Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: June 18, 2015

FILE NO.: WR 129743

Assessed Person(s): John Pathin and Aloisia Pathin

Appellant(s): John Pathin

Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 15

Respondent(s): City of Mississauga

Property Location(s): 75 Eaglewood Boulevard

Municipality(ies): City of Mississauga

Roll Number(s): 2105-010-010-15200-0000

Appeal Number(s): 2994959, 3034370 and 3084044 (deemed 2015)

Taxation Year(s): 2013, 2014 (and deemed 2015)

Hearing Event No. 570109

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

Heard: November 26, 2014 in Mississauga, Ontario

APPEARANCES:

Parties	Counsel+/Representative
John Pathin	R. Baranowski
MPAC	C. Stoeken
City of Mississauga	No one appeared

DECISION OF THE BOARD DELIVERED BY CRISTINA MARQUES

ISSUE

1The subject property is a one-storey detached house on a lot of 6,698 square feet (“sq. ft.”), with an effective frontage of 50 feet (“ft.”) and an effective depth of 134 ft. The house was built in 2003 and MPAC classifies its quality level at 6.5. It has total building area of 1,704 sq. ft. with 1,704 sq. ft. of unfinished basement. In addition it has an attached garage with 458 sq. ft.

2For taxation years 2013 and 2014 the assessment was returned pursuant to the Assessment Act (“Act”) at $750,000.

3Christain Stoeken, appearing for MPAC, recommended reducing the assessment to $712,000, for both taxation years, based on data correction that occurred during the Request for Reconsideration review.

4At the beginning of the hearing MPAC amended the lot size for the subject property from 6,848 sq. ft. to 6,698 sq. ft. Both parties agreed on the new measurement and MPAC recommended a further reduction to the current value of $12,000, for a new current value recommendation of $700,000.

5Robert Baranowski, appearing as the representative and witness for the appellant, takes the position that assessments as returned are too high.

6Mr. Baranowski objects to MPAC’s presentation of equity evidence. He submits that MPAC did not disclose its equity evidence on November 7, 2014 at the same time it disclosed its current value evidence, the full 21 days before the hearing as per Rule 45 of Assessment Review Board’s (“Board”) Rules of Practice and Procedure:

45. Disclosure Prior to a Hearing

(1) In the Direct Hearing Stream, within 90 days of filing of an appeal of the assessment, MPAC shall disclose to the appellant and the municipality any assessment data together with the basis or analysis that supports the assessment that has been appealed.

(2) In the Direct Hearing Stream, unless the Board orders otherwise, if a party intends to present documentary evidence at a hearing, at least 21 days before the hearing, the party must provide one copy of each document to each party.

(a) If documentary evidence is not exchanged at least 21 days before the hearing, the Board may refuse to accept the documents at the hearing.

(b) Material in response must be exchanged 14 days prior to the hearing and other parties may respond 7 days prior to the hearing.

(3) In the Standard Stream, timeframes for disclosure of information will be set by Procedural Order and in accordance with the Board’s guidelines (see also Rule 86).

7He stated that the equity evidence was finally disclosed in reply to After-Tax Paralegal Services’ responses.

8Mr. Stoeken argued that After-Tax Paralegal Services’ received MPAC’s response material 14 days prior to the hearing as per the Board’s Rules of Practice and Procedure, which included MPAC’s response in relation to the equity issues raised by Mr. Baranowski.

9The Board admits the equity evidence presented by MPAC for the reason that MPAC disclosed the equity evidence in response to After-Tax Paralegal Services’ response to MPAC’s disclosure evidence 14 days before the hearing as provided for in Rule 45(2)(b) of the Board ‘s Rules. The Board is satisfied there is no prejudice to the appellant in allow this evidence in.

10The 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

11The Board finds that the current value of the property is as of January 1, 2012 is $700,000.

12The Board also finds that an assessment at the current value as found is equitable with the assessments of similar lands in the vicinity; hence no reduction is required to achieve equity.

REASONS FOR DECISION

13The 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 Assessment Act (“Act”) when determining whether or not the assessment under appeal is correct.

14Section 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.

15Section 19.(1) of the Act states:

19.(1) Assessment based on current value. – The assessment of land shall be based on its current value.

16Section 19.2(1) of the Act provides:

19.2(1) Valuation days. – Subject to subsection (5)¹, the day as of which land is valued for a taxation year is determined as follows:

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.

17Section 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.

18Section 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.

19Sections 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.

20Section 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

MPAC’s Position

21Mr. Stoeken, 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 two comparable sales;
• time adjustment factors table;
• sales for price changes over time schedule;
• equity analysis studies.

