Lake Forest Property Owners Ass'n, Inc. v. Baldwin County Bd. of Equalization

• Decision Date: 09 August 1991
• Citation: 587 So.2d 393
• Parties: LAKE FOREST PROPERTY OWNERS ASSOCIATION, INC., a Non-Profit Corporation v. The BALDWIN COUNTY BOARD OF EQUALIZATION, et al. 2900423.
• Court: Alabama Court of Civil Appeals

Page 393

587 So.2d 393

LAKE FOREST PROPERTY OWNERS ASSOCIATION, INC., a Non-Profit Corporation v. The BALDWIN COUNTY BOARD OF EQUALIZATION, et al.

2900423.

Court of Civil Appeals of Alabama.

Aug. 9, 1991.

Daniel G. Blackburn of Stone, Granade, Crosby & Blackburn, Bay Minette, for appellant.

James H. Evans, Atty. Gen., and Ron Bowden, Counsel, Dept. of Revenue, and Asst. Atty. Gen., for appellees.

ROBERTSON, Presiding Judge.

Lake Forest is a residential development in Baldwin County that includes a number of common facilities, including two golf courses, four tennis courts, two swimming pools, stables, a yacht club, a marina, a clubhouse, three dining facilities, and all the grounds associated with each of these. The owner of these common areas is the Lake Forest Property Owners Association, Inc. (LFPOA). However, lot owners within Lake Forest pay mandatory assessments to LFPOA, which then, in turn, uses those monies to operate and maintain both the common areas and the entire subdivision.

The LFPOA appealed to the Circuit Court of Baldwin County following the decision of the Baldwin County Board of Equalization (Board) setting the value of the aforementioned common areas in Lake Forest for ad valorem tax purposes for the tax years 1987, 1988, and 1989. The LFPOA maintains that the valuation by the Board of these common elements is excessive, arbitrary, and unreasonable and, further, that the Board's decision is inconsistent with the treatment afforded to other similarly situated property owners, and that the Board's decision therefore has resulted in the denial of equal protection and due process to the LFPOA.

Following a trial at which evidence was presented ore tenus, the trial court found that it could not say as a matter of law or fact that the taxes being paid by the LFPOA on the common elements were excessive within the meaning of § 40-3-25, Code 1975, or that the ad valorem taxes for the property were inconsistent with those taxes charged to similar properties in Baldwin County.

The LFPOA then filed a motion for new trial, which was denied by the trial court. Following the trial court's denial of its motion for new trial, the LFPOA appealed to our supreme court, which transferred the case to us.

Specifically, beginning in 1987 the Board has separately taxed the common areas within Lake Forest to the LFPOA. The LFPOA has contended that the values of these common areas should be included in the assessed valuation of each of the residential lots, rather than being taxed separately to the LFPOA.

On appeal, the LFPOA asserts three issues; however, we find its first issue, which is one of first impression in Alabama, to be dispositive. Specifically LFPOA maintains that this court must determine when it is permissible to (a) reduce the value of real property due to encumbrances, (b) ascribe the value of a...