Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: May 28, 2015

FILE NO.: WR 131636

Assessed Person(s): Reginald John Lashbrook and Carole Irene Lashbrook Edward Alan Rodd and Valerie Anne Rodd

Appellant(s): Reginald John Lashbrook and Carole Irene Lashbrook Edward Alan Rodd and Valerie Anne Rodd

Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 17

Respondent(s): Township of Georgian Bay

Property Location(s): 1791 and 1797 Severn River Shore

Municipality(ies): Township of Georgian Bay

Roll Number(s) 4465-030-013-04610-0000 and 4465-030-013-04600-0000

Appeal Number(s) 3036161 and 308795 (deemed) 3037537 and 3088022 (deemed)

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

Hearing Event No. 570722

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

Heard: November 27, 2014 in Port Severn, Ontario

APPEARANCES:

Parties	Counsel+/Representative
Carole Irene Lashbrook	Self-represented
Valarie Anne Rodd	Self-represented
MPAC	M. D’Andrea
Township of Georgian Bay	No one appeared

DECISION OF THE BOARD DELIVERED BY CRISTINA MARQUES

ISSUE

1The subject properties existed as one property until 2012, at which time a severance occurred.

2Property 1 – 1791 Severn River Shore - Roll No. 4465-030-013-04610-0000, is a seasonal, on water, one-storey detached house on a 24,808.34 square foot (“sq. ft.”) lot, with an effective frontage of 105.31 feet. MPAC classifies the lot as steep with a rocky shore. The 502 sq. ft. house was built in 1962. It has hydro and a septic tank, and MPAC classifies its quality level as 3. The property is accessible by water only, and has permanent docking.

3For this newly created property for taxation year 2014 the assessment was returned pursuant to the Assessment Act (“Act”) at $211,000. Michelle D’Andrea, appearing for MPAC, testified the assessment of the property should be reduced from the amount determined by MPAC’s multiple regression model by $52,000 to account for the poor condition and functionality of the property, and sales in the area. She recommends an adjustment to $159,000.

4Property 2 - 1797 Severn River Shore, Roll No. 4465-030-013-04600-0000 is a seasonal, on water, one-storey detached house on a 24,807.26 sq. ft. lot, with an effective frontage of 103.34 feet. MPAC classifies the lot as steep with a rocky shore. The 587 sq. ft. house was built in 1962. It has hydro and a septic tank, and MPAC classifies its quality level as 3. The property is accessible by water only, and has permanent docking.

5For this newly created property for taxation year 2014 the assessment was returned pursuant to the Act at $209,000. Ms. D’Andrea, testified the assessment of the property should be reduced from the amount determined by MPAC’s multiple regression model by $51,000 to account for the poor condition and functionality of the property, and sales in the area. She recommends an adjustment to $158,000.

6Carole Lashbrook and Valerie Rodd, the owners of the properties, take the position that the assessments are still too high based on the utility, steep slope and location of the property.

7The Assessment Review Board (“Board”) must determine if the assessments for the 2014 taxation year reflects each property’s its current value as of the legislated valuation day, January 1, 2012, and they are equitable, having reference to the assessments of similar lands in the vicinity.

DECISION

8The Board finds that the current value for Property 1, Roll No. 4465-030-013-04610-0000 is $94,000, and that the current value for Property 2, Roll No. 4465-030-013-04600-0000 is $92,000 for the 2014 and deemed 2015 taxation years and that further adjustments are not required to make the assessments equitable with the assessments of similar lands in the vicinity.

9The Board orders the assessment be reduced from $211,000 to $94,000 for Roll No. 4465-030-013-04610-0000, and from $209,000 to $92,000 for Roll No. 4465-030-013-04600-0000 for the 2014 and deemed 2015 taxation years.

REASONS FOR DECISION

Legislation

10The 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.

11Section 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.

12Section 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.

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

16Ms. D’Andrea, 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 four comparable sales
• time adjustment factors table

17Details 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/ acres
Subject Property-1 1791 Severn River Shore	211,000/ Recommendation 159,000	N/A	N/A	Front 105.31/ 0.56
Subject Property 2 1797 Severn River Shore	209,000/ Recommendation 158,000	N/A	N/A	Front 103.34/ 0.56
Sale A 38 IS 20 Severn River Shore	213,000	Nov 2011	250,000/ 267,515	Front 183/ 0.6
Sale B 5857 Severn River Shore	225,000	Dec 2012	200,000/ 198,766	Front 245/ 1.26
Sale C 5809 Severn River Shore	182,000	Sept 2012	235,000/ 233,965	Front 135/ 1.05
Sale D 4647 Severn River Shore	285,000	Apr 2013	273,000/ n/a	Front 170/ 1.02

18Ms. D’Andrea testified that MPAC attributes no value to the structures on the subject properties and that the assessment reflects land value only.

