Home / Fulltext Opinions / Supreme Court of Virginia / ORCHARD GLEN EAST, INC. v. BOARD OF SUPERVISORS OF PRINCE WILLIAM COUNTY (59898)





September 12, 1997
Record No. 961603





LeRoy F. Millette, Jr., Judge
Present: Carrico, C.J., Compton, Stephenson,[1] Lacy, Keenan, and
Koontz, JJ., and Poff, Senior Justice

In this appeal, we consider whether a condominium development,
in which no individual units were sold or offered for sale by the
developer, was properly assessed for real estate taxes based on
the value of the individual units as separate parcels, rather
than on the value of the development as a single parcel actually
used as an apartment complex.

The essential facts are not in dispute. Orchard Glen East,
Inc. (Orchard Glen) planned, designed, and constructed the
development in question on its property in Prince William County
(the County). Orchard Glen recorded the appropriate condominium
declaration, or condominium instruments, in the land records of
the County, subjecting the development to the provisions of the
Condominium Act, Code ?? 55-79.39
through -79.103. Thereafter, beginning in 1988, it constructed
243 individual condominium units in a three?phase project.

As a result of an ongoing evaluation of the local housing
market during an early stage of the construction, Orchard Glen
decided to lease the individual units as apartments rather than
to market them as condominium units. Consequently, as each phase
of construction was completed, the units in that phase were
leased as apartments. Orchard Glen has never sold or offered for
sale as a condominium any of the individual units within its
development even though, at all times relevant to the tax
assessments at issue, it could have done so pursuant to the
recorded declaration.

On December 28, 1994, Orchard Glen filed an application in the
trial court, as authorized by Code ? 58.1-3984, to correct
alleged erroneous tax assessments by the County on the project
for the years 1991, 1992, 1993, and 1994. Orchard Glen asserted
that overassessments ranging from 2.8 to 6.8 million dollars had
been made for those years. On May 4, 1995, Orchard Glen filed an
application to reduce the assessment for 1995 by 5.7 million
dollars. In each instance, Orchard Glen asserted that the
assessments were erroneous because, rather than being made on its
property as a single apartment complex, the assessments were made
on the individual units as separate parcels. The trial court
consolidated the two cases for trial.[2]

Ruling on pre-trial motions, the trial court granted partial
summary judgment for the County, finding that Code ? 55-79.42 permitted a
taxing authority "to assess a condominium project as
individual condominium units even if no individual unit has been
sold," and further finding that Code ? 58.1?3202, requiring
local taxing authorities to assess multi-unit real estate leased
to residential tenants without regard to the property’s potential
value as a condominium, had no application to a property already
subject to condominium instruments.

At the subsequent evidentiary hearing, the principal evidence
presented by the parties consisted of expert testimony concerning
the method of assessing the property to determine its fair market
value for tax purposes. Orchard Glen’s position was that the
property should be assessed as an apartment complex and in
comparison to other properties being similarly used because this
was its highest and best use under market conditions. The County
maintained that, so long as the condominium declaration remained
in force, the highest and best use of the property was as a
condominium and, thus, the individual units were to be assessed
according to their value as separate parcels of real estate.[3]

The trial court entered judgment for the County, finding that
the assessment of the property as a unitary apartment complex
"would result in the property being assessed at its ‘use
value’ which, in this case, is different and less than the
property’s ‘fair market value’" as individual condominium
units, for which the trial court found that there was an active
market in the County. The trial court further found that the
parties had stipulated to the presumption of correctness in the
County’s assessment of the individual units and that Orchard Glen
"failed to produce sufficient evidence that the County’s
original assessments . . . were the result of manifest
error." We awarded Orchard Glen this appeal.


