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Board of Appeal and Equalization Handbook Role of the board in the assessmentprocess The Board of Appeal and Equalization has the authority to change the valuation or classification of a property for the current assessment year. Taxes or prior year assessments are not within the jurisdiction of the board. Any decisions made by the board must be supported by facts and by Minnesota law. The board must make informed decisions and ensure all taxpayers are treated fairly anduniformly. In order to make an informed decision on the valuation or classification of a property, it is important to understand the concepts of valuation and classification. These two concepts are equally important in the assessment process. They are both determined on the assessment date, January 2, each year. We will look at the definition of market value and explain how classifications are determined. Market value State law requires that all property shall be valued at its market value (Minnesota Statutes, Section 273.11, subdivision 1). Minnesota Statutes, Section 272.03, subdivision 8 defines “market value” as follows: “ ‘Market value’ means the usual selling price at the place The price that would tend to prevail under where the property to which the term is applied shall be at typical, normal competitive open market the time of assessment; being the price which could be conditions. obtained at a private sale or an auctionsale,ifitis determinedbytheassessorthatthe price from the auction sale represents an arm's-length transaction. The price obtained at a forced sale shall not be considered.” Many professional appraiser/assessor organizations have a more detailed definition of market value. The elements of these definitions can be used to clarify the statutory definition. The definition of market value usually implies the consummation of a sale as of a specific date under the following conditions: The buyer and seller are typicallymotivated; Both parties are well informed or well advised and bothareactinginwhatisconsideredtobetheirown bestinterest; A reasonable time is allowed for exposure inthe openmarket; Payment is made in cash or itsequivalent; Financing, if any, is on terms generally available in the community on the specified date and typical for the property type in its locale;and The price represents a normal consideration for the property sold unaffected by special financing amounts and/or terms, services, fees, costs or credits incurred in thetransaction. In other words, market value is the price that would tend to prevail under typical, normal competitive open market condition 5