2299900 Ontario Ltd. v. Municipal Property Assessment Corporation, 2015 CanLII 18880

Assessment Review Board / Commission de révision de l’évaluation foncière

ISSUE DATE: April 8, 2015 FILE NO.: WR 130690

Assessed Person(s): 2299900 Ontario Ltd. Appellant(s): 2299900 Ontario Ltd. Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 9 Respondent(s): City of Toronto Property Location(s): 23 Taber Road Municipality(ies): City of Toronto Roll Number(s): 1919-042-090-00700-0000 Appeal Number(s): 3000527 and 3077133 Taxation Year(s): 2014 (and deemed 2015) Hearing Event No.: 570138

Legislative Authority: Section 40 of the Assessment Act, R.S.O. 1990, c. A.31, as amended ARB Case Name: WR 130690 Heard: February 5, 2015 in Toronto, Ontario

APPEARANCES:

Parties	Counsel/Representative
2299900 Ontario Ltd.	Daniel Attard
MPAC	Bashir Mohamed
City of Toronto	No one appeared

DECISION OF THE BOARD DELIVERED BY BARBARA KOWARSKY

ISSUE

1The issue is to determine whether the assessment of 23 Taber Road, located in the City of Toronto (“subject property”) as returned at $1,078,000 for the 2014 taxation year is correct, and whether it is equitable with that of similar lands in the vicinity.

DECISION

2In order to determine the value assessment of a property, the Assessment Review Board (“Board”) is legislated to follow two steps.

3Section 44.(3)(a) of the Assessment Act (“Act”) which requires the Board to:

(a) “determine the current value of the land.”

4The Board determines the current value to be $1,050,000 for the 2014 taxation year.

5Section 44.(3)(b) of the Act directs the Board to:

(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.”

6The Board finds that an adjustment for equity pursuant to s. 44.(3)(b) is required.

7Therefore, the assessment of the subject property is reduced from $1,078,000 to $997,000 for the 2014 taxation year.

REASONS FOR DECISION

The Subject Property

8The subject property is described as an industrial class building erected in 1956 in the section of Toronto, Ontario, known as Etobicoke. There were additions in 1961 and 1981 which resulted in the average year built being amended to 1961. The building has a total area of 12,333 square feet comprising an attached office measuring 1,044 square feet, and 544 square feet of interior finish. The average ceiling height is 15 feet. It is situated on a lot measuring 0.44 acres. The appellant’s representatives agree with the description and the classification.

The Position of MPAC

9MPAC was represented by Bashir Mohamed. He submitted an MPAC summary report into evidence. (Exhibit 1)

10He testified that:

i. The subject property sold in July, 2013 for $1,050,000.

ii. He used the direct sales approach in his assessment analysis that includes six suggested comparable properties that sold between January, 2011 and December, 2012.

iii. In his opinion these “sales are reasonably similar to the subject property. Therefore, no adjustment is required.”

iv. Six of the suggested comparable properties are in close proximity to the subject property. The seventh, 2 Paxman Road, is south of the subject property and experiences the same market area and economic influences.

v. The lot sizes of his suggested comparables range from 0.40 to 1.0 acres; the total building areas range from 8,545 square feet to 14,132 square feet; the ceiling heights range from 14 to 20 feet, and the year built ranges from 1961 to 1966. The sale prices range from $980,000 to $1,470,000.

vi. The mean value per square foot based on the sale price is $118 and the median is $116. The subject is $87 per square foot based on its assessed value.

vii. The subject property falls in the middle of all of these and therefore supports the assessment.

11In summation, Mr. Mohamed testified that since the list price of the subject property had been $1,100,000, it indicates a “worth of no less than $1,000,000 and therefore the assessment should be above $1,000,000.

The Position of the Appellant

12The appellants are represented by Daniel Attard, who was advocate and Andrew Attard, who gave evidence at the hearing.

13Daniel Attard submitted an analysis report (Exhibit 2) into evidence:

14Andrew Attard testified that:

a) The sale of the subject property occurred almost 19 months after the valuation date of January 1, 2012, and therefore should be time adjusted to reflect the value at January 1, 2012.

b) On page 8 of his report he reproduced an expanded MPAC report for the MPAC suggested comparables which includes the interior office finishes. The expanded report reflects that the subject property has five percent; whereas the comparables have 8, 16, 16, 23, 27, 44 and 61 percent interior offices finishes.

c) On page 5 of his report he lists six other industrial sales that occurred between January, 2013 and November, 2013. Five of the assessments are lower than the sale price; and five of the six have lot sizes similar to the subject property.

d) According to his analysis of six properties, the market had risen approximately 16 percent from January 1, 2012 to July, 2013 and therefore when applied to the sale price of the subject property, the current value should be reduced to $882,000.

15Andrew Attard testified that all of the MPAC suggested comparables are superior to the subject property in regard to interior finishes and all have larger lots ranging from 0.04 to 0.56 acres larger than the subject property.

The Legislation

16In arriving at a decision, the Board must consider the following provisions of the Act:

17Section 19.(1) of the Act states:

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

18Section 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.

19Section 19.2(1)(2) of the Act provides:

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.

20Section 40.(17) of the Act provides:

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.

21Section 40.(19) of the Act states:

40.(19) Board to make determination. – After hearing the evidence and the submissions of the parties, the Board shall determine the matter.

22Section 44.(3)(a) and (b) 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.

Analysis and Findings

23The assessment legislation, as amended for taxation year 2009 and subsequent years, directs the Board to determine the current value of the subject property, having reference to the value at which similar lands in the vicinity have been assessed. Once current value is determined, the Board may reduce an assessment where it finds that it is inequitable with that of similar lands in the vicinity.

The Current Value of the Land

24The best evidence of current value is an arm’s length and market tested sale of the subject property on the valuation date, January 1, 2012, or close to it.

25The Board is dismayed that the appropriate time adjustment information, site, building, ceiling height and interior finish adjustments were not provided by MPAC at this hearing. The parties are well aware that MPAC generates this information on a regular basis. In fact, the assessor relied upon those features in earlier appeals today and testified that those features impact on the commercial and industrial properties in the same geographic locale as the subject property.

26In the absence of adjustments by MPAC for these elements, and in particular for the interior finishes differences, the Board prefers basing its determination on the subject property’s actual sale, time adjusted, to MPAC’s sales evidence.

27Andrew Attard did not provide the Board with evidence to support the basis on which his time adjustment calculations were made. He argued that the time adjustment summary is the “% change for Commercial and Industrial Properties located in Region 9”, on page 12 of his report.

28The Board agrees with Mssrs. Attard that the “fairest” approach by MPAC would have been to apply the appropriate time adjustment to the July, 2013 sale price. However, that information was not provided.

29Therefore, the only evidence on which the Board is able to rely, is the sale price of the subject property. The Board finds that the current value of the subject property as at January 1, 2012, is $1,050,000.

Equity with Similar Lands in the Vicinity

30The Board is required under s. 44.(3)(b) of the Act to 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 similar lands in the vicinity if such an adjustment would result in a reduction of the assessment.

31The Board finds that an adjustment for equity pursuant to s. 44.(3)(b) is required. The ASR’s of the seven suggested MPAC comparables is 0.95. When this is applied to the CVA of $1,050,000, the result is $997,500 or $997,000 rounded.

CONCLUSION

32Based on the totality of the evidence presented, coupled with the findings of the Board, the assessment of the subject property is reduced from $1,078,000 to $997,000 for the 2014 taxation year.

2015 DEEMED APPEAL

33An 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.

34Section 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.