Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: June 11, 2015 FILE NO.: WR 129686

Assessed Person(s): Jeffrey Robert Uzbalis and Sheila Mary Uzbalis Appellant(s): Sheila Uzbalis Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 15 Respondent(s): City of Misssissauga

Property Location(s): 1628 Crediton Parkway Municipality(ies): City of Mississauga Roll Number(s): 2105-010-012-0160-0000 Appeal Number(s): 2996200, 3031632 and 3083444 (deemed 2015) Taxation Year(s): 2013, 2014 (and deemed 2015) Hearing Event No. 570111

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

Heard: December 2, 2014, in Mississauga, Ontario

APPEARANCES:

Parties Jeffrey Robert Uzbalis and Sheila Mary Uzbalis MPAC City of Mississauga

Counsel⁺/Representative Robert Baranowski Roger Leroux No one appeared

MEMORANDUM OF ORAL DECISION DELIVERED BY CRISTINA MARQUES ON DECEMBER 3, 2014

INTRODUCTION

1The subject property is a one-storey detached house on a lot of 22,651 square feet (“sq. ft.”), with an effective frontage of 100 feet (“ft.”) and an effective depth of 223 feet. The house was built in 1956 and MPAC classifies its quality level at 6.5. It has total building area of 1,528 sq. ft. with a basement with 1,704 sq. ft. of which 802 sq. ft. are finished. In addition it has an attached garage with 480 sq. ft., and an outdoor pool.

2For taxation year 2013 the assessment was returned at $1,055,000, and for taxation year 2014 it was returned at $897,000 pursuant to the Assessment Act (“Act”).

3Mr. Leroux, appearing as advocate for MPAC, indicated that the $158,000 reduction for the 2014 taxation year is based on sales evidence, and that the 2013 taxation year recommendation is for the same reason.

4Mr. Baranowski, appearing as the representative and witness for the appellant, takes the position that the recommendation is not adequate, and that the assessments are still too high.

5The Board must determine if the assessments for 2013 and 2014 taxation years reflect correct current value as of the legislated valuation day, January 1, 2012, and if they are equitable, having reference to the assessments of similar lands in the vicinity.

Decision

6The Board finds that the correct current value of the property as of January 1, 2012 is $897,000.

7The Board also finds that an assessment at current value as found is equitable; hence no reduction is required to achieve equity.

8The Board orders that the assessment for the 2013 taxation year be reduced from $1,055,000 to $897,000 and confirmed for the 2014 and 2015 taxation year at $897,000.

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) 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. 2007, c. 7, Sched. 1, s. 5.

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) Reference to similar lands in vicinity 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

17Mr. Stoeken, appearing as witness 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 four 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 four comparables 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

Address	Assessment	Sale Date	Sale/ Time adjusted Sale ($)	Building Size (sq. ft.)	Quality of Construction	Lot Size Sq.ft.	Year Built
Subject Property	1628 Crediton Parkway	1055,000/ Recommendation 897,000	n/a	n/a	1,528	Q6.5	100x223/ 22,651
Sale A	1387 Broadmoor Avenue	907,000	September2012	950,000/ 891,121	1,412	Q6.5	100x165/ 16,117
Sale B	211 Glenview Drive	899,000	October-2012	900,000/ 838,109	1,477	Q6.5	100x150/ 14,810
Sale C	1629 Credition Parkway	747,000	January-2012	760,000/ 757,058	1,572	Q6.5	100x175/ 17,424
Sale D	1544 Broadmoor Avenue	972,000	November- 2012	960,00/ 887,558	1,455	Q6.5	150x150/ 22,215

19Mr. Stoeken gave details on MPAC’s analysis of sales that occurred between January 2011 and December 2012, and stated that the area experienced an overall increase of 19.63% in real estate market. Time Adjustment Factors (“TAF”) for each month during the study period were provided together with the data for the 240 sales analyzed.

20Mr. Stoeken stated that suggested comparables are considered by MPAC to be good evidence of values of properties in the area. He relied on the four 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, as required by s. 19.(1) of the Act. He testified that the comparables are located in the Mineola neighbourhood, as is the subject property, and that the best comparable property is sale D. The time adjusted sale prices for the four comparables provide a range of likely values for the subject property between $757,000 and $891,000. The assessor testified that the assessment for the subject property at $897,000 is in this range, as such he urged the Board to accept the recommendation for the 2013 taxation year, and to confirm the assessment as returned for 2014 taxation year.