We begin our analysis of the issues presented in this appeal
with a focus on the primary assertion of Orchard Glen. The
essence of that assertion is that during the tax years in
question its project was an apartment complex and not a
condominium and, thus, its project was erroneously taxed as a

Although Orchard Glen had recorded the appropriate condominium
instruments, it asserts that because it leased rather than sold
the individual condominium units it had not created
"statutorily complete" condominium units in its
project. In support of this assertion, Orchard Glen relies upon
the statutory definition of condominium found in Code ? 55-79.41 which
provides that:

"[c]ondominium" means real property
. . . lawfully submitted to this chapter by the
recordation of condominium instruments . . . .
No project shall be deemed a condominium within the
meaning of this chapter unless the undivided interests in the
common elements are vested in the unit owners

Orchard Glen contends that the emphasized language in this
statutory definition means that no condominium exists until at
least one individual unit is sold. This is so, it reasons,
because, under common law principles, it cannot be a tenant in
common with itself in the common elements of the project. Thus,
Orchard Glen concludes that, as the owner of all the individual
units which it leased to individual tenants, it owned an
apartment complex and not a condominium complex. We disagree.

As estates in land, condominiums are creatures of statute
wholly unknown at common law, see Cooper v. Kolberg,
247 Va. 341, 348, 442 S.E.2d 639, 643 (1994), and the creation of
a condominium is controlled by the Condominium Act. Code ? 55?79.45
specifically addresses the creation of a condominium and provides
that "[n]o condominium shall come into existence except by
the recordation of condominium instruments pursuant to the
provisions of this chapter." Code ? 55?79.72:1(A)
provides that "[i]f there is no unit owner other than the
declarant, the declarant may unilaterally terminate the
condominium." We have previously held that the rights and
liabilities afforded to a condominium under the Condominium Act
accrue at the time the master deed, now the condominium
instruments, is recorded. See United Masonry, Inc. v.
Jefferson Mews, Inc.
, 218 Va. 360, 377, 237 S.E.2d 171, 182
(1977). Accordingly, we hold that a condominium is created upon
the recordation of the appropriate condominium instruments and is
not dependent upon the subsequent sale of one of the individual
condominium units within the condominium project. For these
reasons, we reject Orchard Glen’s assertion that its project was
an apartment complex and not a condominium complex for purposes
of the issues presented in this appeal.

For similar reasons, we reject Orchard Glen’s contention that
Code ? 55?79.42
requires a taxing authority to treat a condominium in which no
units have been transferred as a single parcel. Orchard Glen
relies on language in that statute which directs that the unit of
"any unit owner other than the declarant . . .
shall be separately assessed and taxed." Id. However,
nothing in Code ? 55?79.42
prohibits the taxing authority from treating as separate parcels
of real estate any completed units still in the possession of the
declarant. To the contrary, the statute expressly states that
once a unit is completed, it "constitutes for all
a separate parcel of real estate." Id.
(emphasis added.)

Read in its full context, Code ? 55?79.42 permits the
taxing authority to assess individually each completed unit in a
condominium project without regard to ownership, and to include
in that assessment a proportional share of the assessment of
common areas of the project which are not subject to withdrawal
or conversion by the declarant. Common areas which remain subject
to withdrawal or conversion by the declarant are to be assessed
separately as the sole property of the declarant. Orchard Glen’s
project was fully developed, with no common areas subject to
withdrawal or conversion. Accordingly, each unit was subject to
assessment as an individual parcel.

We also find no merit in Orchard Glen’s assertion that Code ? 58.1-3202 bars the
County from assessing its property as a condominium rather than
as a unitary apartment complex.

Code ? 58.1?3202,
in pertinent part, reads:

 . . . the fair market value of multi-unit real
estate leased primarily to residential tenants shall be
determined without regard to its potential for conversion to
condominium or cooperative ownership. A sale of apartment
property shall not be presumed to be for such conversion unless
overt action which is a prerequisite to conversion by the buyer
has been taken within three months from the recordation of the

The express language of the statute demonstrates that it
applies to property which has not been made the subject of
recorded condominium instruments. Accordingly, the trial court
correctly determined that this statute had no application to
Orchard Glen’s property because at all times relevant to the
assessments that property was a condominium and no
"conversion to condominium" was involved.

