Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: July 10, 2015

FILE NO.: WR 126771

Assessed Person(s): Wojciech Jan Wiercienski

Appellant(s): Wojciech Jan Wiercienski

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

Respondent(s): Township of Georgian Bay

Property Location(s): 7116 Go Home Lake Shoreline

Municipality(ies): Township of Georgian Bay

Roll Number(s): 4465-020-017-06100-0000

Appeal Number(s): 2999382, 3023376 and 3088067 (deemed 2015)

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

Hearing Event No. 568397

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

Heard: July 30, 2014 in Port Severn, Ontario

APPEARANCES:

Parties	Counsel+/Representative
W. J. Wiercienski	Self-represented
MPAC	M. D’Andrea
Township of Georgian Bay	No one appeared

DECISION OF THE BOARD DELIVERED BY TYRONE D. SKANES

ISSUE

1The appeal before the Assessment Review Board ("Board") is an appeal by Wojciech Jan Wiercienski in respect of the assessment of a seasonable/recreational detached dwelling ("subject property") - first tier on water - located at 7116 Go Home Lake Shoreline, Georgian Bay.

2The subject property is a single family, detached bungalow that has an effective lot size of 1.55 acres with 163.00 feet ("ft.") of effective frontage and no depth measurement. The house was built in 1965 and has a total building area of 732 sq. ft. The property is on a slight slope with a northern exposure and a permanent dock.

3Michelle D'Andrea, appearing on behalf of MPAC advised that the dwelling has been deemed worthless because of its severe state of decay. She testified that the assessment of $180,000 was essentially for the land portion of the subject property. Ms. D'Andrea said she believed that the assessment was fair and reasonable and asked that it be confirmed for the 2013 and 2014 taxation years.

4Wojciech Wiercienski, appearing on his own behalf, advised the Board that he was now the sole Appellant as his wife had passed away recently. The Board expressed its condolences to Mr. Wiercienski and advised it would make the noted change.

5Mr. Wiercienski testified that he agreed with Ms. D'Andrea's opinion on the condition of the cottage. He advised that he had not used it in some years because of health concerns for various family members, including himself and he had been unable to tend to the upkeep. He said that he would present pictures to demonstrate the cottage's condition. However, he disagreed with MPAC's assessment, saying that it was too high. He asked the Board to lower his assessment to a range of between $130,000 to $140,000, which was a value he obtained from a real estate professional who worked in the area and was familiar with the market.

DECISION

6The Board is required by the Assessment Act (“Act”) to do two things:

1. Section 44.(3)(a) requires the Board to “determine the current value of the land.”

2. The Board finds that the current value of the subject property as of January 1, 2012, is $157,600 (rounded).

3. Section 44.(3)(b) requires the Board to “have reference to the value at which similar lands in 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.”

The Board finds that no adjustment is required to be made for the purpose of equity.

7Therefore, the assessment of the subject property is reduced from $180,000 to $157,600 (rounded) for the 2013 and 2014 taxation years, in the residential tax class.

REASONS FOR DECISION

8For the 2014 and 2013 taxation years, in determining the value at which land shall be assessed, the Board must have regard to the following provisions of the Act:

9Section 19.(1) of the Act states:

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

10Section 1 of the Act states:

“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 19.2(1) 3 of the Act states:

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.

12Section 44.(3) of the Act states:

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.

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.

MPAC's Position

Current Value

15The best test of current value is an arm’s length and market tested sale of the subject property on the valuation day, January 1, 2012 or close to it. If there has been no recent sale of the subject property, as in this case, the next best measure of current value is arms' length and market tested sales of comparable properties in the same vicinity and market on or close to the valuation day. This measure acts as a benchmark and a gauge of the accuracy for the assessed value of the subject property and comparable properties.

16To 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 such as total land area, land frontage and depth, if on water, building size and age of structure, physical condition, etc.; and in terms of neighborhood characteristics such as access to amenities, so as to enable a direct comparison to be made between the comparable property and the subject property.

17Ms. D'Andrea was affirmed. She testified that the direct sales comparison approach to value had been used in determining current value and entered a Valuation Report into evidence as Exhibit 1.