Appellant’s Position

21Mr. Baranowski filed Exhibit 2 consisting of the appellant’s issues and calculations. He directed the Board to examine his comparable properties which in his opinion are a good indication of value for the subject property. Details of the three properties are summarized in Table 2:

Table 2

Address	Assessment	Sale Date	Sale/ Time adjusted Sale ($)	Building Size (sq. ft.)	Quality of Construction	Lot Size/ (Sq.ft)	Year Built/ effective
Sale 1	1534 Lochlin Trail	879,000	August 2011	835,200/ 863,596	1,474	n/a	90x152/ 13,680
Sale 2	258 Mineola Road	639,000	October 2012	675,000/ 631,125	1,256	n/a	47x160/ 7,529
Sale 3	1319 Lakebreeze Drive	747,000	Apr-15 2011	597,000/ 636,402	1,386	n/a	65x107/ 6,980

22Mr. Baranowski indicated that the three properties sold on the open market for, an unadjusted for time, price of $515 per sq. ft. It is his contention that these properties, located on the same vicinity as the subject property, are the best indication of current value, and urged the Board to reduce the current value assessment of the subject property to $787,000.

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.

24To 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. Together the parties presented the Board with seven properties that they suggest are good comparables.

25The assessor testified that sale D, located at 1544 Broadmoore Avenue, is the most similar property to the subject. It is within the same vicinity as the subject property, and is similar to the subject property in every significant way. The Board differs; this property is considerably wider than the subject property at 150 feet versus 100 feet. In the Boards view a lot that is 50% wider than the subject property will have a significantly different marketability. The assessor also testified that sale D is a corner lot, and that it benefits from an adjustment, but had no information to quantify such an adjustment. For these reasons the Board rejects sale D as a good comparable.

26The appellant’s sale 2, located at 258 Mineola, has a much narrower lot than the subject property at 47 feet versus 100 feet, and the house built in 1987 is substantially newer than the subject’s house built in 1956. For these reasons the Board rejects this property as good a comparable.

27The appellant’s sale 3, located at 1319 Lakebreeze Drive, has a much narrower lot than the subject property at 65 feet versus 100 feet, and the house is one and half storeys while the subject’s is one storey. For these reasons the Board rejects this property as good a comparable.

28The Board finds MPAC’s comparable sales A, B, and C, and for the appellant’s comparable sale 1 to be the most similar to the subject property, none have green spaces, and properties B and C lack swimming pool, and their time adjusted sale prices are $567.44 and $481.59 per sq. ft. of building respectively; hence the Board will remove the swimming pool value ($27,000) from sale 1, and sale A. In addition it will also remove the green space value ($18,000) from the subject property, as well as the swimming pool.

• Sale A – time adjusted sale is $891,121 minus the pool $27,000 results in $864,121 or $611.98 per sq. of building.
• Sale 1 – time adjusted sale is $863,596 minus the pool $27,000 results in $836,596 or $567.57 per sq. of building.

29The adjusted sale price per s. ft. of building for the comparables ranges between $481.59 and $611.98.

30Expending the same test to the subject property results in:

• The recommended assessment of $897,000 minus the pool at $27,000 and the green space at $18,000 results in a value of $852,000 or $557.59 per sq. ft. of building, well within the range sales values.

31The Board finds that the assessment of the subject property at $587.04 per square foot of building does not appear to be unreasonable and it appears to recognize that the subject property has a swimming pool and abuts green space.

32The Board finds that the correct current value of the subject property is $897,000.

Equity Analysis

33Section 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 a assessment requires an adjustment below current value to make it equitable with the assessments 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.

34Mr. Baranowski provided the Board with a study of 30 properties with a median ASR of 0.83. He argued that all of the properties are located within 2.38 Kilometres from the subject property, and that based on the list the Board should reduce the assessment of the subject property by a factor of 0.83. The Board does not find this report to be of assistance with respect to the subject property. In the Board’s view it is unlikely that 30 randomly chosen properties in any given vicinity would result in ASRs between 0.53 and 0.89. This list does not demonstrate that there is a systemic undervaluation of properties in the vicinity of the subject property; it merely proves that 30 specifically chosen properties are under assessed.

35On the other hand, MPAC’s ASR evidence is a list of 30 properties, within 0.53 kilometres of the subject property, with a median ASR of 0.98.

36Out of the 30 properties:

• 10 have ASR’s between 0.83 and 0.94,
• 12 have ASR’s between 0.95 and 1.05, and
• 8 have ASR’s between 1.07 and 1.68.

37This randomly computer generated list of sales in the vicinity of the subject property, produces an ASR that gives some comfort to the Board that MPAC’s equity study, although not perfect, is showing that 12 out of 30 properties are assessed within MPAC’s acceptable range of ASRs between 0.95-1.05. The median ASR for the sold properties at 0.98 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

38The assessment is reduced, as per MPAC’s recommendation, from $1,055,000 to $897,000 for the 2013 taxation year, and is confirmed as returned for the 2014 taxation year.

2015 DEEMED APPEAL

39An 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.

40Section 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.