Ann Grace Ambler v. Municipal Property Assessment Corporation, 2015 CanLII 52621

Assessment Review Board / Commission de révision de l’évaluation foncière

ISSUE DATE: August 20, 2015

FILE NO.: WR 133738

Assessed Person(s): Ann Grace Ambler

Appellant(s): Ann Grace Ambler

Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 07

Respondent(s): Township of Selwyn

Property Location(s): 3130 Spring Lane North

Municipality(ies): Township of Selwyn

Roll Number(s): 1516-020-502-24002-0000

Appeal Number(s): 2993351, 3018802 and 3073656

Taxation Year(s): 2013, 2014 and 2015

Hearing Event No.: 584447

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

Heard: July 14, 2015 in Lindsay, Ontario

APPEARANCES:

Parties	Counsel+/Representative
Ann Grace Ambler	John Ambler
MPAC	Mark Scott
Township of Selwyn	No one appeared

DECISION OF THE BOARD DELIVERED BY BERNARD COWAN

INTRODUCTION

1The subject property is a 16,553 square foot (“sq. ft.”) vacant waterfront lot with only seasonal access. It has an unusual shape, being long and narrow, with only 50.95 feet (“ft.”) of waterfront. From a valuation standpoint, a dominate characteristic is that it is unbuildable. Consequently, it is currently only used as an access point to a nearby recreational island property.

2This site was initially assessed for the 2013 taxation year at $113,000 by MPAC, a value that incorporated a 50% allowance for its unbuildable circumstance. Following the reconsideration process, MPAC changed the assessments for 2014 and 2015 to $105,000, a value rejected by the appellant. During the disclosure period preceding the hearing, Mark Scott, MPAC’s representative, offered the appellant’s representative, John Ambler, a reduction in the assessment to $90,000. Based on the comparative analysis of five time-adjusted sales (“TAS”) included in his Exhibit 1 Valuation Report (“Report”), Mr. Scott stands by his $90,000 recommendation and considers it to be equitable based on the median assessment to sales ratio (“ASR”) of 0.97 in the Equity Analysis included in that Exhibit.

3Mr. Ambler has rejected this recommendation, as he considers it inadequate, being in his view based on properties in better areas. Instead, he asks that I determine the assessment at about $32,000, which represents the $1,509¹ sale price per front foot of a nearby 2013 sale of a vacant buildable lot, reduced by a 50% unbuildable allowance, and an additional 15% that was disclosed to him by MPAC as having been incorporated into the initial assessment model.

4Based on the sales evidence before my, I must determine the subject property’s current value (“CV”) and then must refer to evidence of other similar properties’ assessments to determine if a reduction to that value is necessary to achieve an equitable assessment for this Ambler property.

DECISION

5The assessments are reduced from $113,000 to $68,000 for the 2013 taxation year and from $105,000 to $68,000 for the 2014 and 2015 taxation years.

Current Value

6Section 19.(1) of the Assessment Act (“Act”) states:

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

7The Act establishes January 1, 2012 as the valuation date for 2013 to 2016 taxation, and defines current value to mean:

“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.

8I must accordingly look to the marketplace to establish the subject property’s CV.

9In so doing, I utilize TAS evidence, as I find it preferable in most closely referencing the January 1, 2012 valuation date. The TAS values utilized by Mr. Scott are based upon the time adjustment (“TA”) factors in his Report, unchallenged by Mr. Ambler and adopted by me. The monthly factors cover the period from January 2009 to December 2012.

10Mr. Ambler introduced several sales without TA. As will be seen below, I have given weight to and utilized one of these transactions that occurred in 2013, without TA. The graph in Exhibit 1 plotting MPAC’s factors indicates the market to be quite “flat” as I would characterize it, indicating an overall market change over the four-year period of only about 2.63% for the 480 sales in what is described as the subject property’s neighbourhood and adjacent ones. Rather than reject the one sale in 2013 that is before me, I find that it merits inclusion in my CV determination because on probability, little dramatic change in the previous rather “constant” marketplace is likely to distort the result. This property is in close proximity to the subject and has water frontage compatible with the other properties in evidence, and its sale price per front ft. on water falls within the range of the TAS introduced by Mr. Scott. To deny inclusion of this property, in this particular circumstance, because it lacks a TA would not be within the spirit of equity expected of this tribunal.

