Paul Michael Barrett and Margaret Anne Barrett v. Municipal Property Assessment Corporation, 2015 CanLII 30375

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE:

May 28, 2015

FILE NO.:

WR129936

Assessed Person(s):

Paul Michael Barrett and Margaret Anne Barrett

Appellant(s):

Paul Michael Barrett and Margaret Anne Barrett

Respondent(s):

Municipal Property Assessment Corporation (“MPAC”) Region 15

Respondent(s):

City of Mississauga

Property Location(s):

2546 Mindemoya Road

Municipality(ies):

City of Mississauga

Roll Number(s):

2105-060-132-03200-0000

Appeal Number(s):

2997237 and 3085290 (deemed 2015)

Taxation Year(s):

2014 (and deemed 2015)

Hearing Event No.

570074

Legislative Authority:

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

Heard:

December 11, 2014 in Mississauga, Ontario

APPEARANCES:

Parties

Counsel+/Representative

Paul Michael Barrett and Margaret Anne Barrett

Forbes West

MPAC

Roger Leroux

City of Mississauga

No one appeared

DECISION OF THE BOARD DELIVERED BY CRISTINA MARQUES

ISSUE

1The subject property is a one-storey detached house, and has a lot that borders on the Credit River with an effective size of 37,897 square feet (“sq. ft.”). The house was built in 1982 and MPAC classifies its quality level at 7.5. It has total building area of 2,949 sq. ft. with a basement with 3,062 sq. ft. of which 2,308 sq. ft. are finished. In addition it has an attached garage with 480 sq. ft., a detached garage, and an outdoor pool.

2Mr. Leroux, appearing as advocate for MPAC, called one witness Terrance Johnston.

3Mr. Johnston testified that the subject property has been assessed based on the evidence of sales of similar properties in the vicinity of the subject property, and provided the sales of seven suggest comparable properties.

4Mr. West, appearing as advocate for the appellants, challenged the comparability of MPAC’s suggested comparable properties, and provided the sale of one suggested comparable property, and the assessments of 13 suggested comparables.

5For the year 2014 the assessment was returned at $1,740,000 pursuant to the Assessment Act (“Act”).

6The Board must determine if the assessment for 2014 taxation year reflects correct the 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

7The Board finds that the current value is $1,740,000 for the 2014 and deemed 2015 taxation years.

8The Board also finds that an assessment at the current value as found is equitable, and no reduction is required to achieve equity in accordance with s. 44.(3)(b).

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), 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.

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 – Analysis

16The best evidence 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. If no such transaction has taken place, the Board looks to sales of comparable properties in the vicinity to determine if the sales evidence suggests that current value requires correction.

17Mr. Johnston proposed that the seven suggested comparable sales provided to the Board in Exhibit 1 are the most similar properties to the subject property. He submitted that the time adjusted sale prices of the seven properties provide an indication of likely values for the subject property. Details of each property on Current Value Study are summarized in Table 1:

Table 1

Subject Property

2546 Mindemoya Road

Sale

A

1190 Stavebank Road

Sale

B

415 Temagami Crescent

Sale

C

2005 Heartwood Court

Sale

D

2436 Jarvis Street

Sale

E

2421 Jarvis Street

Sale

F

2425 Jarvis Street

Sale

G

2435 Jarvis Street

Year Built

1982

1939

1959

1993

1977

1976

1974

1977

Assessment($)

1,740,000

n/a

n/a

n/a

1,287,000

n/a

2,034,000

1,662,000

Sale Date

Aug. -2011

Jan.-2010

Sept. - 2012

May 2011

May-2012

July-2012

Jan.-2010

Sale/Time adjusted Sale($)

1,585,000/ 1,624,424

1,750,000/ 2,042,285

1,880,000/ 1,834,330

1,387,000/ 1,449,312

1,313,888/ 1,291,460

1,650,000/ 1,614,187

1,175,000/ 1,371,249

Building Size (sq. ft.)

