Rancho Cincinnati Rivers, L.L.C. v. Warren Cty. Bd. of Revision

Summary

The Supreme Court of Ohio held that R.C. 5713.03 requires real property to be valued as a fee-simple estate as if unencumbered, meaning free of lease encumbrances, but does not require the property to be treated as vacant at transfer. The court adopted a market-lease approach permitting consideration of leases with market terms and affirmed the lower court’s valuation of the Lowe’s property at $8,480,000.

Holdings

1. R.C. 5713.03 requires application of a market-lease rule, not a vacant-at-transfer rule. Property must be valued as if free from an encumbrance such as a lease, but the statute does not require the appraiser to assume that the current tenant vacated or that the property was vacant at the time of transfer.
2. Neither R.C. 5713.03 nor Ohio precedent requires or forbids a fixed property-rights adjustment to comparable sales involving leases. Adjustments are permissible when supported by an appraiser's expert analysis of the relevant market.
3. The common pleas court acted within its discretion by finding the school board's appraisal more probative and adopting its $8,480,000 valuation.

Questions Presented

1. Whether R.C. 5713.03's requirement that real property be valued as a fee-simple estate, as if unencumbered, requires the property to be appraised as vacant at the time of transfer.
2. Whether R.C. 5713.03 requires an appraiser to make fixed property-rights adjustments to comparable sales involving lease encumbrances.
3. Whether the common pleas court abused its discretion by adopting the school board's $8,480,000 appraisal over Rancho's $5,800,000 appraisal.

Disposition

affirmed