Xiong Mengjiao and Liu Yuan v. Municipal Property Assessment Corporation, 2015 CanLII 51215

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE:

August 13, 2015

FILE NO.:

WR 132138

Assessed Person(s):

Iwona Rusinowska and Marek Rusinowska

Appellant(s):

Xiong Mengjiao and Liu Yuan

Respondent(s):

Municipal Property Assessment Corporation (“MPAC”) Region 15

Respondent(s):

Town of Oakville

Property Location(s):

540 Lakeshore Road East

Municipality(ies):

Town of Oakville

Roll Number(s):

2401-040-080-07800-0000

Appeal Number(s):

3046896 and 3085141 (deemed 2015)

Taxation Year(s):

2014 (and deemed 2015)

Hearing Event No.

581745

Legislative Authority:

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

ARB Case Name:

WR 132138

Heard:

April 7, 2015 in Oakville, Ontario

APPEARANCES:

Parties

Counsel+/Representative

X. Mengjiao and L. Yuan

M. Brookes and X. Mengjiao

MPAC

A. Shariff

Town of Oakville

S. Price

DECISION OF THE BOARD DELIVERED BY ROBERT STEINBERG

INTRODUCTION

1This appeal came before the Assessment Review Board (“Board”) on April 7, 2015 in the Town of Oakville.

2The subject property is located at 540 Lakeshore Road East, Town of Oakville. The lot has an effective lot size of 8,543 square feet (“sq. ft.”) and is improved with a 4,231 sq. ft., quality class (QC) 8 structure used as a single-family dwelling. The subject property is assessed at $2,815,000 for the 2014 taxation year in the residential property class (RT).

3Alim Shariff appeared as a witness for MPAC.

4Mr. Shariff takes the position that the assessment as returned, of $2,815,000 is correct based on his analysis.

5Mr. Shariff submitted Exhibit 1 which included six comparable properties in the vicinity of the subject property and concludes that these comparable sales as adjusted for time at a rate of 23.03% over the time period from January 1, 2009 to December 31, 2012 support a value for the subject property of $2,815,000.

6Michael Brookes, the representative of the owner raises four issues namely:

• The subject property and the comparables used by MPAC were not inspected by Mr. Shariff and none are good comparisons.

• MPAC’s comparables are superior properties as some enjoy a lake view whereas the subject property does not and none are located on a major road.

• The owner of the subject property paid $1.95 Million for the property in 2014 in an arms-length transaction which MPAC did not investigate.

• The three comparables used himself are better comparables and sold within 89%, 86% and 90% of the CVA and along with 14 other properties in the vicinity indicate an average Assessment to Sales Ratio (“ASR”) of 0.89% indicating an over assessment.

7The Board must determine the current value of the subject property for the 2014 taxation year. The Board must also determine whether the assessment is equitable, having reference to the assessments of similar lands in the vicinity.

DECISION

8The assessment of the subject property is reduced from $2,815,000 to $1,950,000 for the 2014 taxation year.

REASONS FOR DECISION

Legislation

9In determining the value at which land shall be assessed, the Board must have regard to the following provisions of the Assessment Act (“Act”):

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.(1) of the Act states:

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

12In determining the value at which any land shall be assessed, s. 44.(3)(a) and (b) of the Act requires the Board to do two things:

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

13The Board’s first task is to determine the current value of the subject property.

14The best indicator 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. The subject property did sell in February 2014. Although MPAC does not consider the sale of the property it being too far from the January 1, 2012 valuation day, the Board relies on this sale at the consideration of 1.95 Million. The sale is only 13 months outside of the December 2012 date that MPAC relies on in its analysis.

15Mr. Shariff provides the Board with MPAC’s Current Value Study in Appendix A, Exhibit 1 the sales of six suggested comparable properties that sold between April 2009 and August 2011. Comparables A at 3,201 sq. ft. and B at 3,172 sq. ft. are considerably smaller than the subject property with a total building area of 4,231 sq. ft. All the comparables used by MPAC are located on interior streets and close to the waterfront with comparables E and F having a lake view.