22He submitted that the time adjusted sale prices of the two 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

Property	Address	Assessment	Sale Date	Sale/ Time Adjusted Sale ($)	Building Size (sq. ft.)	Quality of Construction	Lot Size (sq. ft.)	Year Built
Subject Property	75 Eaglewood Boulevard	750,000/ Recommendation 700,000	n/a	n/a	1,704	Q6.5	50x134/ 6,698	2003
Sale A	1538 Leda Avenue	641,000	Jul-2012	700,000/ 668,301	1,127	Q6.5	60x138/ 9,136	1953/ Effective 1996
Sale B	1385 Hollyrood Avenue	883,000	Oct-2012	860,000/ 804,246	2,052	Q6.5	70x150/ 10,019	1950/ Effective 1992

23In order to find comparable sales, the assessor had to move outside of the subject’s vicinity A61. The suggested comparables are in the vicinities A73 and A76 which are in the same economic area as the subject property, and have similar marketability. Mr. 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 18.32% 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.

24Mr. Stoeken stated that suggested comparables are considered by MPAC to be good evidence of values of properties in the area. He relied on the two 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 time adjusted sale prices of the two comparables provide a range of likely values for the subject property between $668,000 and $804,000. The recommended assessment for the subject property at $700,000 is in this range, as such he urged the Board to accept the recommendation.

Appellant’s Position

25Mr. 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 two properties are summarized in Table 2:

Table 2

Property	Address	Assessment	Sale Date	Sale/ Time Adjusted Sale ($)	Building Size (sq. ft.)	Quality of Construction	Lot Size/ (sq. ft)	Year Built/ Effective
Sale 1	388 Atwater Avenue	615,000	Mar-2012	532,500/ 522,915	1,411	6	65.6x132/ 8,793	1950 / n/a
Sale 2	377 Marf Avenue	646,000	Feb-2011	400,000/ 433,200	1,513	6	60x146/ 8,755	1954/ n/a

26Mr. Baranowski indicated that the two properties sold on the open market for, an unadjusted for time, price of $320 per sq. ft. It is his contention that these two properties, located on the same vicinity as the subject property, are the best indication of current value, and he urged the Board to reduce the assessment of the subject property accordingly to $546,000.

Board’s Analysis of Current Value

27The 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.

28To 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 four properties that they suggest are good comparables.

29Mr. Baranowski’s two suggested comparables are within the same vicinity as the subject property, and they are similar to the subject property in the sense that they share similar building and lot size. However, they are rated as a quality 6, versus the subject property which is rated as a quality 6.5. They were built in 1950 and 1954 respectively; the subject property is considerably newer, built in 2003. The Board has no evidence that the two suggested comparables had any renovations that would influence their effective year built. For these reasons the Board rejects these properties as good comparables.

30Mr. Stoeken urged the Board to consider the two sales provided by MPAC as the most comparable properties to the subject property. While these sales are not in the immediate vicinity of the subject property, they are the best evidence of current value before the Board. Their renovations changed the effective year built, so that they are closer in age to the subject property. They have the same quality of construction, similar total building areas, and effective lot sizes. The properties sold in July and October of 2012 for time adjusted prices of $668,301 and $804,246. The recommended current value assessment of the subject property at $700,000 does not appear to be unreasonable, and is within the range of values of the accepted comparable properties.

31The Board finds that the correct current value of the subject property is $700,000.

Equity Analysis

32Section 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 similar properties in the vicinity are assessed below their current values. 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.

33Mr. Baranowski argues that the following properties show that an equity adjustment is warranted based on the average assessment per sq. ft. value of properties in the vicinity.

• 1376 Hollyrood is assessed at $ 435 per sq. ft.
• 91 Angelene is assessed at $434 per sq. ft.
• 609 Raphael is assessed at $357 per sq. ft.
• 3243 Gwendale is assessed at $351 per sq. ft.
• 2130 Camilla is assessed at $413 per sq. ft.
• 388 Atwater is assessed at $435 per sq. ft.
• 37 Marf is assessed at $426 per sq. ft.

Average assessment of $407 per sq. ft.

34He submits that all seven properties are located in the same general vicinity as the subject property, and that their average assessment of $407 per sq. ft. is a good indication that the subject property needs an equity adjustment pursuant to s. 44.(3)(b) of the Act.

35The rate per square foot analysis is not useful when the properties are not identical in all features. The Board also notes that Mr. Baranowski’s suggested list of comparables for equity purposes has five properties that are assessed at a higher rate per sq. ft. of building than the subject property’s recommendation, and a median assessment of $434.00 per sq. ft. a value also considerably higher than MPAC’s recommendation at $410.80 per sq. ft.

36To determine whether properties are assessed at or close to their current values MPAC relies on the sales of 30 properties, within 0.53 kilometres of the subject property, as listed in the Equity analysis of Exhibit 1. The median ASR for the sold properties is 1.01, which is within MPAC’s acceptable range of ASRs between 0.95-1.05. 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

37The current value of the property for the 2013 and 2014 taxation years is $700,000. There is no evidence to support a reduction in the assessment below current value. The assessment is reduced, as per MPAC’s recommendation, from $750,000 to $700,000 for the 2013 and 2014 taxation years.

2015 DEEMED APPEAL

38An 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.

39Section 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.

Footnotes

1. 1Subsection 5 permits the Minister to prescribe a different valuation day. A different day has not been prescribed.