Featured Chrome Extensions:

Casey IRACs are produced by an AI that analyzes the opinion’s content to construct its analysis. While we strive for accuracy, the output may not be flawless. For a complete and precise understanding, please refer to the linked opinions above.

Keywords

contractappealtrustlease
contractappealtrustleaserelevance

Related Cases

Attorney Grievance Com’n of Maryland v. McCulloch, 397 Md. 674, 919 A.2d 660
View Case »
Appeal of Marks, 4 W.N.C. 449, 85 Pa. 231, 1877 WL 13316
View Case »
People of State of New York ex rel. Cohn v. Graves, 300 U.S. 308, 57 S.Ct. 466, 81 L.Ed. 666, 108 A.L.R. 721
View Case »
Comptroller of the Treasury v. World Inns, Inc., 310 Md. 154, 528 A.2d 477
View Case »
Miles v. Department of Treasury, 209 Ind. 172, 199 N.E. 372
View Case »
Justia Law Link
LexisNexis Link
Westlaw Link
CourtListener Link
Oyez Link

Springfield Marine Bank v. Property Tax Appeal Bd., 44 Ill.2d 428, 256 N.E.2d 334

Facts

The case involved two parcels of real estate held in trust by Springfield Marine Bank, which were subjected to long-term leases established in 1952. These leases had remaining terms of approximately ten years, and the contractual rent was significantly below current market rates due to the appreciation of property value since the leases were negotiated. The Sangamon County Board of Review and the State Property Tax Appeal Board refused to adjust the assessed value to reflect the unfavorable leases, although the Appeal Board accepted the appraiser's conclusions regarding the property's value without the leases.

The two parcels involved are held in trust by Springfield Marine Bank. In 1952 the bank's predecessor in title subjected the property to long-term leases which have remaining terms of approximately ten years. The value of the property has advanced significantly since the leases were negotiated, and the contractual rent is consequently substantially below that which could now be obtained under new leases.

Issue

Whether the circuit court erred in reducing the assessed value of the property by considering the effect of unfavorable leases on its fair market value.

At issue is the circuit court's revaluation of real property, based upon its finding ‘That in determining the fair market value of land, it is proper to consider the effect on market value of an unfavorable lease.’

Rule

In determining the fair cash value of real property for tax assessment, the value of the property is assessed based on what it would bring at a voluntary sale, rather than the income derived from it, especially when that income is misleading due to unfavorable lease agreements.

The Revenue Act provides that ‘Each tract or lot of real property shall be valued at its fair cash value, estimated at the price it would bring at a fair, voluntary sale.’ (Ill.Rev.Stat.1967, ch. 120, par. 501(1).)

Analysis

The Supreme Court found that the circuit court incorrectly applied the law by allowing the unfavorable leases to influence the assessed value of the property. The court emphasized that the fair cash value should reflect the property's earning capacity rather than the income currently being generated, which was significantly affected by the outdated leases. The court noted that rental income could be a relevant factor, but it should not be the controlling factor in determining fair cash value, particularly when it does not accurately represent the property's true market value.

However, it cannot be the controlling factor, particularly where it is admittedly misleading as to the fair cash value of the property involved. The relevance of rental income in this instance has been so diminished by the change in the property's value since the rents were established that it was properly disregarded.

Conclusion

The Supreme Court reversed the circuit court's judgment and remanded the case with directions to reinstate the assessment approved by the State Property Tax Appeal Board.

Therefore, we reverse the judgment of the Sangamon County circuit court and remand with directions to reinstate the assessment approved by the State Property Tax Appeal Board.

Who won?

The Property Tax Appeal Board prevailed in the case because the Supreme Court found that the circuit court's reduction of the assessed value was erroneous and not supported by the evidence.

Since the evidence before the State Property Tax Appeal Board in this case amply justified the Board's assessment on this basis, we find that the circuit court was incorrect in concluding that the Board's determination was contrary to the manifest weight of the evidence.

You must be