2,949

1,958

2,013

4,081

3,650

4,578

3,239

4,106

Quality of Construction

7.5

7

7

8

7.5

7.5

7.5

7

Lot Size Sq. ft.

37,897

15,681

19,602

11,741

13,939

61,855

50,965

30,927

18The assessor testified that the suggested comparables are on water or close to it, as is the subject property. The time adjusted sale prices for the seven comparables provide a range of likely values for the subject property between $1,291,460 and $2,042,285. Mr. Johnston testified that the assessment for the subject property at $1,740,000 is in this range, as such he urged the Board to confirm the assessment as returned for 2014 taxation year.

19Mr. West provided the Board with Exhibit 2, which included photographs of the subject property, of the four suggested comparables, and of the streetscapes in the vicinity. He argued that MPAC fails to recognize that the subject property’s marketability is negatively impacted by a flooding on a yearly basis reducing the enjoyment of the property. He argued that the usable tableland is reduced by an unopened road allowance and an easement which bi-sects the property. He also argued that the streetscape of Mindemoya Road lacks the look of an upscale suburban street, because of the mix quality and size of houses, as well as a public building at the end of the street. He argues that the suggested comparables are all located on higher quality streets, and for those reasons the subject property is overvalued. Mr. West also submits that the properties on Jarvis Street sold for values that are substantially lower than the subject property’s returned assessment, and that is another indication that the subject property is overvalued.

20Three of Mr. West’s suggested sales are the same properties as MPAC’s suggested comparable sales E, F, and G. The fourth suggested comparable that Mr. West presented is 2445 Jarvis Street. The sale took place in June 2014; it is too far removed in time from the valuation day, January 1, 2012 to be of assistance to the Board. The other properties are properly considered in the analysis below.

21The Board accepts that the subject property is impacted by flood plain, but accepts MPAC’s evidence that MPAC has adjusted the current value for that nuisance by adjusting the lot size from a measurement of 98,880 sq. ft. to 32,897 sq. ft., and there is no evidence before the Board to demonstrate that a greater allowance is required.

22The Board did not receive any evidence to quantify the negative impact, if any, that the road allowance and the look of the streetscape 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 posit value to a variable a value must be based on evidence.

23To enable an estimate of value for the subject property to be derived from a comparable property there must be sufficient elements of similarity, in terms of physical factors as total building area, land area, and age of construction, so as to enable a direct comparison to be made between the comparables and the subject property.

24In this case MPAC’s suggested comparables have enough similarities to the subject property to be chosen as good comparables, such as building and lot size, and also because they all have access to the river, or are located close enough to the river so that they share the same type of marketability as the subject property. The Board accepts the seven sales as the best evidence of current value for the subject property. The Board notes that three of these seven sales are also chosen as good comparables by the appellant.

25The range of values of the seven properties submitted to the Board provides a range of time adjusted sale values between $1,291,460 and $2,024,285. The current value assessment of the subject property at $1,740,000 does not appear to be unreasonable.

26The Board finds that the correct current value of the subject property is $1,740,000.

Equity Analysis

27Section 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 Sales Ratio (“ASR”) is a tool often used to determine if an assessment is equitable with the assessment of similar lands in the vicinity. The ASR 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.

28MPAC made no submissions under s. 44.(3)(b). However, Mr. West submitted thirteen properties located in, Erinwood Village, the same immediate vicinity as the subject property. He testified that the median ASR using sales that are not time-adjusted is 0.90, and argued that it is a good indication that the subject property needs an equity adjustment.

29While the Board would have preferred a larger sample, it tested Mr. West’s premise using the time-adjusted sales for the same thirteen sales located on Jarvis Street, Thompson Street, and Adamson Street. The result is a median ASR of 1.06 indicating that MPAC’s valuation may be resulting in assessments over the values determined in the market place. There is no evidence before the Board showing that an adjustment is required to achieve equity.

30The Board confirms the assessment as returned at $1,740,000 for the 2014 year.

2015 DEEMED APPEAL

31An 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.

32Section 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.