11Because it is rational and reasonable that CVs should fall within differing price ranges for buildable and unbuildable vacant waterfront sites, I have considered the evidence separately for each type.

Buildable Sites

12Of the five sale transactions in Appendix A of Mr. Scott’s Report, I exclude Sales A and B. He considers these to be superior to the subject, and I concur as their lot sizes and locations are out of character with the subject and the other three properties, and there is no evidentiary basis to compare these with the subject or the others in any meaningful quantitative way. I also exclude Sale D, as it is an admittedly unbuildable property. Sales C and E are “relatively comparable” to the subject property according to Mr. Scott, other than these two being buildable.

13Mr. Ambler asked that I consider three properties in near proximity to the subject, all in the same “Spring Lane” community. Only the 2013 sale of 3082 Spring Lane, the property referred to above, merits weight. One of the others, at 3078 Spring Lane, is excluded as it has a boathouse and cottage on it rendering comparison to a vacant lot as inappropriate. The other is a property that did not sell. It is an island 20 ft. from shore, accessed from the mainland by a causeway. Assessed for $45,000, its shoreline and site area are not known by Mr. Ambler. Consequently, it merits no weight in either my sales-derived CV determination, nor in any consideration of its assessment in relation to that for other properties.

14I am consequently left with three properties for my analysis of meaningful sales of buildable vacant waterfront properties. Salient comparative details are set out in the following chart:

Property	Water Frontage (ft.)	Area (sq. ft.)	Sale Price ($)	Sale Price Per Front FT ($)
Sale C	101	19,166	134,914 (TA)	1,336
Sale E	81	9,148	143,854 (TA)	1,776
3082 Spring Lane	111	167,500	1,509
Average	97.7	14,157 (of 2)	148,756
Subject Property	50.95	16,553

15Having addressed and adopted the sale price of 3082 Spring Lane without any time adjustment, I find that the absence of that property’s site area does not merit its exclusion from my CV determination for two reasons. Firstly, Mr. Scott unequivocally acknowledged to me that front footage of waterfront land is the predominate factor influencing such properties’ values. Secondly, that property’s sale price per front ft. falls clearly within the range of that of the other two properties. Consequently, on the balance of probability, I conclude that 3082 Spring Lane’s site area is sufficiently compatible with that of Properties C and E such that my conclusion derived from its inclusion in my comparative sales analysis is not distorted.

16The above chart indicates the average sale price for the properties having an average frontage of 97.7 ft. to be $148,756. Reducing the frontage proportionately to the subject property’s 50.95 ft. establishes a rounded value for the subject of $78,000 (50.95/97.7 x $148,756). This, of course, represents the upper limit of CV for the subject property, as it is based on sales of buildable vacant sites.

Unbuildable Sites

17The only unbuildable waterfront lot in evidence, other than the subject property, is the Sale D site (“D”). It is certainly understandable that this property is considered by Mr. Scott to be the most comparable to the subject property of the five sold properties in his Report. With a frontage of 50 ft., almost identical to the subject property’s 50.95 ft., it nevertheless differs from the subject property primarily in its site size. It is substantially smaller than the subject, having an area of only 2,178 sq. ft. Primarily for this reason, but without introducing an evidentiary basis, Mr. Scott is comfortable with the difference between that property’s $57,865 TAS price and his recommended $90,000 value for the subject.

18I disagree, because D is conceded in cross-examination to be “in a different neighbourhood…at a higher-end lake”, the impact of which, like the much different site area, are not quantifiable from the evidence. Other examples of differences exist, such as D being noted by MPAC as being in poor condition, which would mitigate to an indeterminate extent the neighbourhood variable. I consequently find that there is insufficient evidence to demonstrate a reliable value for the subject based on this one unbuildable property sale. Rather, the $57,865 TAS is indicative of the lower limit of CV for the subject property, because the subject property’s site area is substantially larger.

CV Determination

19A reasonable CV for the subject property is found to be $68,000. This represents the (rounded) mid-point between the $57,865 and $78,000 lower and upper limits of values indicated by the evidence to merit any weight in this matter.

20I do not adopt a 50% adjustment to the $78,000, as implied from Mr. Ambler’s calculations, because the sale of D, a much smaller site but otherwise a very similar property, would inherently have had the unbuildable circumstance incorporated into its sale transaction. That sale would have had the 15% adjustment that is within MPAC’s model likewise incorporated.

