Clarfield v. Municipal Property Assessment Corporation, 2015 CanLII 18293

Assessment Review Board Commission de révision de l’évaluation foncière

ISSUE DATE: April 1, 2015 FILE NO.: WR 127245 Assessed Person(s): Michael Wulkan and Dana Patricia Clarfield Appellant(s): Dana Clarfield Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 14 Respondent(s): City of Markham Property Location(s): 10 Sir Constantine Drive Municipality(ies): City of Markham Roll Number(s): 1936-040-350-66500-0000 Appeal Number(s): 2986557, 3021948 and 3080847 (deemed 2015) Taxation Year(s): 2013, 2014 (and deemed 2015) Hearing Event No.: 562725 Legislative Authority: Section 40 of the Assessment Act, R.S.O. 1990, c. A.31, as amended ARB Case Name: WR 127245 Heard: August 21, 2014, in Markham, Ontario

APPEARANCES:

Parties	Representative
Dana Clarfield	Self-represented
MPAC	Leah George and Tanya Papaikonomou
City of Markham	No one appeared

DECISION OF THE BOARD DELIVERED BY TANYA WALKER

BACKGROUND

1The property under appeal is located at 10 Sir Constantine Drive in the City of Markham. It was built in 1971 and is a detached single-family dwelling. It has a total building area of 1,238 square feet (“sq. ft.”) and is situated on a lot that comprises 6,620 sq. ft.

SUBMISSIONS

2Leah George and Tanya Papaikonomou, the representatives for MPAC, contend that the assessed value of $410,000 for the subject property is reasonable, based on comparisons to six other properties in the vicinity. Ms. George and Ms. Papaikonomou also submitted a study of the sale prices of 130 properties in the vicinity of the subject property to demonstrate a 10.6% increase in sale prices for these properties from December 2011 to December 2012.

3Dana Clarfield, the Appellant, submits that the subject property is assessed at too high a value in light of its state of repair and in comparison to the assessment and sale values of certain nearby properties.

ISSUE

4The Assessment Review Board (“Board”) must determine the correct current value for the subject property, and if that value is equitable with assessments of similar lands in the vicinity.

DECISION

5The Board determines the current value of the subject property to be $499,900 (rounded) as of the January 1, 2012 valuation date.

6The Board has made reference to the assessments of similar lands in the vicinity and finds that no adjustment is required to make the current value as determined above equitable with the assessments of similar properties in the vicinity.

7The Board notes that the adjusted value of $419,900 to account for the cost of curing defects to the subject property is still higher than the assessed value as returned of $410,000. Accordingly, for the 2013 and 2014 taxation years, the assessment of the subject property is confirmed at $410,000,

REASONS FOR DECISION

The Legislation

8In determining the value at which land shall be assessed, the Board must have regard to the following provisions of the Assessment Act (“Act”).

9Section 1 of the Act states:

“current value” means, in relation to land, the amount of money the fee simple, if unencumbered, would realize if sold at arm’s length by a willing seller to a willing buyer.

10Section 19(1) of the Act states:

19(1) Assessment based on current value. – The assessment of land shall be based on its current value.

11Section 19.2(1) of the Act states:

19.2(1) Valuation days. – Subject to subsection (5)¹, the day as of which land is valued for a taxation year is determined as follows:

2. For the period consisting of the four taxation years from 2009 to 2012, land is valued as of January 1, 2008.

3. For each subsequent period consisting of four consecutive taxation years, land is valued as of January 1 of the year preceding the first of those four taxation years.

Section 44(3) of the Act states:

44.(3) Same, 2009 and subsequent years. – For 2009 and subsequent taxation years, in determining the value at which any land shall be assessed, the Board shall,

(a) determine the current value of the land; and

(b) have reference to the value at which similar lands in the vicinity are assessed and adjust the assessment of the land to make it equitable with that of similar lands in the vicinity if such an adjustment would result in a reduction of the assessment of the land.

12Section 40.(17) of the Act states:

40.(17) Burden of proof. -- For 2009 and subsequent taxation years, where value is a ground of appeal, the burden of proof as to the correctness of the current value of the land rests with the assessment corporation.

