general rule:
". . . During the intervals between each physical inspection of real property, the valuation of such property may be adjusted to its current true and fair value, such adjustments to be based upon appropriate statistical data."2/
We understand from the Department of Revenue that relatively few counties have programs utilizing the types of statistical adjustments contemplated by this exception and that those programs must in every case meet standards established by the department before they can be implemented as part of a revaluation plan. Accordingly, in the absence of a departmentally approved revaluation program which includes the use of statistical updating, a physical inspection is still required before any parcel of real property may be revalued.
[[Orig. Op. Page 6]]
Next you have asked:
"In cases where a physical inspection is required, how thorough must the inspection be? For example, is the assessor required to inspect the interior of residential property?"
We recognize that the reference to such an ". . . examination as will provide adequate data from which to make accurate valuations . . ." which was originally contained in RCW 84.41.040 no longer appears in RCW 84.41.041, supra. But we believe that this standard of "adequate data" is applicable nevertheless. For it is still contained in the implementing rule, WAC 458-12-339, supra, and it is still implied in RCW 84.41.041. A statute requiring a physical inspection for purposes of revaluation certainly cannot be construed to sanction an inspection which provides only inadequate data.
On the question of what constitutes such adequate data we believe that the proper standards are as set forth in so much of AGO 1969 No. 15 as we quoted above at p. 3, and in WAC 458-12-339, quoted above at p. 4. Whether, under those standards, physical inspection of the interior of all residential property would be required is, we believe, essentially a question which would be dependant upon the facts of each individual case. But in the absence of a department rule or regulation requiring such an inspection in all cases we would be reluctant to find such a requirement.3/
Finally, you have inquired as follows:
[[Orig. Op. Page 7]]
"If an assessor revalues a property without making a necessary physical inspection, what is the taxpayer's recourse? Can the revaluation be invalidated?"
Again, our conclusion here is the same as that indicated in footnote 2, p. 5 of AGO 1969 No. 15,supra; i.e., any systematic disregard of the requirement of a physical inspection would, in our opinion, result in a court invalidating the revaluation. We would emphasize, however, the word "systematic." A sporadic or occasional failure to make an adequate inspection would not, in our view, cause a court to reject the new valuation, ab initio, and thereby refuse to reach at all the issue of whether the new valuation represents a correct value.
We trust that the above will be of some assistance to you.
Very truly yours,
TIMOTHY R. MALONE
Assistant Attorney General
*** FOOTNOTES ***
1/For the legislative evolution of RCW 84.41.040 into RCW 84.41.041, see § 7, chapter 288, Laws of 1971, 1st Ex. Sess., §§ 1 and 2, chapter 131, Laws of 1974, 1st Ex. Sess., and § 9, chapter 239, Laws of 1979, 1st Ex. Sess.
2/This exception first appeared in the amendment to RCW 84.41.040 which was enacted by § 7, chapter 288, Laws of 1971, 1st Ex. Sess., supra.
3/We are not here suggesting that a physical inspection of the interior would never be needed. Rather, we are simply saying that such an inspection would not always be needed in all cases.