Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: May 14, 2015 FILE NO.: WR 131936

Assessed Person(s): 1828392 Ontario Inc. Trustee and Falsetto Salvatore Appellant(s): S/A/L Falsetto and Falsetto Salvatore Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 03 Respondent(s): City of Ottawa

Property Location(s): 315 Nelson Street Municipality(ies): City of Ottawa Roll Number(s): 0614-031-401-18601-0000 Appeal Number(s): 2899566, 2675920, 2330035, 2043497, 2020735, 2020734, 2020732, 2020733, 2020731, and 2020730 Taxation Year(s): 2008, 2009, 2010, 2011, and 2012 Hearing Event No.: 578534

Legislative Authority: Sections 34 and 40 of the Assessment Act, R.S.O. 1990, c. A.31, as amended

ARB Case Name: WR 131936 Heard: April 8, 2015 in Ottawa, Ontario

APPEARANCES:

Parties S/A/L Falsetto and Falsetto Salvatore MPAC City of Ottawa

Counsel Robert Crozier Karey Lunau No one appeared

DECISION OF THE BOARD DELIVERED BY S. McANSH

INTRODUCTION

1The University of Ottawa was founded as a pontifical university by Pope Leo XIII in 1899 and was administered by the Oblates of Mary Immaculate [the “Oblates”], a male religious order of the Roman Catholic Church. In 1965 the University of Ottawa was reconstituted as a public university and the Oblates were given until 1970 to move their administrative offices from the University of Ottawa campus to the newly built St. Paul’s University campus.

2As part of the transition process the University of Ottawa transferred the ownership of a parcel of land that is now 305 and 315 Nelson Street to St. Paul’s University. The Oblates had an apartment building constructed on the parcel in 1965. That apartment building contains 72 two bedroom apartments and a chapel area. Each apartment contains a kitchen and laundry facilities. During the construction of the apartment building an underground tunnel was built connecting it to the existing three story building on the parcel, which is the subject property for these appeals.

3In 1968 the subject property was converted for use by the Little Sisters of the Holy Family [the “Little Sisters”], a female religious order of the Roman Catholic Church. The Little Sisters provided domestic services to the Oblates. To that end the subject property was developed to contain a large industrial kitchen and commercial grade laundry facility.

4The Oblates and Little Sisters ceased to use the properties on Nelson Street sometime in early twenty-first century. In 2006 the subject property was sold and subdivided from the apartment building at 305 Nelson. The subject property has been redeveloped into a 23 unit apartment building. The newly created parcel was classified as commercial property upon subdivision. Through a request for reconsideration made in 2006 the subject property’s classification was changed to residential and is currently multi-residential.

ISSUES

5The only issue in this appeal is if the kitchen and laundry facilities of the subject property should have been in the residential property class prior to the redevelopment of the subject property.

6The Appellants bring this appeal in order to have portions of the subject property classified in the new multi-residential property class, which requires that the use prior to conversion be “a non-residential use”. The Appellants argue that the large kitchen and laundry facilities were not residential uses and that those portions of the subject property should, therefore, be in the new multi-residential property class. MPAC takes the position that the entire property was used for residential purposes.

7The parties agree on the current value of the subject property.

DECISION

8For the reasons set out below I find that the subject property was used for residential purposes prior to its conversion to apartments. Thus, the subject property is properly in the multi-residential property class.

LEGISLATION

9The new multi-residential property class is set out in s. 10 of the General Regulation, O Reg 282/98, passed pursuant to the Assessment Act.(“Act”). Section 10(2) states that land is in the new multi-residential property class if it would have been in the multi-residential property class and:

The units on the land have been built or converted from a non-residential use pursuant to a building permit issued after the by-law adopting the new multi-residential property class was passed.

10Ottawa adopted the new multi-residential property class in the 2000 taxation year and it is not disputed that a building permit was issued to convert the subject property from its previous use by the Little Sisters to 23 apartments. The only issue is if the use of the subject property by the Little Sisters was a non-residential use.

CLASSIFICATION

11The subject property is three stories tall, with the bottom story partially below grade. The lowest level was half a large scale industrial kitchen where the Little Sisters would prepare meals for the Oblates living in the apartment building on the parcel and their guests. The other half of the lowest level was a dining room that could seat 70 people. This was where the majority of the Oblates that lived at 305 Nelson would take their meals. There was also a lounge area for the Oblates on the lowest level of the subject property.

12The second floor of the subject property was primarily a commercial grade laundry facility, which occupied approximately 60% of the floor area. The Little Sisters used this area to do laundry and clothing repair for the Oblates. The second floor also contained a dining room and lounge area for use by the Little Sisters, as they would not use the same area as the Oblates. The second floor also contained four bedrooms used by the Little Sisters.

13The third floor contained a chapel, common washrooms and bedrooms for the Little Sisters. The Appellants do not argue that this floor was used for non-residential purposes.

14The Appellants’ primary argument is that the use of the facilities by the Little Sisters was not exclusive, as the Oblates living next door could use the facility at will. The Appellants argue that exclusive use is a requirement of any classification of residential use of land.