Analysis

13Under the Act the Board is required to:

1. Find the current value of the subject property.
2. Make reference to the value at which similar lands in the vicinity are assessed.
3. Adjust the assessment of the subject property if the adjustment would result in a reduction in the assessment.

Current Value

14The best measure of the current value of a property is the price at which it sold in an arm’s-length transaction on the valuation date. In the absence of such a transaction, the Board must consider recent arm’s-length sales of comparable properties in the same vicinity.

Comparator Properties

15Ms. George and Ms. Papaikonomou introduced a Valuation Report containing a Market Analysis Study into evidence as Exhibit A. The Market Analysis Study compares six sold properties to the subject property, as detailed in Table 1 below.

Table 1

	Subject Property	Sale A	Sale B	Sale C
Address	10 Sir Constantine Drive	87 Parkway Avenue	45 Sir Bedevere Place	5 Sir Ector Court
Year Built	1971	1971	1971	1971
Bldg. Size (sq. ft.)	1,238	1,209	1,289	1,209
Lot Size (sq. ft.)	6,620	6,600	6,600	7,465
Bedrooms	3	3	3	3
Storeys	1	1	1	1
Basement Area (sq. ft.)	1,238	1,209	1,289	1,209
Sale Amt. ($)		522,000	520,100	548,000
Sale Date		2012/09	2012/07	2012/07
Time adj. sale amt. ($)		484,874	492,105	518,503

	Subject Property	Sale D	Sale E	Sale F
Address	10 Sir Constantine Drive	27 Sir Caradoc Place	37 Sir Bodwin Place	12 Sir Bodwin Place
Year Built	1971	1972	1972	1972
Bldg. Size (sq. ft.)	1,238	1,212	1,212	1,148
Lot Size (sq. ft.)	6,620	6,600	9,015	6,600
Bedrooms	3	3	3	4
Storeys	1	1	1	1
Basement Area (sq. ft.)	1,238	1,212	1,117	592
Sale Amt. ($)		531,000	527,700	488,650
Sale Date		2012/09	2012/06	2012/07
Time adj. sale amt. ($)		493,234	504,048	462,347

16Ms. George and Ms. Papaikonomou acknowledge that the properties which are the subjects of Sales C and E are superior to the subject property.

17Ms. George and Ms. Papaikonomou submit that the properties which are the subjects of Sales A, B, D and F are relatively comparable to the subject property. Ms. George and Ms. Papaikonomou submit that the best comparator is the property which is the subject of Sale B. The time-adjusted sale amount for the property which is the subject of Sale B is $492,105. Accounting for the fact that the property which was the subject of Sale B is slightly larger than the subject property, Ms. George and Ms. Papaikonomou estimate the current value of the subject property to be $487,105. MPAC has reduced the assessment value by approximately $80,000 to account for the cost of curing defects to the subject property. Ms. George and Ms. Papaikonomou therefore contend that a current value of $410,000 is reasonable. MPAC conducted an inspection of the subject property on June 10, 2014 to confirm that the amount of the reduction is appropriate.

18A Letter of Opinion submitted into evidence as Exhibit F by Ms. Clarfield and prepared by real estate agent Robert Atkinson states that the subject property would have sold for a price in the range of $387,000 to $398,000 as of the valuation date. The Board notes however that Mr. Atkinson states that his opinion does not address “matters legal in character.”

19A second Letter of Opinion submitted into evidence as Exhibit G by Ms. Clarfield and prepared by real estate agent John Procenko states that the current market value of the subject property is in the range of $475,000. The Board notes that Mr. Procenko’s letter explicitly states that it is not to be used in a court of law.

20Ms. Clarfield submitted into evidence as Exhibit H a Letter of Opinion prepared by real estate agents Rhonda Barresi and Lesley O’Connor which is dated June 18, 2014. Ms. Barresi and Ms. O’Connor suggest a list price of $499,900 for the subject property in its current state of repair.

21Ms. Clarfield also submitted into evidence as Exhibit I a Letter of Opinion prepared by real estate agent Sylvia Morris dated May 19, 2011. Ms. Morris estimated the value of the subject property to be $349,900 as of May 19, 2011. Ms. Morris states that her opinion does not extend to “matters legal in character.”

