Van Der Marel v. Municipal Property Assessment Corporation, 2015 CanLII 24126

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: May 1, 2015

FILE NO.: WR 131237

Assessed Person(s): Catherine Van Der Marel

Appellant(s): Murray Van Der Marel

Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 19

Respondent(s): City of Hamilton

Property Location(s): 11 Church Street

Municipality(ies): City of Hamilton

Roll Number(s): 2518-003-040-22200-0000

Appeal Number(s): 2998766, 3024667 and 3089319 (deemed 2015)

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

Hearing Event No. 568844

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

ARB Case Name: WR 131237

Heard: October 21, 2014 in Hamilton, Ontario

APPEARANCES:

Parties	Counsel+/Representative
C. Van Der Marel and M. Van Der Marel	R. Baranowski
MPAC	W. Sommerville and J. Wilson
City of Hamilton	No one appeared

DECISION OF THE BOARD DELIVERED BY CRISTINA MARQUES

ISSUE

1The subject property is a single-family detached dwelling, first tier on water, located on Lake Ontario. Built in 1956 with a quality rating of 7.5, the total building area is 3,887 square feet (“sq. ft.”), and it has no basement. The lot has a frontage of 100 feet, a depth of 351.50 feet, and an effective site area of 34,848 sq. ft.

2For taxation years 2013 and 2014 the assessment was returned pursuant to the Assessment Act (“Act”) at $951,000.

3William Somerville, appearing as advocate for MPAC takes the position that the assessments as returned reflect correct current value and should be confirmed.

4Robert Baranowski, appearing as the representative and witness for the Appellant, takes the position that assessments as returned are too high. He also argues that based on his Assessment to Sales Ratio (“ASR”) analysis, the property is over-assessed, and seeks a value of $808,000.

5The Assessment Review Board (“Board”) must determine if the assessment for 2013 and 2014 taxation years reflects correct 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

6The Board finds that the current value of the property is $951,000.

7The Board also finds that an assessment at the current value as found is equitable with the assessments of similar lands in the vicinity and no reduction is required to achieve equity.

8The assessment is confirmed at $951,000 for the 2013, 2014 and 2015 taxation years.

REASONS FOR DECISION

9The Board must have regard to s. 1, 19.(1), 19.2(1), 40.(17), 40.(19), 44.(3)(a) and (b), and 45 of the Act when determining whether or not the assessment under appeal is correct.

10Section 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.

11Section 19.(1) of the Act states:

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

12Section 19.2(1) of the Act provides:

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

1. For the 2006, 2007 and 2008 taxation years, land is valued as of January 1, 2005.

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.

13Section 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.

14Section 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.

15Sections 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.

16Section 45 of the Act states:

45. Powers and functions of the Assessment Review Board. – Upon an appeal with respect to an assessment, the Assessment Review Board may review the assessment and, for the purposes of the review, has all the powers and functions of the assessment corporation in making an assessment, determination or decision under this Act, and any assessment, determination or decision made on review by the Assessment Review Board shall be deemed to be an assessment, determination or decision of the assessment corporation and has the same force and effect.

Current Value – Evidence and Analysis

MPAC’s Position

17Jason Wilson, who testified for MPAC, presented Exhibit 1 consisting of an MPAC report which included:

• location and current value study map;
• photograph of the subject property;
• property profile;
• current value study with eight comparable sales;
• time adjustment factors table;
• sales for price changes over time schedule;
• equity analysis studies.

18He submitted that the time-adjusted sale prices of the eight comparables provide have a range of likely values for the subject property between $573,408 and $1,029,060. Because the assessment as returned at $951,000 falls within this range of probable sale values, he submits that it is reflective of current value as required by s. 19.(1) of the Act.

19Details of each property on Current Value Study are summarized in Table 1:

Table 1

Address	Assessment	Sale Date	Sale/ Time Adjusted Sale ($)	Building Size (sq. ft.)	Lot Size/ (sq. ft.)	Year Built
Subject Property 11 Church Street	951,000	n/a	n/a	3,887	100 x 351.5/ 34,848	1956
Sale A 6 Falcon Road	n/a	Jan-2010	540,000/ 585,220	Vacant Land	99 x 250.5/ 19,116.7
Sale B 92 Seabreeze Crescent	n/a	Jun-2010	550,000/ 573,408	Vacant Land	88 x 223/ 19,602
Sale C 518 Glover Road	n/a	Jan-2010	900,00/ 975,367	Vacant Land	242 x 248.8/ 42,561.8
Sale D 23 Lakeview Drive	836,000	April-2010	975,000/ 1,029,060	2,457	100 x 294/ 29,185	2002
Sale E 23 Church Street	898,000	April-2011	815,000/ 828,796	3,917	50 x 335/ 21,344	1910
Sale F 25 Church Street	626,000	Jul-2012	850,000/ 816,192	2,714	50 x 328/ 18,730	1953
Sale G 49 Church Street	676,000	May-2012	728,000/ 710,567	3,902	50 x 248/ 12,196	1971
Sale H 59 Church Street	645,000	Nov-2011	616,000/ 622,078	3,253	50 x 215/ 12,196	1921

20Mr. Wilson testified that the suggested comparables are considered by MPAC to be similar to the subject property on the basis of location, size and quality. He relied on these sales to determine whether properties are assessed at or close to their current values, and indicated that the direct sale comparison approach accurately reflects the value of the property. The assessor gave details on MPAC’s analysis of sales in the neighbourhood of the subject property between January 2010 and December 2012, and stated that the area experienced an overall increase of 19.74% in real estate market. Time Adjustment Factors (“TAF”) for each month during the study period were provided together with the data for the 360 sales analyzed.