18Ms. D'Andrea testified that she used the sales of five properties in proximity to the subject property for comparison. These properties area described as:

Property	Lot size Acres	Frontage Feet	Building Size Sq. Ft.	Sale date	Time Adj. Sale Price	Assessment $	Year Built
Subject Property	1.55	163	732			180,000	1965
Sale A	1.32	175	776	Sept/09	316,602	301,000	1962
Sale B	1.36	184.05	768	Mar/09	312,355	302,000	1960
Sale C	0.50	200	509	Jul/09	270,004	213,000	1960
Sale D	1.0	167	878	Aug/12	217,117	232,000	1961
Sale E	0.85	320	796	May/12	280,630	284,000	1960

19Ms. D'Andrea said that despite the fact that all of the comparable properties were currently being occupied, as opposed to the subject property, she determined that they were suitable for comparison. She said that in her opinion Sale D was the most comparable to the subject property, in that it had a recent sale in August of 2012, the cottages were similar in size and age of construction. She said that in accounting for the poor condition of the subject property, in comparison to Sale D, she estimated that the market value of the subject property to be $180,000.

20Ms. D'Andrea concluded her presentation on value by opining that her analysis demonstrated that the assessment of $180,000 was fair and reasonable and recommended that it be confirmed for the 2014 and 2013 taxation years.

Equity

21Ms. D'Andrea presented an equity study into evidence whereby she analyzed the sales of 30 residential properties located within 6.39 kilometres ("kms") of the subject property that had sold between January 2009 and December 2012. She determined that the median Assessment to Sales Ratio ("ASR") was 1.03 and said that this demonstrated to her that similar lands in the vicinity were being assessed at their correct current values and no adjustment was necessary for equity.

Appellant’s Position

Current Value

22Mr. Wiercienski, appearing on his own behalf, provided affirmed testimony. He advised the Board that he was now the sole Appellant as his wife had recently passed away.

23Mr. Wiercienski testified that there was a substantial amount of material in his exhibits that he had not exchanged with MPAC. The materials included photographs of the subject and comparable properties he wished to use, a letter from a real estate professional providing an opinion on market value for the subject property and other documents.

24Ms. D'Andrea objected to this material being accepted as exhibits, as she had not received them in accordance with the Board Rule on exchanging Productions. Mr. Wiercienski provided Ms. D'Andrea with a copy of his materials and the Board took a short recess for her to examine them. Upon re-convening, Ms. D'Andrea repeated her objection, advising there was a considerable amount of material for her to examine and to do so properly, she would require more time.

25The Board advised there was not enough time left in the day to allow for a complete review of the documents and would entertain a motion for an adjournment. Mr. Wiercienski had advised the Board that he had difficultly preparing for this appeal as he was suffering from cancer and was currently undergoing chemotherapy treatment. Ms. D'Andrea said that she did not think an adjournment was in anyone's best interests and agreed to proceed.

26Mr. Wiercienski entered Exhibit 2 into evidence, a voluminous exhibit containing photographs of both the subject property and properties Mr. Wiercienski wished to use as comparable properties and a letter from Bryan Coxworth of Royal LePage In Touch Realty Inc., 705-790-7629.

27Mr. Wiercienski testified that he purchased the property in 1986 from the original owner, who had built it mainly from second rate materials. The cottage was supported by stilts and rested partly on tree trunks and stones. The cottage was not winterized and there was no septic system.

28Mr. Wiercienski said that the water frontage was unsuitable for children as it was very rocky and about ten feet into the water the rocks ended and then there was a mud bottom.

29Mr. Wiercienski said that he made some minor improvements to the building but no work has been done over the past 12 years. He said that he has not been there much during that time period because of personal problems. About four and a half years ago he visited and found the front deck collapsed. Recently he flew over the property and took pictures of the cottage.

30Mr. Wiercienski referred the Board to the photographs of the subject property and advised that he appreciated MPAC's decision to consider the structure worthless. He pointed out that there was no bathroom inside the building and said that the outhouse facilities were unusable. In the photograph depicting the outhouse it was obviously listing badly. Mr. Wiercienski advised that there was hydro to the building but it was of little use, as the building would require extensive renovations to make it habitable but said that realistically what would have to happen would be to tear down the existing structure and re-build. The pictures show a building that is obviously decaying both inside and particularly outside. The deck surrounding the building appears to be unstable.

31Mr. Wiercienski said that he was advised by the township's building department that it would be helpful for him to install a septic system when applying for a building permit. He said that he was quoted $12,000 to have a system installed on the property.

32Mr. Wiercienski said it is obvious that the cottage is uninhabitable and he obtained an opinion as to the potential value of the property from an area real estate professional, familiar with the local market. He referred the Board to a letter from Bryan Coxworth.