22Ms. Clarfield submitted her own set of comparable sales, as detailed in Table 2 below. The comparable sales are preferred to the opinion evidence submitted by Ms. Clarfield as they permit greater scrutiny and analysis by the Board.

Table 2

	Subject Property	Sale I	Sale II	Sale III
Address	10 Sir Constantine Drive	8 Sir Constantine Drive	44 Sir Bedevere Place	77 Parkway
Year Built	1971	1972	1971	1971
Bldg. Size (sq. ft.)	1,238	1,240	1,210	1,209
Lot Size (sq. ft.)	6,620	6,620	6,581	6,660
Bedrooms	3	4	3	3
Storeys	1	1	1	1
Basement Area (sq. ft.)	1,238	1,240	1,210	1,209
Sale Amt. ($)		385,000	443,500	610,000
Sale Date		2009/12	2010/10	2014/07
Time adj. sale amt. ($)

	Subject Property	Sale IV	Sale V	Sale VI
Address	10 Sir Constantine Drive	2 Sir Constantine Drive	50 Sir Bedevere Place	1 Sir Caradoc
Year Built	1971	1971	1971	1971
Bldg. Size (sq. ft.)	1,238	1,151	1,338	1,353
Lot Size (sq. ft.)	6,620	6,654	7,034	7,116
Bedrooms	3	4	3	4
Storeys	1	1	1	1
Basement Area (sq. ft.)	1,238	1,151	1,338	1,270
Sale Amt. ($)		426,500	497,000	450,000
Sale Date		2010/12	2014/07	2011/08
Time adj. sale amt. ($)

	Subject Property	Sale VII	Sale VIII	Sale IX
Address	10 Sir Constantine Drive	57 Sir Bodwin	5 Sir Ector	3 Sir Caradoc
Year Built	1971	1972	1971	1971
Bldg. Size (sq. ft.)	1,238	1,222	1,209	1,151
Lot Size (sq. ft.)	6,620	7,835	7,465	6,863
Bedrooms	3	3	3	4
Storeys	1	1	1	1
Basement Area (sq. ft.)	1,238	1,222	1,209	1,151
Sale Amt. ($)		447,000	548,000	486,000
Sale Date		2010/05	2012/07	2010/09
Time adj. sale amt. ($)			518,408

	Subject Property	Sale X	Sale XI	Sale XII
Address	10 Sir Constantine Drive	7 Sir Bedevere Place	5 Sir Constantine Drive	35 Sir Caradoc
Year Built	1971	1971	1972	1972
Bldg. Size (sq. ft.)	1,238	1,209	1,120	1,351
Lot Size (sq. ft.)	6,620	6,566	7,562	7,386
Bedrooms	3	3	3	4
Storeys	1	1	1	1
Basement Area (sq. ft.)	1,238	1,209	592	1,181
Sale Amt. ($)		440,000	449,000	475,000
Sale Date		2011/06	2011/08	2011/11
Time adj. sale amt. ($)

	Subject Property	Sale XIII	Sale XIV	Sale XV
Address	10 Sir Constantine Drive	23 Sir Bodwin	61 Sir Bodwin	20 Paramount
Year Built	1971	1972	1972	1956
Bldg. Size (sq. ft.)	1,238	1,212	1,351	1,380
Lot Size (sq. ft.)	6,620	6,886	10,750	7,735
Bedrooms	3	3	4	5
Storeys	1	1	1	1
Basement Area (sq. ft.)	1,238	1,117	1,181	1,380
Sale Amt. ($)		N/A	410,000	N/A
Sale Date		N/A	2009/12	N/A
Time adj. sale amt. ($)

23The Board finds Sales I, II, III, IV, V, VII, IX and XIV to be too remote in time from the January 1, 2012 valuation date to be of much assistance. Also, there is no sales information available for Sales XIII and XV. The Board rejected Sales C, E, and F as dissimilar to the subject property in terms of lot size.

