Eric Breuer v. Municipal Property Assessment Corporation, 2015 CanLII 26381

Assessment Review Board Commission de révision de l’évaluation foncière

ISSUE DATE: May 11, 2015

FILE NO.: WR 131038

Assessed Person(s): Eric Breuer

Appellant(s): Eric Breuer

Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 09

Respondent(s): City of Toronto

Property Location(s): 118 Dewbourne Avenue

Municipality(ies): City of Toronto

Roll Number(s): 1914-013-210-04400-0000

Appeal Number(s): 3041491 and 3077501 (deemed 2015)

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

Hearing Event No. 573046

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

ARB Case Name: WR 131038

Heard: February 23, 2015 in Toronto, Ontario

APPEARANCES:

Parties	Counsel+/Representative
Eric Breuer	Self-represented
MPAC	A. Martins
City of Toronto	No one appeared

DECISION OF THE BOARD DELIVERED BY SUBUOLA AWOLERI AND CRISTINA MARQUES

ISSUE

1The subject property is a single-family detached dwelling built in 1943 with a 1993 renovation for an effective year built of 1985. It has a lot with 35 feet of frontage, 120 feet of depth, and a total building area of 3,032 square feet (“sq. ft.”). The basement area is 1,516 sq. ft. of which 418 sq. ft. is finished. It also has a basement garage. The property benefits from a 2% negative adjustment in the MPAC multiple regression model for being a corner lot.

2For taxation year 2014 the assessment was returned at $1,251,000. Andrew Martins appearing for MPAC made a recommendation to reduce the assessment to $1,118,000, based on sales in the area, emphasising that the recommended value is reasonable and reflective of current value in accordance with s. 19.(1) of the Assessment Act (“Act”).

3Eric Breuer, the owner of the subject property, rejected the recommendation.

4Mr. Breuer took the position that the assessment is too high, and urged the Assessment Review Board (“Board”) to consider a value of $1,033,000, which is the original assessment of the property provided to the Appellant by MPAC for 2013 taxation year.

5The Board must determine if the assessment for the 2014 taxation year 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 the current value of the property for the 2014 taxation year to be $1,118,000.

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

8The Board orders that the assessment be reduced from $1,251,000 to $1,118,000 for the 2014 taxation year.

REASONS FOR DECISION

Legislation

9The 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.

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)¹, the day as of which land is valued for a taxation year is determined as follows:

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.

15Section 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

16Mr. Martins, in support of the assessment as returned, presented Exhibit 1 consisting of:

• current value study with five comparable sales
• location and market analysis map
• time adjustment factors table

17Details of each property on Current Value Study are summarized in Table 1:

Table 1

Address	Assessment ($)	Sale Date	Time / Adjusted Sale ($)	Building/Size (sq. ft.”)
Subject Property 118 Dewbourne Avenue	1,251,000 Recommended 1,118,000	N/A	N/A	3,032
Sale A 177 Dewbourne Avenue	N/A	August 2011	1,649,007	3,134
Sale B 160 Glen Cedar Road	1,064,000	February 2013	1,200,000 (sale amount)	1,736
Sale C 104 Ava Road	1,227,000	July 2012	1,190,787	3,075
Sale D 20 Ava Road	1,301,000	August 2012	1,288,526	2,342
Sale E 91 Ava Road	1,085,000	May 2010	1,090,778	2,130

18Mr. Martins in his evidence stated that Sale C located at 104 Ava Road is considered to be the most comparable property to the subject property, being that it is similar in size and amenities to the subject property.

19Mr. Martins gave details on MPAC’s analysis of sales in the neighbourhood of the subject property from May 2010 to December 2012. Time adjustment factors for each month during the study period were provided together with the data for the 320 sales analyzed. He argued that the best comparable is Sale C because it is similar to the subject property building, lot size, and amenities. He concluded that the time adjusted sale amount of $1,190,787 for sale C which is the most comparable sale to the subject property, estimates the market value of the subject property to be $1,120,000 and on this basis, the recommended current value assessment of the subject property of $1,118,000 is therefore reasonable.

20The Board rejects MPAC’s Sales B and E because they are considerably smaller than the subject property at 1,736 sq. ft. and 2,130 sq. ft. respectively.

21Mr. Breuer testified that he does not dispute that MPAC’s suggested comparables are similar to his property. Conversely he argues that MPAC does not adequately recognize the nuisances that impact the subject property such as the increase of traffic due to run off of the congestion of Eglinton Avenue, especially during rush hour periods. The Appellant is of the opinion that the traffic congestion will increase when the new nine-storey building, now under construction, at the end of his street is completed. He further argues that this traffic congestion will be worse when the renovation and expansion of the synagogue located in closed proximity to the subject property is completed.

