1429829 Ontario Inc. v. Municipal Property Assessment Corporation, Region 16, 2015 CanLII 18882

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

ISSUE DATE: April 10, 2015

FILE NO.: WR 130787

Assessed Person(s): 1429829 Ontario Inc.

Appellant(s): 1429829 Ontario Inc. and Matthew Kuszewski

Respondent(s): Town of Collingwood

Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 16

Property Location(s): 15 Silver Creek Drive

Municipality(ies): Town of Collingwood

Roll Number(s): 4331-040-002-24900-0000

Appeal Number(s): 3000602, 3022975 and 3087712 (deemed 2015)

Taxation Year(s): 2013, 2014 (and deemed 2015)

Hearing Event No.: 578330

Legislative Authority: Section 40 of the Assessment Act, R.S.O. 1990, c. A.31, as amended

Heard: February 17, 2015, in Collingwood, Ontario

APPEARANCES:

Parties	Representative
1429829 Ontario Inc. and Matthew Kuszewki	Amanda Bauhofer
MPAC	Patricia Thompson
Town of Collingwood	No one appeared

DECISION OF THE BOARD DELIVERED BY LESLIE FLEMMING

INTRODUCTION

1This appeal was heard in the Town of Collingwood on February 17, 2015. The Assessment Review Board (the “Board”) reserved its decision.

2The subject property is single family detached home (not on water), built in 1948. It is a single-storey bungalow of 1,723 square feet (“sq. ft.”) located on a parcel of land measuring 24,003.52 sq. ft. or .55 of an acre. The home was renovated in 1981. It has 3 bedrooms, one full bathroom, a detached garage of 298 sq. ft., and a full basement of 1,789 sq. ft. The dwelling is serviced by hydro; water is taken from a well and there is a septic system. When built in 1948, the home had a basement garage, which was later removed. Using comparable sales in the vicinity, Patricia Thompson, representing MPAC, argued that the current value of the subject property is $327,000. Amanda Bauhofer, representing the Appellant, argued that the subject property’s current value is $260,000.

ISSUE

3The Board must determine the current value of the subject property, and, once having established a current value, have reference to the value at which similar lands in the vicinity are assessed and adjust the assessment of the subject property to make it equitable with similar lands in the vicinity if such an adjustment would result in a reduction of the value.

DECISION

4The Board determines that the current value of the subject property is $315,000.

5The Board finds that there is no evidence before it supporting the conclusion that the value of the subject property requires an adjustment in accordance with s. 44.(3)(a) of the Assessment Act (“Act”) in order to make it equitable with the assessed values of similar properties in the vicinity.

6Accordingly, the assessment of the subject property as at January 1, 2012, for the 2013 and 2014 taxation years is reduced from $327,000 to $315,000.

REASONS FOR THE DECISION

7Section 44.(3)(a) of the Act requires the Board to first “determine the current value of the land.” The definition of “current value” is contained in s. 1 of the Act:

“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.

8Section 19.(1) states that:

Assessment based on current value. – The assessment of land shall be based on its current value.

9The best measure of current value is an arm’s length and market-tested sale of the subject property on or close to the valuation day – January 1, 2012. If no such transaction took place, a further measure of current value can be derived from the arm’s length and market-tested sales of comparable properties in the same vicinity and market. This measure acts as a benchmark and gauge of the correctness of the assessed value of the subject property.

10To enable an estimate of value for the subject property to be derived from an analysis of comparable property sales, there must be sufficient elements of similarity in terms of physical factors which can include buildings, secondary structures, lot sizes and topography. Where available, the Board prefers to use comparable sales from the same area or neighbourhood as the subject property, expanding further only when insufficient comparable sales are available in proximity to the subject property.

11Both parties presented the Board with a selection of comparable sales. Ms. Thompson for MPAC filed Exhibit 1, which included a property profile of the subject property, along with a market study detailing four comparable properties that were described as being inferior, superior or relatively comparable. Because the valuation day is January 1, 2012, it is preferable that sales taking place on or close to that day be used in order to ensure that market details are accurate for that particular point in time. In order to adjust for fluctuations of the market over time, Ms. Thompson included data on price changes over time in respect of 240 sales in the vicinity of the subject property. The time adjustment factors were not challenged by Ms. Bauhofer.