33This letter was on Royal LePage, In Touch Realty Inc. letterhead. Mr. Coxworth was identified as a sales representative. In the letter he informed Mr. Wiercienski that this opinion was not to be considered an appraisal of the property. It was strictly his opinion as to what the property might realize on the open market. Mr. Coxworth said that he based his opinion using the Comparison Cost Estimate and verified it against the Replace Cost Estimate, using the sales of four properties on Go Home Lake with boat access. Those four comparative properties were not identified.

34Mr. Coxworth opined that the approximate value of the subject property as of the January 1, 2012 valuation date was in a range between $130,000 to $140,000.

35Mr. Wiercienski introduced seven comparable properties into evidence that have recent sales. They are described as:

Property	Lot size Acres	Frontage Feet	Building Size Sq. Ft.	Sale date	Sale Price	Assessment $	Year Built
Subject Property	1.55	163	732			180,000	1965
Comp 1	1.21	155	585	July/2013	125,000	229,000	1959
Comp 2	0.79	72	776	July/2013	178,000	214,000	1960
Comp 3	1.16	216.54	574	May/2013	189,000	255,000	1960
Comp 4	1.05	275	820	June/2013	185,000	292,000	1961
Comp 5	1.02	95	615	Nov/2012	225,000	259,000	1960
Comp 6	0.90	200	630	May/2013	220,000	263,000	1961
Comp 7	1.72	175	831	Aug/2013	190,000	238,000	1962

36Mr. Wiercienski also provided real estate listings and photographs for the comparable properties, with the exception of Comparable 5. The interior and exterior photographs depict properties that are in obviously much better condition than the subject property and all of the cottages are currently being used.

37Mr. Wiercienski agreed with MPAC's opinion that their comparable properties were superior to the subject property, with the exception of Sale D that was listed as being relatively comparable. He submitted a real estate listing and interior and exterior photographs for this property and posed the rhetorical question as to what aspect of the comparison was even remotely comparable. The photographs depicted a fully finished and furnished cottage, a seemingly stable deck around the exterior, seemingly stable stairs leading down from the deck to another set of stairs that ended at a large dock. Other than the lot sizes being somewhat similar, Mr. Wiercienski questioned the comparability.

38Mr. Wiercienski testified that he had been an engineer during his career and was very familiar with using different statistical models. He questioned MPAC's model used for assessing properties and said that it did not make sense to him. He said that the values they used were not reflective of how recreational properties should be assessed.

39Mr. Wiercienski said that contrary to MPAC's evidence it was his opinion that the real estate market exploded in the area in 2012 and 2013 and this was confirmed for him by conversations he had with several real estate agents who work in the area. He said that the comparable properties that he submitted were indicative of that market explosion. He said that he time adjusted the sales prices to the January 1, 2012 valuation date.

40Mr. Wiercienski concluded his evidence by asking the Board to recognize the decrepit condition of the subject property and reduce the assessment to a range of that recommended by Mr. Coxworth, namely between $130,000 and $140,000.

41On cross-examination Ms. D'Andrea asked Mr. Wiercienski how he chose his comparable properties and he said that he searched for properties that sold in 2012 and 2013 in the $200,000 range. He said that there could have been other properties that sold for more but he did not search for those.

MPAC Summation

42Ms. D'Andrea summed up her argument by posing the question; is the assessment of the subject property reasonable?

43Ms. D'Andrea said that she focused her presentation on market evidence pertaining to the valuation period and that the sales of the comparable properties she used all occurred within the current valuation period, whereas the majority of the appellants comparable properties had sales outside of the valuation period and the sales prices could not be time adjusted to the valuation date. For that reason, she asked the Board to disregard the Appellant’s comparable properties whose sales occurred in 2013.

44Ms. D'Andrea said that Mr. Wiercienski's argument regarding MPAC's model ought to be disregarded and provided the Board with a prior decision of the Board, Cogen v. MPAC and the City of Ottawa, before Member J. de P. Seaborn heard by teleconference on June 29, 2004, in which the member decided the issue before the Board was not whether MPAC's model made sense or not but determining the correct current value of the subject property.

45Ms. D'Andrea ended her presentation by saying that she believed that the assessment of $180,000 for the 2013 and 2014 tax years, in the residential tax class was fair and reasonable and that it should be confirmed at that value.

Appellants Summation

46Mr. Wiercienski summed up his argument by saying that he disagrees with MPAC's assertion that this was a declining market and that, in fact, according to real estate agents working in the area the market exploded in 2013.

