In French Oaks Condominium v. Town of Amherst, 23 NY3d 168 (2014) a condominium board submitted an appraisal report in which its appraiser applied an income cap method to establish value. The Court held that the first step required determination of the net operating income of the condominiums. The second step was determination of the appropriate cap rate. "This can be accomplished by taking the annual net operating income of a comparable and dividing that figure by its sale price." Id citing The Appraisal Institute, The Appraisal of Real Estate, at 514 [11th ed]. The Court held that "to compute the net operating income for the four comparables, the appraiser had to ascertain their gross incomes and expenses." Id at 172. Although the appraiser offered specific figures for these items in his report, he indicated that they were derived from what he referred to as "forecast financials." Id. The appraiser did not explain how he arrived at these income and expense figures and "did not otherwise identify the sources for this component." Id. The Court noted that it had not previously analyzed 22 NYCRR 202.59, which states that: ""The appraisal reports shall contain a statement of the method of appraisal relied on and the conclusions as to value reached by the expert, together with the facts, figures and calculations by which the conclusions were reached. If sales, leases or other transactions involving comparable properties are to be relied on, they shall be set forth with sufficient particularity as to permit the transaction to be readily identified, and the report shall contain a clear and concise statement of every fact that a party will seek to prove in relation to those comparable properties. The appraisal reports also may contain photographs of the property under review and of any comparable property that specifically is relied upon by the appraiser, unless the court otherwise directs." However, the Court reviewed well established case law which holds that "an appraisal should be disregarded when a party violates section 202.59 (g) (2) by failing to adequately set forth the facts, figures and calculations supporting the appraiser's conclusions'." French Oaks, supra, at 176. The Court focused on the second step of cap rate analysis provided by the Board's appraiser, noting that "[s]ince net operating income is one half of the equation in determining the cap rate (net operating income divided by sales price), an accurate calculation is of paramount importance. But other than referencing forecast financials', the appraiser did not provide the sources of the income or expense figures related to each comparable (see Appraisal Institute, The Appraisal of Real Estate, at 514 [11th ed] [Data on each property's sale price, income, expenses, financing terms, and market conditions at the time of sale are needed.'])." Id. The Court also noted that the "hearing testimony of the Board's appraiser revealed that he had little to no confirmable data to support the income and expense numbers he employed to derive the cap rate." When pressed, he proffered that the relevant figures were based on his "personal exposure" to the complexes, i.e., his own unverifiable knowledge. The Court ultimately held that "simply put, the record before us affords no basis to check or test whether the net operating incomes for these four properties -- and the cap rates adduced from them -- were valid, or even in the ballpark." Id at 177. The Court held that "although the substantial evidence standard is not a heavy one, the documentary and testimonial evidence proffered by petitioner must be based on sound theory and objective data. The Board in this case failed to meet this threshold because its appraiser did not support the proposed capitalization rate with objective data necessary to substantiate the component calculations." Id.