19The assessor submitted that all the suggested comparables are similar to the properties under appeal because they are all located in the same general vicinity, all have water frontage, and all have small seasonal cabins. 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 January 2009 and April 2013, and stated that properties in this general area experienced an overall increase of approximately 17.48% 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 520 sales analyzed. She testified that sale values of the four 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 properties at $159,000 and $158,000 reflect the $52,000 reduction which recognizes the various site specific issues, such as steep slope, and sales in the vicinity.

20Ms. Lashbrook and Ms. Rodd filed a report (Exhibit 2) which includes the following:

• MLS listings for nine properties in the area

21The appellants testified that their properties are noticeably inferior to the suggested comparables presented by MPAC. They argued that the subject properties are essentially the same as they existed before the 2012 severance, otherwise nothing has changed between valuation periods. They testified that for the 2008 base year the assessment for the property as whole was returned at $162,000, and it seems illogical that in 2012 half of the same property should be assessed at approximately the same value as the whole property was only four years prior.

22The assessment for the property as a whole for $162,000 is for the 2008 base year. It is logical that the two newly created lots should be assessed using the current sales in the vicinity. In the Boards view it is not uncommon, when a lot is severed, that the sum of the two newly created lots is greater than the original lot as a whole.

23The appellants argue that MPAC fails to recognize that the properties’ value are negatively impacted by a very steep slope that renders the property practically impossible to develop.

24The Board received no evidence from Ms. Lashbrook or Ms. Rodd to quantify the negative impact, if any, that the steep slope may have on the subject properties. To permit a direct comparison to be made between the subject property and a comparable there must be sufficient elements of such as total building area and lot area, age and quality of construction. The appellant’s list of suggested comparable sales is a group of MLS listings which do not provide enough information for the Board to do a detailed analysis of comparability. 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.

25The 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.

26Ms. D’Andrea submitted evidence of sale D which she suggested is comparable to the subject property. However, because the sale took place in April 2013, it is too far removed in time from the valuation day, January 1, 2012 to be of assistance to the Board. MPAC did not provide evidence of the time-adjusted value for this sale.

27The best evidence before the Board is the three sales A, B, and C presented by MPAC. The Board observes that they all have structures, and Ms. D’Andrea gave evidence on the value MPAC attributes to each structure for each of the comparables.

28Sale A sold for a time-adjusted price of $267,515, and MPAC values its structures at $104,744 resulting in a land only value of $162,771. It has 183 feet frontage, with a total lot area of 0.6 acres. The Board calculates that it sold for $889.46 per linear foot of waterfront.

29Sale B sold for a time adjusted price of $198,766, and MPAC values its structures at $70,938 resulting in a land only value of $127,828 It has 245 feet frontage, with a total lot area of 1.26 acres. The Board calculates that it sold for $521.75 per linear foot of waterfront.

30Sale C sold for a time adjusted price of $233,965, and MPAC values its structures at $62,960 resulting in a land only value of $171,005. It has 135 feet frontage, with a total lot area of 1.05 acres. The Board calculates that it sold for $1,266.70 per linear foot of waterfront.

31The Board finds that the comparable sales sold for a median of $889.46 per linear foot of waterfront. The comparable property sales are a good indication of sales values in the same vicinity, and they demonstrate that the assessment of the subject property is higher than the market indicators. The Board will determine the value of the subject properties by applying the median value per linear foot of waterfront for the comparables presented. This value per linear foot applied to Property 1 – 1791 Severn River Shore Roll No. 4465-030-013-04610-0000 results in ($889.46x105.31) a current value of $94,000 (rounded). The same value applied to Property 2– 1797 Severn River Shore 4465-030-013-04600-0000 results in ($889.46x103.34) a current value of $92,000 (rounded).

32The Board finds that the current value for Property 1 4465-030-013-04610-0000 is $94,000 and for subject Property 2 4465-030-013-04600-0000 is $92,000, as of January 1, 2012.

Equity Analysis

33Section 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.

34The Assessment to Sales Ratio (“ASR”) is a recognized tool used to determine if an equity adjustment is required. It is determined by dividing the assessments as returned by the time adjusted sale prices. An 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.

35MPAC relied on the sales of 40 properties, within 5.65 kilometres of the subject properties, to determine whether properties are assessed at or close to their current values. The median ASR for the sold properties is 1.04. 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.

CONCLUSION

36The Board reduces the assessment for 1791 Severn River Shore, Roll No. 4465-030-013-04610-0000 from $211,000 to $94,000, and for 1797 Severn River Shore, Roll No. 4465-030-013-04600-0000 from $209,000 to $92,000 for the 2014 and deemed 2015 taxation years.

2015 DEEMED APPEAL

37An 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.

38Section 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.