22Mr. Breuer visited the five comparable properties provided by MPAC, and testified that all the backyards have leveled grading which allows for the construction of decks and proper landscaping, in contrast with the subject property which has a sloped back yard. It is his contention that for these reasons the property is considerably less valuable than MPAC’s suggested comparables.

23Mr. Breuer testified that in 2012, he received an assessment notice for 2013 – 2016 taxation years with a 22.2% increase in value in line with the neighbourhood annual increase of 5.6%, which he accepted. In 2013, he received a notice from MPAC raising the assessment by 48% for 2014 – 2016 taxation years which was later reduced after he filed a Request for Reconsideration (RFR) to 32%. MPAC advised Mr. Breuer that the reason for the increase was due to the fact that MPAC had neglected to increase the assessment on the original part of the house which Mr. Breuer renovated in 1993, and because the assessment, as returned, was too low.

24Mr. Breuer challenged MPAC’s arguments, and pressed the Board to roll back the increase to the original assessment in the assessment notice for the 2012 base year at $1,033,000 for 2013 taxation year. Mr. Breuer further submitted that the changes made to the original part of the house in 1993, did not result in a material increase in value, since it had been upgraded prior to 1993 and any changes in value would have diminished over 21 years.

25During cross-examination Mr. Martins testified that the subject property is not in close enough proximity to the religious institution to benefit from the multiple regression model reduction in current value.

26Mr. Breuer failed to adequately demonstrate that the current value determined by MPAC is incorrect. He did not submit for the Board’s consideration evidence of any comparable properties that either sold at a lower price than the subject property assessment value, or had been valued at a lower amount than the subject property’s assessed value. The Board did not receive any evidence to quantify the negative impact, if any, that the back yard, the traffic or the synagogue may have on the subject property. 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 adjustment to value without quantitative evidence.

27In Mr. Breuer’s submissions he referred the Board to a prior decision of the Board. In Breuer v. Ontario Property Assessment Corp., Region No. 12, [2000] O.A.R.B.D. No. 1193 and City of Toronto, Mr. Breuer, appealed the assessment of the subject property for the tax years 1998 and 1999, arguing that the assessment was too high and that the subject property further suffered the negative impact of traffic and other nuisances. Member Campbell stated:

“The Board must then quantify the negative impact. The assessor testified that if the subject were located on a major street like Bathurst Street it would receive an $18,000 reduction. The subject property is not so located, but the Board finds that given the number of negatives which affect it, the assessment should be reduced in a manner similar to a reduction given for a location on a major street. Further, a reduction is given to acknowledge the number of nuisances impacting on the subject. Therefore, for the years 1998 and 1999 the assessment will be reduced by 10%...”

28Mr. Breuer in this appeal has not provided the Board with any evidence to quantify the negative impact. This Board can only make decisions based on evidence and is not bound by a previous decision.

29The 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.

30The best market evidence before the Board is provided by MPAC’s three accepted valid sales being Sales A, C, and D. The Board agrees with Mr. Martins that the best comparable is sale C, 104 Ava Road, which had a time adjustment sale amount of $1,190,787. Furthermore, Mr. Martins’ conclusion that the subject property should be further adjusted to $1,118,000 based on lot size of the subject property compared to 104 Ava Road is quite reasonable. Based on the sales evidence submitted by MPAC specifically 104 Ava Road, the Board will set the current value of the subject property at $1,118,000.

Equity Analysis

31Section 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. The Assessment to Sale Ratio (“ASR”) is a tool often used to determine if a reduction in the assessment below current value is required to make an assessment equitable with the assessments of similar lands in the vicinity. The ASR is determined by dividing the assessment as returned by the time-adjusted sale price.

32An 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.

33Mr. Martins provided as part of Exhibit 1 an Equity Analysis of sales of 30 residential properties within 0.32 kilometres of the subject property between May 2010 and December 2012 that are typical, arm’s length transactions between willing sellers and willing buyers. This was used to determine whether properties are assessed at or close to their current values. The median ASR for the sold properties is 1.03, which satisfies the Board that MPAC’s valuation methodology is producing values which are reasonably correct and equity is being achieved.

34While the burden of proof respecting current value rests with MPAC, and its evidence in that respect has been found to be determinative, the burden of proof respecting s. 44.(3)(b)’s equity requirement rests with the Appellant. Mr. Breuer has not provided the Board with any evidence in this regard. The only equity evidence before the Board is from MPAC. The ASR evidence does not lead the Board to the conclusion that the assessment of the property should be reduced below its current value to make it equitable with the assessments of similar lands in the vicinity.

CONCLUSION

35The Board finds that the assessment should be reduced from $1,251,000 to $1,118,000, for the 2014 taxation year.

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.

Footnotes

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