16Mr. Brookes provides the Board with three comparable properties at 32 Howard Avenue, 58 Chartwell Road, and 244 Watson Avenue in the vicinity of her property which sold in January and February of 2014 all of which appear similar to the subject, however the actual size of the improvement and lot size is not provided. Their respective ASR is 0.89, 0.86, and 0.90.

17Mr. Brookes provides to the Board the Multiple Listing Service (“MLS®”) listings and Property Assessment Detail (“PAD”) reports for MPAC comparables A, B, C, D, E and F. Comparables E and F have a 40 and 50% adjustment factor for their proximity and location to the lake.

18The Board notes that none of the six comparables provided by MPAC, are located on Lakeshore Road East. However the Appellant also has not provided any comparables on Lakeshore Road East nor did he refer to them as being located on major arteries.

19Mr. Brookes, first two issues were largely dealt with through cross-examination of Mr. Shariff, pointing out several reasons why the comparable sales MPAC has shown are not relevant. The assessor admits not inspecting the subject property nor any of the comparable. The Appellant states that he is active in the real estate market in Oakville and had inspected the subject and all of the six comparables when they were listed for sale. In his opinion all of the comparables used by MPAC are superior to the subject for various reasons such as a view of the lake, abutting green space, not on a major traffic artery or superior interiors.

20Mr. Brooke’s third issue relates to the selling price of the subject. It sold in February 2014 for $1,950,000. He provides to the Board the previous real estate MLS® listing information as follows: 1. Listed May 2011 for $2,490,000 and on the market for 93 days; 2. Listed August 2012 for $2,380,000 and on the market for 130 days; Listed September 2013 for $2,188,000 and on the market for 99 days. All the listings were with major real estate firms however the property did not sell until it was listed again in January 2014 for $1,988,000 and then purchased by the current owners in February 2014.

21Mr. Brooke’s fourth issue relates to 14 properties that sold in the vicinity of the subject property in 2012 and along with the three properties that sold in 2014 arrives at an ASR of 0.89 which he contends should be the adjustment used by the Board in regard to achieving equity.

22The Board can only assume from both parties evidence that there were no sales of similar properties to the subject on Lakeshore Road East.

23The Board did not receive any evidence of sales of any other properties located on Lakeshore Avenue East. The picture of the subject and the evidence from the owner is that the property is very close to the travelled portion of the road allowance and that gaining access to Lakeshore Road at busy times can be very difficult. In addition the owner gives evidence as to the vibration of the windows when trucks go by and noise from the traffic. This was not noticed by the owner when she did the inspection of the property prior to submitting an offer. She also confirmed there is nothing wrong with the windows in the house that contribute to this problem.

DECISION

24Accordingly the Board finds that the best evidence of the current value of the subject property is the actual selling price of $1,950,000. The subject property’s exposure on the market at four different intervals from May 2012 to January 2014 indicate that the first three real estate listing prices were not realistic. There is only evidence from MPAC that the market was increasing for the 12 months between the valuation day of January 1, 2012 and December 2012. It is clear to the Board that the unique location of the subject on a major traffic artery and its close distance to the road is reflected in its selling price through an arms-length sale. None of the comparables have a similar location and suffer from the locational obsolescence as the subject.

25Accordingly the Board finds that the current value of the subject property is $1,950,000.

Equity Analysis

26For 2009 and subsequent years, s. 44.(3)(b) of the act places an additional duty upon the Board once the current value has been determined.

27Section 44.(3)(b) states that the Board shall…”have reference to the value at which similar lands in the vicinity are assessed and adjust the assessment of the land to make it more equitable with that of similar lands in the vicinity if such an adjustment would result in a reduction of the assessment of the land.”

28Board finds that there is no evidence before it leading to the conclusion that the current value of the subject property requires a further adjustment in accordance with s. 44.(3)(b) of the Act.

CONCLUSION

29For the reasons stated above the Board finds that the current value of the subject property as of January 1, 2012, the valuation day is $1,950,000.

30Further the Board finds that there is no evidence before it leading to the conclusion that the current value of subject property, as determined above, require an adjustment in accordance with s. 44.(3)(b) of the Act.

31Accordingly, the assessment is reduced from $2,815,000 to $1,950,000 for the 2014 taxation year.

2015 DEEMED APPEAL

32An 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.

33Section 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.