12Ms. Bauhofer filed Exhibit 2, which included a summary of her evidence and submissions. Ms. Bauhofer attached six copies of listing agreements of other properties, and information on one comparable sale in Simcoe County, labelled “Exhibit 1” in her package.

13In determining value by using comparative sales, the Board prefers to have sales occurring as close as possible to the valuation day and sales of properties located in the same vicinity as the subject property. Except in extraordinarily rare circumstances, the comparative sales evidence would need to incorporate samples from the same county or district.

14In this case, the parties proposed a total of five properties sold in the same vicinity as the subject between March, 2011 and September, 2013. Four of the comparable sales were presented by MPAC, and only one of the Appellant’s comparable sale properties was located in the same vicinity as the subject property. A brief synopsis of the five comparable sales follows. Values are listed using time-adjustments as provided by MPAC.

Sale A: 21 Silver Creek Drive – Sold September, 2011 for $294,987

This detached single-family home sits on a lot that is almost an acre in size or double the size of the subject property’s lot. The home is 41 years newer and two-storeys, but 309 sq. ft. smaller and lacking a basement. Like the subject property, it has three bedrooms and one bathroom. Unlike the subject, it has electric heat rather than forced air, and lacks a garage or other secondary structure. The property is deemed “inferior” by MPAC.

Sale B: 70 Silver Creek Drive – Sold August, 2011 for $392,260

This single family detached home occupies a lot which is more than 15,000 sq. ft. larger than the subject property’s site area. The home was built in 2002, so is much newer than the subject property. The area of the home is only two sq. ft. larger than the subject property’s total area, and there is a basement which is 64 sq. ft. smaller than the area of the subject property’s basement. There are three bedrooms, like the subject, but a total of two full bathrooms and a half bathroom, compared to the subject property’s one full bathroom. This property also has a fireplace. There is an attached garage built in 2002 which is more than double the size of the subject property’s detached garage. MPAC deems this property to be “relatively comparable”.

Sale C: 746 Mountain Road – Sold March, 2011 for $336,995

This detached single-family home occupies a lot which is 9,090 sq. ft. smaller than the subject property’s site area. The two-storey home was built in 1983. It features three bedrooms, two full bathrooms and one half bathroom, plus a fireplace. There is no basement, and the overall area of the building is 303 sq. ft. larger than the subject property. There is an attached garage, built in 1983, which is 102 sq. ft. larger than the subject property’s detached garage. MPAC deems this property “superior”.

Sale D: 18 Trail’s End – Sold July, 2012 for $476,437

This two-storey detached single family home is situated on a lot 4,292 sq. ft. smaller than the subject property’s area. It was built in 1992 and has an overall area of 2,256 sq. ft. with a basement of 1,064 sq. ft. This home features four bedrooms, two full bathrooms and one half bathroom. The attached garage is 720 sq. ft. in size, or more than 400 sq. ft. larger than the subject property’s detached garage.

Appellant’s Exhibit 1: 44 Silver Creek Drive – Sold September, 2013 for $280,000

This single family detached home is 39 years newer than the subject property. Information presented by Ms. Bauhofer in the form of a copy of the listing agreement, indicates that this property has three bedrooms and one full bathroom in a house which is described as “1100 – 1500” sq. ft. Even at 1,500 sq. ft., this dwelling is smaller than the subject property. It has a partial basement. The building is located on a site area described as measuring over one acre in size. There is one gas fireplace; the home is heated with forced air. The home is serviced by town water, unlike the subject which accesses its water from a well. Both properties have septic systems for waste disposal. This comparable property has an attached two-car garage. No time-adjustment details were provided by MPAC for 2013, and so the sales price cannot be adjusted to January 1, 2012.

15The Board rejected the remaining suggested comparable properties proposed by the Appellants on the ground that the remaining two comparable sales properties were located in Grey County and the other proposed comparable properties had not been sold but merely listed for sale.

