Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: April 10, 2015

FILE NO.: WR 126004

Assessed Person(s): Susan Edward and Tom Edward

Appellant(s): Susan Edward

Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 7

Respondent(s): Township of Minden Hills

Property Location(s): Woodpecker Trail

Municipality(ies): Township of Minden Hills

Roll Number(s): 4616-051-000-59020-0000

Appeal Number(s): 2996976, 3018921 and 3073607 (deemed 2015)

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

Hearing Event No. 560978

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

ARB Case Name: WR 126004

Heard: June 6, 2014 in Minden, Ontario

APPEARANCES:

Parties	Counsel/Representative
Tom Edward	Self-represented
MPAC	C. Hamilton
Township of Minden Hills	No one appeared

DECISION OF THE BOARD DELIVERED BY CRISTINA MARQUES

ISSUE

1The subject property is a vacant lot on water, located on Woodpecker Trail on Clear Lake, in Minden Hills. MPAC’s records indicate that the lot has an effective frontage of 340 feet with an effective depth of 1,450 feet. Hydro is available, and there is potential to connect to other utilities.

2For taxation year 2013 the assessment was returned pursuant to the Assessment Act (“Act”) at $134,000. Chandelle Hamilton, appearing for MPAC, testified the assessment of the property was reduced from the amount determined by MPAC’s multiple regression model by $201,000 to account for the poor condition of the property.

3Tom Edward, the owner of the property, takes the position that the assessment is still too high based on the utility, steep slope and location of the property.

4The Assessment Review Board (Board) must determine if the assessment for the 2013 and 2014 taxation years reflects its current value as of the legislated valuation day, January 1, 2012, and if it is equitable, having reference to the assessments of similar lands in the vicinity.

DECISION

5The Board finds that the current value as returned at $134,000 is correct and that it does not require an adjustment to make it equitable with the assessments of similar lands in the vicinity.

REASONS FOR DECISION

Legislation

6The Board must have regard to s. 1, 19.(1), 19.2(1), 40.(17), 40.(19), 44.(3)(a) and (b) of the Act when determining whether or not the assessment under appeal is correct.

7Section 1 of the Act defines current value as follows:

“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) of the Act states:

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

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.

9Section 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.

10Section 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.

11Section 44.(3)(a) and (b) of the Act state:

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.

Current Value – Evidence and Analysis

12Ms. Hamilton, in support of the assessment as returned, presented Exhibit 1 consisting of an MPAC report which included:

• location and current value study map
• current value study with two comparable sales
• time adjustment factors table

13Details of each property in the Current Value Study, together with the uncontested information respecting the subject property are summarized in Table 1:

Table 1

Address	Assessment ($)	Sale Date	Sale/ Adjusted Sale ($)	Lot Size
Subject Property
Woodpecker Trail 461605100059020	134,000	N/A	N/A	340 x 1,450
Sale A
Woodpecker Trail 461605100041900	107,000	May 2013	108,000/ n/a	107 x 350
Sale B
1156 Greg Knight Trail	146,000	April 2012	220,000/ 224,236	475 x 5,954

14Ms. Hamilton testified that all the suggested comparables are vacant lots on water, and that the suggested comparables are considered by MPAC to be similar to the subject property on the basis of location and lot utility. She relied on these sales to determine whether properties are assessed at or close to their current values, and indicated that in her view the direct sale comparison approach indicates that the assessment of the property reflects the current value of the property. She gave details on MPAC’s analysis of sales in the same area as the subject property between December 2008 and December 2012, and stated that the lands in this general area experienced an overall decrease of approximately 11.84% in the real estate market over that period. Time adjustment factors for each month during the study period were provided together with the data for the 480 sales analyzed. She testified that sale values of the two comparables are reflective of current value as required by s. 19.(1) of the Act, and that they show that MPAC’s valuation of the subject property at $134,000 reflects the $201,000 reduction which recognizes the various site specific issues, such as steep slope.

15Mr. Edward filed a report (Exhibit 2) which includes the following:

• Photographs of MPAC’s comparable property A
• Photographs of the subject property

16Mr. Edward testified that his property is noticeably inferior to the suggested comparables presented by MPAC. He argued that MPAC fails to recognize that the property is negatively impacted by a very steep slope that renders the property practically impossible to develop, which negatively affects its marketability

17The Board received no evidence from Mr. Edward to quantify the negative impact, if any, that the steep slope may have on the subject property, and Mr. Edward presented no sales evidence for the Board’s analysis. The Board can only make corrections to current value based on evidence showing the correction that is required. The Board cannot arbitrarily assign a negative or positive value to a variable as current value must be based on evidence.

18The best indicator of current value is an arm’s length and market-tested sale of a property on the valuation date, January 1, 2012, or close to it. Since the subject property did not sell, the Board relies upon the sale of similar properties in the vicinity on or close to the valuation day.

19The subject property has 340 feet of frontage, with a total lot area of 12.66 acres, and is assessed at $394.11 per linear foot of waterfront.

20The only evidence before the Board is the two sales presented by MPAC. The Board observes that they are both vacant lots, as is the subject property.

Sale B is considerably larger than the subject property at 475 feet frontage, with a total lot area of 65 acres. It sold for $472 per linear foot of waterfront.

Indicating that large properties in the vicinity are commanding values higher that the assessment of the subject property.

Sale A is located on the same road as the subject, is considerably smaller than the subject property at 107 feet frontage, with a total lot area of 0.91 acres.

It sold for $1,009 per linear foot of waterfront. Although the comparable property sold some seventeen months after the valuation day of January 1, 2012, it is a good indication of sales values on the same road as the subject, and it demonstrates that the assessment of the subject property has been reduced to allow for the poor site condition.

21The Board finds that the correct current value of the subject property is $134,000.

Equity Analysis

22Section 44.(3)(b) requires that after determining current value the Board shall have reference to the value at which similar lands in the vicinity are assessed and reduce an assessment below a property’s current value if required to make it equitable with the assessments of similar lands in the vicinity.

23The Assessment to Sales Ratio (“ASR”) is a recognized tool used to determine if an equity adjustment is required. It is determined for this appeal by dividing the assessments as returned by the time adjusted sale prices.

24An ASR falling below 1.0 is an indication that MPAC’s valuation methodology may be resulting in assessments below current values. Conversely, an ASR falling above 1.0 is an indication that MPAC’s valuation methodology may be resulting in assessments above current values.

25MPAC relied on the sales of 30 properties to determine whether properties are assessed at or close to their current values. The median ASR for the sold properties is 1.01. The assessor testified that the median ASR of 1.01 it indicates that MPAC’s valuation methodology is reasonably correctly determining current values.

26The Board finds that there is no evidence before it to support that a reduction of the assessment below current value is required.

CONCLUSION

27The Board confirms that assessment at the property’s current value of $134,000 for the 2013 and 2014 taxation years.

2015 DEEMED APPEAL

28An 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.

29Section 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.