24The Board finds that the properties which are the subjects of Sales A, B and D in Table 1 and Sales VI, VIII, X, XI and XII in Table 2 are substantially similar to the subject property in terms of building size, lot size and age and are sufficiently proximate in time to the January 1, 2012 valuation date to serve as useful comparators.

25Unfortunately time-adjustment factors to the period prior to December 2011 were not provided. However, the time-adjusted sale amount per square foot for the properties which are the subjects of Sales A, B, D and VIII are as follows:

Sale	Building size (sq. ft.)	Time-adjusted sale amount ($)	Time-adjusted sale amount per sq. ft. ($)
A	1,209	484,874	401.05
B	1,289	492,105	381.77
D	1,212	493,234	406.96
VIII	1,209	514,408	425.48
Average			403.82

26Based on the building size of the subject property and the average time-adjusted sale amount per square foot of the above comparators, the current value of the subject property is $499,922.97 or $499,900 (rounded).

Average Municipal Increase

27Ms. Clarfield submitted a Property Assessment Notice for the subject property issued by MPAC into evidence as Exhibit C. The Property Assessment Notice states that the assessed value of the subject property has increased 8.94% since the 2012 tax year while the average assessment of residential properties within the municipality has only increased by 7.86%.

28Based on the average percentage increase in assessment values for the municipality, Ms. Clarfield submits that the subject property is overvalued by $13,000.

29The Board notes that the City of Markham encompasses a vast number of residential properties with widely differing characteristics. As such, an overall average of the increases across the municipality is of little assistance to the Board.

Adjustment to Account for Defects

30Ms. Clarfield identified defects to the subject property including the presence of mould in the kitchen, a crack in the foundation and a poorly performing air conditioning unit. The inspection of the subject property by MPAC confirmed the presence of these and other defects. The issue before the Board is the appropriate adjustment which should be made to account for these defects.

31Ms. Clarfield submits that the $80,000 adjustment allowed by MPAC for the cost of necessary repairs to the subject property is insufficient and that an additional adjustment of between $20,000 - $70,000 is required.

32Ms. Clarfield bases this submission upon estimates prepared by the above-mentioned real estate agents with respect to the cost of repairs necessary to prepare the property for sale. Mr. Atkinson states that a minimum of $100,000 would need to be invested in the subject property to prepare it for sale. Ms. Morris estimated that a minimum investment of $75,000 would have been required to raise the subject property to the selling standards for the area. Mr. Procenko states that $100,000 to $150,000 should be invested in the subject property. He states however, that this investment would add to the value of the subject property. A further estimate prepared by Bellavance Home Design and submitted into evidence by Ms. Clarfield as Exhibit E states that the labour and material cost of certain repairs would total approximately $58,000. The Board notes that this opinion does not address all of the defects identified by Ms. Clarfield.

33The Board notes that MPAC has conceded the existence of defects to the subject property and has considered the evidence submitted by Ms. Clarfield with respect to the cost of repairing these defects.

34The Board notes that the evidence presented by Ms. Clarfield consists of the opinions of several realtors, rather than accredited repair estimates. The Board further notes that several of the Letters of Opinion submitted by Ms. Clarfield contained qualifiers stating that they were not to be used for the purposes of legal proceedings. Additionally, the Letters of Opinion lack precision with respect to the cost of necessary repairs. For instance, Mr. Procenko states, “I don’t know for sure how much this would cost, but I am guessing in the $100,000 - $150,000 range.”

35Further, the Board notes that not all of the defects identified in the Letters of Opinion would necessarily be costly to correct. For instance, Ms. Barresi and Ms. O’Connor state, “the home is cluttered and much of the living space is essentially unusable because of excessive amounts of personal belongings and debris.”

36For these reasons, the Board is not prepared to allow an adjustment of more than $80,000, as conceded by MPAC. The Board therefore adjusts the current value as determined above of $499,900 by $80,000 to $419,900 to account for the cost of curing defects to the subject property.

Reference to Similar Lands in the Vicinity

37The assessment to sales ratio (“ASR”) of a property compares its value as assessed with its sales price. An ASR of 1.00 indicates that the assessment value is identical to the sales price.