47Mr. Wiercienski said that he was very familiar with statistical models and the model used by MPAC was not detailed enough to determine what a willing buyer would pay to a willing seller.

48Mr. Wiercienski said that the comparable properties that he submitted into evidence more closely reflected the subject property's value and that the property that sold for $125,000 was much nicer than the subject property.

49Mr. Wiercienski ended his presentation by saying that if someone paid $180,000 for the subject property he would question their sanity and said that the value was more in line with Mr. Coxworth's range of $130,000 to $140,000 and asked the Board to reduce the assessment to somewhere in that range.

Board's Deliberations

50The Board has carefully considered the testimony of the parties and the documentary evidence tendered as exhibits.

51The Board usually considers one year on either side of the valuation date as an appropriate time period when considering the sales of comparable properties. The Board can and will extend this time period when there are an insufficient number of appropriate sales, as in this instance.

52Ms. D'Andrea, in her opening remarks, advised the Board that she considered the structure on the subject property to be worthless and that the assessment was essentially for the land portion.

53Ms. D'Andrea submitted the sales of five comparable properties for consideration. However, all of these properties had cottages that in no way resembled the cottage on the subject property, in that all were being used whereas the subject property's cottage was inhabitable.

54Similarly, Mr. Wiercienski entered the sales of seven comparable properties for consideration, all of which were currently being used as a cottage. The photographs included in Exhibit 2 of the subject property and the comparable properties clearly demonstrated the difference between them and the unsuitability of using the comparable properties as comparators to the subject property.

55Neither of the parties submitted vacant land or properties with inhabitable cottages as comparable properties.

56The Board does not find that there is a direct comparison between any of the comparable properties and the subject property, in as far as the cottages are concerned.

57In the absence of other comparable characteristics, it is the Board's view that lot size and/or water frontage is an important contributor to value of waterfront properties.

58The Board compares the 1.55 acres of the subject property to those of the 12 sold properties; with their lot areas ranging from to 0.50 acre to 1.72 acres, and the water frontage that ranged from 72 feet to 320 feet.

59The Board calculated that the average water frontage of all twelve properties was 186.21 feet. By dividing this value into the subject property's assessment of $180,000 returns a value of $966.65 per foot. Applying this value to the subject property's water frontage of 163 feet returns a value of $157,563.

60The Board finds the current value of the subject property to be $157,600 (rounded).

61Mr. Wiercienski submitted an opinion letter from Bryan Coxworth, a real estate agent working in the local market, in which he opined that the value of the subject property was in a range between $130,000 and $140,000. However, Mr. Coxworth made clear that this was not an appraisal, it was solely his opinion. He advised that he had used the sales of properties located on Go Home Lake, with boat access, to form his opinion. This information was not provided to the Board and this omission detracted from the weight that the Board could attach to Mr. Coxworth's opinion. It would have been very instructive for the Board to have been supplied with the material forming the opinion. In its absence, the Board gave little weight to the opinion.

62Mr. Wiercienski attempted to contradict MPAC's comparable properties by saying that he disbelieved the evidence that there had been a declining real estate market in the area. He said that he had spoken to several real estate professionals who told him that the market had exploded in 2012 and 2013. However, he did not offer any evidence to support this opinion and the Board disregards it.

63Mr. Wiercienski disputed MPAC's statistical model used to value properties by saying it was insufficient to determine what willing buyers would pay willing sellers for a property. The Board agrees with the Cogen decision provided by the assessor, in that the issue before the Board was not whether MPAC's model made sense but to decide if the current value of the subject property was correct.

64Mr. Wiercienski offered no evidence, other than his opinion, that the model was defective and therefore the Board disregards this objection.

65Ms. D'Andrea submitted an equity analysis into evidence where she analyzed the sales of 30 residential properties located within 6.39 kilometres ("kms") of the subject property and which sold between January 2009 and December 2012. The median ASR was determined to be 1.03 and Ms. D'Andrea concluded that similar lands in the vicinity were being assessed at their correct current values and an adjustment was not required for equity.

66This analysis was not challenged by Mr. Wiercienski and the Board accepts it.

CONCLUSION

67The Board finds that the current value for the subject property as at January 1, 2012 to be $157,600 (rounded).

68The Board finds that an equity adjustment is not required pursuant to s. 44.(3)(b) of the Act.

69Therefore, the assessment of the subject property is reduced to $157,600 (rounded) for the 2014 and 2013 taxation years, in the residential tax class.

2015 DEEMED APPEAL

70An 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.

71Section 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.