21The Board rejects as good comparables MPAC’s suggested sales A, B and C. These are vacant land sales, in the Board’s view not comparable to the subject property. It is reasonable to consider built on properties will have added value on the open market.

Appellant’s Position

22Mr. Baranowski filed Exhibit 2 consisting of the Appellant’s issues and calculations. He took the Board’s attention to 23 Church Street, a property, that both parties agree is comparable to the subject property. He indicated that this suggested comparable sold on the open market for a time-adjusted price of $211 per square foot of building area. This rate when applied to the subject property results in ($211 x 3,887 sq. ft.) a value of $820,000 (rounded). It is his contention that this is the best evidence of current value, and he urged the Board to reduce the current value of the subject property accordingly.

Board’s Analysis of Current Value

23The best indicator 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. 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.

24The Board finds the following five properties, presented as evidence by both parties, acceptable comparables, as summarized in Table 2:

Table 2

Address	Time Adjusted Sale ($)	TAS per linear foot of waterfront ($)
23 Lakeview Drive	1,029,060	10,290.60
23 Church Street	828,796	16,575.92
25 Church Street	816,192	16,323.84
49 Church Street	710,567	14,211.34
59 Church Street	622,078	12,441.56

25When the Board analyses the five acceptable sales, it observes that they are all similar to the subject property in the sense they are all waterfront properties in the same general vicinity of lake Ontario, and that they are all built on properties.

26The time-adjusted sale prices for the five properties range between $622,078 and $1,029,060. The assessment of the subject property as returned at $951,000 is within this range.

27Another logical way to determine the correct current value with the evidence before the Board is to determine a value per linear foot of waterfront, based upon the time adjusted sale prices. In this case the range is between $10,290.60 and $16,575.92 per linear foot of waterfront. The subject property’s current value assessment at $9,510 per linear foot of waterfront is considerably below this range.

28Mr. Baranowski has not adequately demonstrated that the current value for his property as determined by MPAC is incorrect. As for his suggestion that the subject property should be found to have a current value of $820,000; the Board is satisfied that the evidence does not lead it to that conclusion. Mr. Baranowski asks the Board to determine the current value based upon the sale of a property that has a considerably smaller, narrower lot than the subject property. His sale price per square foot of building calculation does not take this into consideration. The current value the subject property determined by MPAC does not appear to be unreasonable and appears to take into consideration the lot size. The Board is satisfied that $951,000 is reflective of current value as required by s. 19.(1) of the Act.

29The Board finds that the correct current value of the subject property is $951,000.

Equity Analysis

30Section 44.(3)(b) mandates and directs that after determining current value, the Board shall have reference to the value at which similar lands in the vicinity are assessed. Assessment to Sales Ratios (ASR) are a tool that is often used to determined if an assessment is equitable with the assessments of similar lands in the vicinity. The ASR for a sale is determined by dividing the assessment as returned with the time adjusted sale price. An ASR falling below 1.0 is an indication that MPAC’s valuation methodology may be resulting in assessments below values determined in the market place. Conversely, an ASR falling above 1.0 is an indication that MPAC’s valuation methodology may be resulting in assessments above values determined in the market place.

31MPAC relies on the sales of 30 properties, within 0.4 kilometres of the subject property, to determine whether properties are assessed at or close to their current values, as listed in the Equity analysis of Exhibit 1. The median ASR for the sold properties is 0.98, which is within MPAC’s acceptable range of ASRs between 0.95-1.05. This result satisfies the Board that generally speaking, MPAC’s valuation methodology is achieving values similar to those determined in the marketplace and no further equitable adjustment is warranted.

32Mr. Baranowski argues that the subject property’s assessment should be calculated based upon the average assessed value per square foot of building of the following three properties which results in an assessment of $808,000.

1. 23 Church Street is assessed at $ 229.00 per sq. ft.
2. 49 Church Street is assessed at $173.00 per sq. ft.
3. 43 Church Street is assessed at $223.00 per sq. ft.

Average assessment of $208.00 per sq. ft.

33His argument is that all three properties are located on the same street as the subject property, and that their average assessment of $208 per square foot is a good indication that the subject property needs an equity adjustment pursuant to s. 44.(3)(b) of the Act. His argument does not take into account the lot size of the property.

34The five valid sales on Church Street and Lakeview have a median ASR of 0.95 an indication that MPAC is achieving values similar to those determined in the marketplace, and not very different from the results as found in MPAC’s equity analysis.

CONCLUSION

35The assessment confirmed at $951,000 for the 2013 and 2014 taxation years.

2015 DEEMED APPEAL

36An 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.

37Section 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.