38Ms. George introduced a study of 371 residential properties in the area. This study demonstrated that MPAC’s assessment methodology achieved equitable assessments because the median time-adjusted ASR was 1.00, which falls within the acceptable range of 0.90 – 1.10, as mandated by the International Association of Assessing Officers and, accordingly, that no equity adjustment is required.

39Ms. Clarfield submitted a Property Assessment Notice for the subject property issued by MPAC. The Property Assessment Notice states that the assessed value of the subject property has increased 8.94% since the 2012 tax year while the average assessment of residential properties within the municipality has only increased by 7.86%.

40Based on the average percentage increase in assessment values for the municipality, Ms. Clarfield submits that the subject property is overvalued by $13,000.

41The Board notes that the City of Markham encompasses a vast number of residential properties with widely differing characteristics. As such, an overall average of the increases across the municipality is of little assistance to the Board.

42Ms. Clarfield introduced into evidence as Exhibit K a summary of the assessment values of certain properties in the vicinity of the subject property as detailed in Table 3 below:

Table 3

	Subject Property	Property 1	Property 2	Property 3
Address	10 Sir Constantine Drive	30 Sir Caradoc	12 Sir Constantine Drive	20 Sir Constantine Drive
Year Built	1971	1972	1971	1971
Bldg. Size (sq. ft.)	1,238	1,241	1,296	1,226
Lot Size (sq. ft.)	6,620	6,600	6,588	6,600
Bedrooms	3	3	3	3
Storeys	1	1	1	1
Basement Area (sq. ft.)	1,238	1,241	1,296	1,226
Current Assessment Value ($)	410,000	482,000	494,000	483,000
Sale Amt. ($)		N/A	N/A	N/A
Sale Date		N/A	N/A	N/A
Time adj. sale amt. ($)

	Subject Property	Property 4	Property 5	Property 6
Address	10 Sir Constantine Drive	11 Sir Constantine Drive	15 Sir Constantine Drive	17 Sir Constantine Drive
Year Built	1971	1971	1972	1972
Bldg. Size (sq. ft.)	1,238	1,151	1,212	1,212
Lot Size (sq. ft.)	6,620	6,850	6,600	6,600
Bedrooms	3	4	3	3
Storeys	1	1	1	1
Basement Area (sq. ft.)	1,238	1,151	1,212	1,212
Current Assessment Value ($)	485,000	489,000	489,000
Sale Amt. ($)		N/A	N/A	N/A
Sale Date		N/A	N/A	N/A
Time adj. sale amt. ($)

	Subject Property	Property 7	Property 8	Property 9
Address	10 Sir Constantine Drive	22 Sir Constantine Drive	21 Sir Constantine Drive	19 Sir Constantine Drive
Year Built	1971	1971	1972	1972
Bldg. Size (sq. ft.)	1,238	1,352	1,241	1,338
Lot Size (sq. ft.)	6,620	6,600	6,600	6,600
Bedrooms	3	3	3	3
Storeys	1	1	1	1
Basement Area (sq. ft.)	1,238	1,352	1,241	1,338
Current Assessment Value ($)	503,000	504,000	502,000
Sale Amt. ($)		N/A	N/A	N/A
Sale Date		N/A	N/A	N/A
Time adj. sale amt. ($)

	Subject Property	Property 10	Property 11	Property 12
Address	10 Sir Constantine Drive	8 Sir Bedevere	39 Rougecrest	20 Paradise
Year Built	1971	1971	1954	1954
Bldg. Size (sq. ft.)	1,238	1,120	1,582	1,118
Lot Size (sq. ft.)	6,620	6,606	7,700	7,700
Bedrooms	3	4	3	3
Storeys	1	1	1.25	1
Basement Area (sq. ft.)	1,238	1,120	1,134	1,118
Current Assessment Value ($)	485,000	547,000	465,000
Sale Amt. ($)		N/A	465,000	455,000
Sale Date		N/A	2011/11	2011/03
Time adj. sale amt. ($)