15In Municipal Property Assessment Corp. v. R.M.L Parking Ltd. (2006), 2006 CanLII 84667 (ON SCDC), 215 O.A.C. 118 [“R.M.L. Parking”] the Divisional Court held that a parking lot adjacent to residential condominiums was residential property and the exclusive use by residents in those condominiums was a factor considered in that conclusion. In 1549027 Ontario Ltd. v. Municipal Property Assessment Corp., Region No. 17 [2012] 73 O.M.B.R. 477 [“1549027”] a different panel of this Board held that a parking garage for “water-access only” cottage owners was residential property and exclusive use by those cottage owners was a factor considered in that conclusion. Ren v. Municipal Property Assessment Corp. Region No. 19 [2011], 70 O.M.B.R. 415 [“Ren”] was a home office decision of a different panel of this Board where the fact that “the office used solely by residents of the house” was a factor the Board considered in classifying the home office in the residential property class. Finally, Seawright v. Municipal Property Assessment Corp. Region No. 15 [2007], 57 O.M.B.R. 248 [“Seawright”] is another home office decision of a different panel of this Board where the home office was classified in the residential property class based in part on the exclusive use of the office by residents of the house.

16While it is true that exclusivity was a factor considered in each of those decisions, MPAC argues that it is not the only factor. In Seawright this Board listed a number of factors to consider in making the determination that a use is residential. The Member held, at para. 33, that the “issue is one of the scale and nature of the activity undertaken in a residential property.” The factors considered by the Board included that the space was used solely for residents of the house, that no revenue was produced on site, that employees and deliveries were discouraged, and that there was no separate entrance or visitor parking. Those factors were upheld on review, see DM 72714. While Seawright is the most comprehensive decision in listing factors to consider, all of the cases relied on by the Appellants involve the consideration of a number of factors. In R.M.L Parking, the Divisional Court held at, para. 25, that “in order to come under the residential classification… the purpose to which the land is devoted is residential.” That is, the determinative issue is the type of use, not the exclusivity of that use.

17MPAC argues that what the decisions apply is a “sole use test” which asks if the property in question is used solely for residential purposes. The type of property is not a determining factor. In R.M.L. Parking and 1549027 a parking and storage facility was residential as it was only used by nearby homeowners. In Ren and Seawright home offices were not found to be commercial as their sole use was residential. MPAC also put forward Windisman v. Toronto College Park Ltd. (1996), 1996 CanLII 8108 (ON CTGD), 28 O.R. (3d) 29, a decision pursuant to the Condominium Act, R.S.O. 1980, c. 84, where the Superior Court held “parking and storage units may… be regarded as incidental or ancillary aspects or elements of a residence and, accordingly… may be said to fall within the ordinary meaning of the phrase "used for residential purposes’.” That is, the use of residential property can be on a different site from a residence.

18The Appellants’ argument on exclusivity fails for two reasons. First, shared use of a space does not, on its own, indicate that it is outside of the residential property class. Secondly, at the time at issue, 305 and 315 Nelson were the same parcel of land. The evidence was clear that the use of the facilities at the subject property were limited to the Oblates living at 305 and their guests. That constitutes exclusion for the purposes of residential use. As MPAC noted, the kitchen and laundry facilities were to serve the “Roman Catholic family” on the parcel.

19The Appellants also argued that the scale of the facilities indicated a non-residential use. That is, they argued that a commercial grade kitchen and laundry facility cannot be residential do to their size and scale. MPAC pointed out that in Seawright the Board placed no weight on the size of the home office, which had four desks and associated computer equipment. MPAC also put forward Camp Manitou Inc. v. Municipal Property Assessment Corp., Region No. 28 [2004], 47 O.M.B.R. 472 [“Camp Manitou”], a decision of a different panel of this Board, which held that a recreational summer camp was in the residential property class, as an indication that the scale of a facility does not, on its own, remove a property from the residential property class.

20I agree with MPAC that the scale is not determinative, I must look to the use of the subject property at the relevant time. In making that assessment I find the factors set out in Seawright to be of assistance. Those factors are if space was used solely for residents of the house, that no revenue was produced on site, that employees and deliveries were discouraged, and that there was no separate entrance or visitor parking.

21The evidence before me is clear that the use was limited to residents of the two buildings on the parcel, the Oblates at 305 and the Little Sisters at 315. The two buildings should be considered together. They were connected with an underground tunnel and were built to operate as a unit on a single parcel of land. The nature of the Little Sisters mission and the ethos of the Roman Catholic Church made this a natural residential arrangement. The Little Sisters mission was to provide domestic services to the Oblates. The dining area at 315 Nelson was developed, not for the public at large, but for the Oblates at 305 Nelson. The scale of the kitchen and laundry facilities was substantial, but I agree with the finding in Seawright, that the use, not the number of ovens, is determinative.

22There is no evidence that revenue was produced at the subject property. The domestic services provided were part of the Little Sisters’ religious mission and were provided in that context. I heard no evidence on deliveries and can make no finding on that basis. Finally, there is no indication of any visitor parking, signage, employee visits or any other indication that the use of the subject property was anything other than residential service to the Roman Catholic family residing at 305 and 315 Nelson Street.

CONCLUSION

23For the reasons set out above, I find that the historic use of the subject property was residential. Thus there was no conversion from a “non-residential use” and the Appellants do not meet the statutory requirement of the new multi-residential property class. The classification of the subject property in the multi-residential property class is confirmed.

24By agreement of the parties the current values are modified as follows:

a) Appeal No. 2020730 is reduced from $521,600 to $486,300;

b) Appeal No. 2020731 is reduced from $237,470 to $221,300;

c) Appeal No. 2020732 is increased from $754,920 to $639,100;

d) Appeal No. 2020733 is reduced from $170,930 to $222.400;

e) Appeal No. 202734 is reduced from $91,790 to $85,400;

f) Appeal No. 2020735 is reduced from $136,290 to $126,500;

g) Appeal No. 2043497 is confirmed at $1,987,000;

h) Appeal No. 2330035 is confirmed at $1,987,000;

i) Appeal No. 2675920 is confirmed at $1,987,000; and

j) Appeal No. 2899566 is confirmed at $1,987,000.