We next consider Orchard Glen’s contention that the amount of
the assessments of the property was disproportionate to that of
other properties in the County which were assessed as unitary
apartment complexes. Orchard Glen contends that since its
property was also being used as a unitary apartment complex, the
assessment of the property as a condominium complex violated the
constitutionally mandated requirement of uniformity in tax
assessments. See Va. Const. art. X, ?? 1 & 2. We

"The constitutional mandate requires uniformity in the
assessment of ‘properties having like characteristics and
qualities, located in the same area.’" Lee Gardens
Arlington Limited Partnership v. Arlington County Board
, 250
Va. 534, 538, 463 S.E.2d 646, 648 (1995)(quoting Smith v. City
of Covington
, 205 Va. 104, 108, 135 S.E.2d 220, 223 (1964)).
Article X, ? 1
expressly provides that "[a]ll taxes shall be levied and
collected under general laws and shall be uniform upon the
same class of subjects
within the territorial limits of the
authority levying the tax." (Emphasis added.)

The class within which Orchard Glen’s property fell during the
assessments at issue was that of property subject to recorded
condominium instruments in which the individual units were
capable of being offered for immediate sale at the owner’s
option. The properties to which Orchard Glen would have the
County compare its assessment for uniformity purposes were not
subject to condominium instruments and, thus, were not capable of
being sold as individual units. Accordingly, these properties
were not of "like characteristics and qualities" to
Orchard Glen’s property, and they do not present an appropriate
comparison for determining the uniformity of the County’s
assessment of the property in question.

Finally, we consider whether the trial court correctly
determined that Orchard Glen failed to carry its burden of
rebutting the presumption of correctness afforded to the County’s
assessment. As noted above, Orchard Glen does not dispute this
standard, and at trial relied primarily on its assertions that
its project was not a condominium complex or that, even if it
was, market conditions dictated that its highest and best use was
as an apartment complex. The County’s position, supported by the
testimony of its expert witnesses, showed that a market existed
for condominiums and that the fair market value of the project if
marketed as a condominium complex exceeded the fair market value
of the project used as an apartment complex. The trial court
considered this evidence and determined that Orchard Glen had not
met its burden. We agree.

Although there was a conflict in the expert evidence, that
conflict alone was insufficient to overcome the presumption
favoring the County. "Courts should be reluctant, within
reasonable bounds, to change assessors’ judgments because courts
are not duly constituted tax authorities." Board of
Supervisors of Fairfax County v. Telecommunications Industries,
, 246 Va. 472, 476, 436 S.E.2d 442, 444 (1993). Here,
there was sufficient evidence supporting the County’s original
assessment of the project’s fair market value at its highest and
best use as a condominium complex. The evidence presented by
Orchard Glen placed the issue, at best, in equipoise, and, thus,
was insufficient to overcome the presumption in favor of the
taxing authority’s judgment. See id. at 475, 436
S.E.2d at 444; Board of Supervisors of Fairfax County v.
Donatelli & Klein
, 228 Va. 620, 627, 325 S.E.2d 342, 345

For these reasons, we will affirm the judgment of the circuit





[1] Justice Stephenson participated
in the hearing and decision of this case prior to the effective
date of his retirement on July 1, 1997.

[2] Prior to filing these
applications, Orchard Glen had applied to the Prince William
County Board of Equalization to have its property assessed for
each of the years in question as a unitary apartment complex. The
Board rejected Orchard Glen’s request but reduced the County’s
assessment of all or some of the individual units for each of the
years in question. The trial court ultimately vacated these
reductions and adopted the fair market value assessments
originally set by the County. The action of the trial court
vacating the reductions granted by the Board is not an issue in
this appeal.

[3] At trial and on appeal the
County has conceded that Orchard Glen merely had to terminate the
condominium instruments in order for the project to be appraised
as a unitary apartment complex. Code ? 55?79.72:1(A). The
parties agree that since the trial of this case this has been
done, and the project is now assessed as a single parcel.