	Subject Property	Property 13	Property 14	Property 15
Address	10 Sir Constantine Drive	12 Wignall	65 Wootten	8 Reesorville
Year Built	1971	1955	1971	1972
Bldg. Size (sq. ft.)	1,238	972	995	1,521
Lot Size (sq. ft.)	6,620	9,077	7,888	7,702
Bedrooms	3	3	3	4
Storeys	1	1	1	1
Basement Area (sq. ft.)	1,238	972	995	1,521
Current Assessment Value ($)	422,000	489,000	576,000
Sale Amt. ($)		475,000	430,000	500,000
Sale Date		2013/01	2012/08	2013/01
Time adj. sale amt. ($)			402,910

	Subject Property	Property 16	Property 17	Property 18
Address	10 Sir Constantine Drive	40 Sir Bedevere	1 Sir Bodwin	9 Sir Bodwin
Year Built	1971	1971	1971	1971
Bldg. Size (sq. ft.)	1,238	1,354	1,238	1,218
Lot Size (sq. ft.)	6,620	9,675.27	6,600	6,600
Bedrooms	3	3	3	3
Storeys	1	1	1	1
Basement Area (sq. ft.)	1,238	1,354	1,238	1,218
Current Assessment Value ($)	590,000	484,000	482,000
Sale Amt. ($)		720,000	N/A	539,000
Sale Date		2014/03	N/A	2014/05
Time adj. sale amt. ($)

	Subject Property	Property 19	Property 20	Property 21
Address	10 Sir Constantine Drive	22 Sir Bodwin	22 Sir Bedevere	29 Major Buttons
Year Built	1971	1972	1971	1968
Bldg. Size (sq. ft.)	1,238	1,241	995	1,218
Lot Size (sq. ft.)	6,620	6,600	6,707	6,600
Bedrooms	3	3	3	3
Storeys	1	1	1	1
Basement Area (sq. ft.)	1,238	1,241	995	1,218
Current Assessment Value ($)	479,000	473,000	482,000
Sale Amt. ($)		N/A	N/A	539,000
Sale Date		N/A	N/A	2014/05
Time adj. sale amt. ($)

	Subject Property	Property 22	Property 23
Address	10 Sir Constantine Drive	90 Parkway	12 Sir Bodwin
Year Built	1971	1971	1972
Bldg. Size (sq. ft.)	1,238	1,210	1,148
Lot Size (sq. ft.)	6,620	6,600	6,600
Bedrooms	3	3	4
Storeys	1	1	1
Basement Area (sq. ft.)	1,238	1,210	592
Current Assessment Value ($)	513,000	486,000
Sale Amt. ($)		490,000	488,650
Sale Date		2013/09	2012/07
Time adj. sale amt. ($)			462,262.90

43The Board notes that the assessed values of the above properties are all reasonably proximate to the current value as determined above, before the cost of curing defects is accounted for. Also, the current value falls within the range of assessed values of $483,000 to $504,000 for those properties on Sir Constantine Drive.

44The Board finds that the evidence does not support the conclusion that the current value of the property as determined above requires an equity reduction.

45The Board notes that the adjusted value of $419,900 to account for the cost of curing defects to the subject property is still higher than the assessed value as returned of $410,000. Accordingly, for the 2013 and 2014 taxation years, the assessment of the subject property is confirmed at $410,000.

2015 DEEMED APPEAL

46An appeal for the 2014 taxation year is presently before the Board. Section 40.(26) provides that the appellant is deemed to have made the same appeal for the subsequent taxation year if the appeal is not finally disposed of before March 31 of the subsequent taxation year. The Board has not disposed of the 2014 appeal before March 31, 2015. For that reason, this decision also applies to the 2015 taxation year.

47Section 40.(26) of the Act directs:

Deemed appeals, 2009 and subsequent years

For 2009 and subsequent taxation years, an appellant shall be deemed to have brought the same appeal in respect of a property,

(a) in relation to the assessments under sections 32, 33 and 34 for the year; and

(b) in relation to the assessment, including assessments under sections 32, 33 and 34, for a subsequent taxation year to which the same general reassessment applies, if the appeal is not finally disposed of before March 31 of the subsequent taxation year or, if an assessment has been made under section 32, 33 or 34, before the 90th day after the notice of assessment was mailed.

Footnotes

1. 1Subsection 5 permits the Minister to prescribe a different valuation day. A different day has not been prescribed.