Assessment Review Board
Commission de révision de l’évaluation foncière
ISSUE DATE: June 19, 2015
FILE NO.: WR 129687
Assessed Person(s): Nick Monachese and Assunta Monachese
Appellant(s): Nick Monachese
Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 15
Respondent(s): Town of Oakville
Property Location(s): 109 Thomas Street
Municipality(ies): Town of Oakville
Roll Number(s): 2401-030-030-12710-0000
Appeal Number(s): 2967993, 3033074 and 3085133 (and deemed 2015)
Taxation Year(s): 2013, 2014 (and deemed 2015)
Hearing Event No. 571156
Legislative Authority: Section 40 of the Assessment Act, R.S.O. 1990, c. A.31, as amended
Heard: December 8, 2014 in Oakville, Ontario
APPEARANCES:
Parties
Counsel+/Representative
N. Monachese
Self-represented
MPAC
I. Tsang
Town of Oakville
S. Price
DECISION OF THE BOARD DELIVERED BY CRISTINA MARQUES
ISSUE
1The subject property is a 4,567 square foot two-storey commercial building with retail spaces and offices, built in 1969. It has a site area of 2,376 square feet (“sq. ft.”).
2It is classified in the commercial property class, and for the 2013 taxation year it is assessed at $1,449,000, and for the 2014 taxation year it is assessed at $1,423,000 by the cost approach to value.
3MPAC recommends that the assessment of the subject property for the 2013 and 2014 taxation years be reduced to $1,043,000.
4The Appellant takes the position that the assessment for the subject property is too high. He urged the Assessment Review Board (“Board”) to reduce the assessment of the subject property to $800,000 for both taxation years.
5The Board must determine if the assessments for 2013 and 2014 taxation years reflect 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 current value is $1,043,000 for the 2013 and 2014 taxation years.
7The Board also finds that an assessment at current value does not require an adjustment below current value to make it equitable with the assessments of similar lands in the vicinity.
8The Board orders that the assessments be reduced from $1,449,000 to $1,043,000 for the 2013 taxation year, from $1,423,000 to $1,043,000 for the 2014 taxation year, and that it be confirmed at $1,043,000 for the deemed 2015 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 Assessment Act (“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:
For the 2006, 2007 and 2008 taxation years, land is valued as of January 1, 2005.
For the period consisting of the four taxation years from 2009 to 2012, land is valued as of January 1, 2008.
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.
Case for MPAC
16Ivy Tsang, appearing for MPAC, testified that the subject property is assessed by the market modified cost approach using the Automated Cost Systems (“ACS”), which values major building components in place.
17An estimated replacement cost of the building and land improvements is developed, a deduction made for depreciation and the land value is added.
18Ms. Tsang provided the Board with the sale of three suggested comparable properties, all small commercial properties located on the same street as the subject property, Exhibit 1.
130 Thomas Street sold in November 2011 for a time-adjusted value of $1,958,000. According to Ms. Tsang it has a building total area of 6,774 sq. ft. valued at $757,896. The lot area is 3,049 sq. ft. is valued at $1,200,104 or $394 per sq. ft.
134 Thomas Street sold in June 2013 for a time- adjusted value of $1,291,000. According to Ms. Tsang it has a building total area of 3,043 sq. ft. valued at $282,397. The lot area is 2,987 sq. ft. is valued at $1,008,603 or $338 per sq. ft.
139 Thomas Street sold in October 2013 for a time-adjusted value of $694,968,000. According to Ms. Tsang it has a building total area of 2,564 sq. ft. valued at $82,576. The lot area is 2,564 sq. ft. is valued at $694,968 or $271 per sq. ft.
19MPAC’s evidence shows that the median sales value per square foot for the building component of the suggested comparables is $93.20 per sq. ft.
20Ms. Tsang submitted the three suggested comparables are similar to the subject property because they are all located on Thomas Street, giving them the same exposure to traffic and clientele. They all have the same zoning, allowing them the same permitted uses. They are all part of the Downtown Oakville, Business Improvement Area (BIA). They have similar lot sizes, and the sales have been adjusted to account for the element of time. Ms. Tsang did not provide the Board with the time adjustment factor table, and also did not provide the Board with the assessments values for the suggested comparables. Hence the Board is unable to determine if MPAC’s cost model is determining current values for properties or values that are above or below current value.
21Ms. Tsang testified that these three sales establish a range of value for the subject property from $271 to $394 per sq. ft. of land. The median time adjusted sale price per sq. ft. of land is $338 and Ms. Tsang submits that the recommended assessment for the subject property at $338 per sq. ft. of land is within this range.
22The assessor testified that the subject property was inspected on November 5, 2013, and that corrections were made to reflect the building components, resulting in a new valuation for the building of $240,350, or $51.26 per sq. of building well below the per sq. ft. building values of the suggested comparable properties. Consequently for the 2014 taxation year the assessment was reduced and returned at $1,423,000. At the hearing Ms. Tsang recommended a further adjustment for an assessment of $1,043,000, for both taxation years, based on sales in the vicinity.
23The assessor testified that based on her analysis and sales evidence that the subject property should be valued as follows:
Median Land Residual value per sq. ft. $ 803,088 ($338 x 2,376)
Building value after inspection $ 240,350
Total assessment $1,043,000 (rounded).
Case for the Appellant
24Nick Monachese, the Appellant, provided the Board with Exhibit 2, an additional suggested comparable that being 129 Thomas Street. The market for this suggested comparable is effectively different from that of the subject property because it has a lot area of 5,442 sq. ft. versus the subject property with a lot area of 2,376 sq. ft. The Board rejects this property as a good comparable because the lot size is so much greater.
25Mr. Monachese argued that MPAC’s comparables sold with a premium because they have buildings that are in better condition than the subject property. He testified that the subject property’s building still has the original roof and single pane windows, thus requiring constant maintenance. The Board is unable to use this testimony to support a reduction in assessment because no estimates were presented to the Board as to how much it would cost to renovate the property. The Board cannot arbitrarily assign a negative or positive value to a variable; a value must be based on evidence.
Analysis
Current Value
26In accordance with s. 44.(3)(a) of the Act the Board must determine the current value of the subject property. The 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.
27In this case the best evidence of current value is provided by the three comparable sales provided by MPAC. They are similar properties that sold on the same street as the subject property, within a year of the valuation date, and had their sale prices adjusted to that date. If the subject property should be on the open market it would be under the same market influences as the accepted comparables. The land portion for these comparables sold for a median of $338 per sq. ft. The Board finds the correct current value to be $1,043,000, calculated as follows:
- Land
$338 x 2376 sq. ft. = $803,088
- Building
$240,350
Total
$1,043,000 (rounded)
Equity
28Section 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.
29The parties made no submissions under s. 44.(3)(b). There is no evidence before the Board leading to a conclusion that the current value of the subject property, as determined above, requires further adjustment.
30The Board accepts MPAC’s recommendation to reduce the current value assessment to $1,043,000 for both taxation years.
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.
“Cristina Marques”
CRISTINA MARQUES
MEMBER
Assessment Review Board
A constituent tribunal of Environment and Land Tribunals Ontario
Website: www.elto.gov.on.ca Telephone: 416-212-6349 Toll Free: 1-866-448-2248```