16Other evidence presented by Ms. Bauhofer concerned the proximity of the subject property to a wetland area and a drainage ditch removing water from the adjoining properties across the back of the subject property towards a creek to the east. Ms. Thompson provided Exhibit 3, which is an aerial photograph depicting the subject property and its vicinity, with wetland areas highlighted. Ms. Bauhofer testified that the original construction of the dwelling, which contained a basement garage, had numerous problems associated with water entering the basement. Ms. Bauhofer testified that the problems with water caused mould to develop in the property and must be considered as a factor reducing the value of the subject property. She did not provide the Board with evidence to support the reduction in value that would be commensurate with the water issue. Instead she provided hearsay evidence that her property was evaluated by a real estate professional who estimated that the property was worth $260,000 in 2011 and 2012.

Analysis

17The five comparable sales serve to set out examples of less valuable and more valuable properties than the subject property. None of the properties is directly comparable, with variations in the sizes of the lots and the wide variation in sizes, types and ages of dwellings. However, using the five comparables as representing examples of inferior and superior properties, it is possible to derive a correct current value of the subject property.

18Sales B, C and D represent properties whose value would be greater than the current value of the subject property. Sale B has a much larger lot and a dwelling relatively comparable in size but with additional bathrooms, an extra storey, a fireplace, and a much larger garage. The dwelling is significantly newer than the subject property. Sale C is also significantly newer construction than the subject property, and features additional bathrooms, two storeys, a fireplace and a larger garage than the subject property. While the lot is over 9,000 sq. ft. smaller than the lot at 15 Silver Creek Drive, the dwelling is just over 300 sq. ft. larger. This property would be more valuable than the subject property. Sale D, built in 1992, is located on a lot somewhat smaller than the subject property’s area. However, the home is substantially larger, featuring an extra bedroom, a finished basement, one and a half more bathrooms than the subject property and a very large garage. The value of the subject property would be lower than the time-adjusted value of these properties, which means it would be less than $336,995, the value of Sale C.

19The sales of inferior properties – properties which are smaller, older, or feature fewer amenities than the subject property – indicate values below the current value of the subject property. These examples include Sale A and Appellant’s Exhibit 1. Both properties are located on the same street as the subject property. Sale A is a newer dwelling, but while it is located on a much larger lot, it is a smaller structure without a basement or garage, shed or other secondary structure. This property sold for $294,987 in 2011. The subject property would be more valuable. The second comparable property which would be less valuable than the subject property is the Appellant’s Exhibit 1 property at 44 Silver Creek Drive. While the listing agreement did not give as many particulars as were available for the other properties, the dwelling house in this property was smaller than the subject property with a smaller basement. The structure would appear to have the same number of bedrooms and bathrooms as the subject property spread over two storeys. Exact dimensions were unavailable. The property features an attached two-car garage, but specific measurements were not given. This property is deemed inferior to the subject property due primarily to the smaller size of its structure.

20The Board therefore finds that a value can be derived from ascertaining the median value between the values of Sale A and Sale C, which is $315,000 (rounded). Evidence by Ms. Bauhofer concerning the negative effect of the property’s location near wetlands was not quantified and the Board will not reduce the current value of the property on this ground.

Equity

21Once the Board has determined the current value of the land, it is required by s. 44.(3)(b) of the Act to:

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.

22Neither party introduced evidence relating to the assessed values of similar lands in the vicinity.

23The Board finds that, in the absence of evidence relating to the values at which similar lands in the vicinity have been assessed, the Board will not make an adjustment to the current value.

CONCLUSION

24The Board finds that the current value of the subject property is $315,000.

25The Board finds that there is no evidence before it supporting the conclusion that the value of the subject property requires an adjustment in accordance with s. 44.(3)(a) of the Act in order to make it equitable with the assessed values of similar properties in the vicinity.

26Accordingly, the assessment of the subject property as at January 1, 2012, for the 2013 and 2014 taxation years is reduced from $327,000 to $315,000.

2015 DEEMED APPEAL

27An 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.

28Section 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.

Leslie Flemming