21I attribute no weight to Mr. Ambler’s comparative cost analysis between the annual property tax of about $850 and the $500 cost per annum of using a marina instead of the subject property to facilitate access his island property. While there may be merit to his logic, I am bound by the Act to determine CV in reference to the marketplace, and have done so above. The approach referenced by Mr. Ambler introduces an element beyond that mandate.

Equity of the CV with other Properties’ Assessments

22Section 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.

23The evidence of comparative assessed values for my reference is sparse and unconvincing, and for this reason I conclude that the current value of $68,000 for the subject property is not demonstrated to be inequitable. Accordingly no additional downward adjustment is justifiable.

24The burden of proof or onus respecting s. 44.(3)(b) of the Act rests with the appellant, and has not been met. Mr. Ambler introduced only one other property’s assessment for my consideration. That property, assessed at $45,000, merits no weight because it varies from the subject in three ways that are not similar and are in any event not quantifiable from the evidence; it is understood to be buildable, it is an island connected by a causeway to the mainland, and it has an indeterminate but substantially different shoreline estimated by Mr. Ambler to be 400-500 ft.

25Because the Act places an obligation on me to refer to the assessments of similar lands in the vicinity, I nevertheless look to the other property assessments before me in an endeavor to meet this objective. There are essentially two sources for this purpose in the evidence before me; an Equity Study that is included in Mr. Scott’s Exhibit 1, and the assessments indicated by him respecting the five sales in Appendix A of his report, in response to my questioning.

26Neither source merits determinative weight for the reasons that follow.

27The Equity Study is a listing of 30 assessment to TAS ratios (“ASRs”) of what are purported to be similar properties located within 12.27 km of the subject property. According to the Study, all are residential properties and are accordingly deemed “similar” by MPAC, being of the same general nature, character or function.

28As the subject is a vacant, unbuildable property, I have doubts as to its similarity with the 30 properties, as all are buildable. Furthermore, all are indicated to be residential properties, but there is no indication whether or not they are vacant or have assessable structures. One might argue that the vacant waterfront land market differs from that for built cottage sites. Nevertheless, for my consideration of the Study, I will assume that MPAC’s criteria for “similarity” is met by these 30 ASRs.

29I find that this particular Equity Study merits negligible weight, because:

• the range of ASRs is substantial, from a low of 0.25 to a high of 2.41. MPAC measures the level of appraisal achieved such that when a median ASR falls between 0.95-1.05, it considers current value assessments to be indicative of sales prices in the vicinity. It also references an industry standard that broadens the satisfactory range for the median to between 0.90-1.10. While customarily several outliers could be expected, this is not the case in this instance. Here only 7 of 30 ASRs fall between 0.95-1.05, and 21 of 30 are outside of the range of 0.90-1.10. In fact, fully one-third of the ASRs fall outside of the ASR range of 0.75-1.25. This Study is one substantially comprised of outliers. The 0.97 median nevertheless falls within the sought range, lending a modicum of weight to my reference.
• it does not demonstrate equity among individual properties as measured through the Coefficient of Dispersion (“COD”). The COD is described in the Study as measuring the average percentage deviation from the median ratio, such that “Low CODs imply equitable assessments and that the median ratio is representative of most ratios in the sales sample.” MPAC and an industry standard call for CODs of no more than 15 for residential properties and no more than 20 for recreational waterfront sites. The COD of 26.2 for this Study fails the test for either category of property by a substantial margin, affirming my conclusion that it is primarily a compendium of outliers.

30Addressing the assessments of the sales in Appendix A, Mr. Scott’s testimony is that the assessments for Properties A to E sequentially are $257,000, $166,000, $114,000, $22,000, and $135,000 respectively. I calculate the respective ASRs to be 1.40, 0.82, 0.84, 0.38, and 0.94. This small sampling of properties considered by Mr. Scott to be most suitable for a comparative sales analysis is of limited value for an assessment comparison, because all but the Sale D property are buildable, and there is no quantifiable basis to evaluate the impact of this significant difference. Furthermore, only D has water frontage remotely close to that of the subject property, the others ranging from 85-121 ft. Such dissimilar properties are not indicative of inequity among these properties’ assessments in relation to the CV I have determined for the subject property. Furthermore, this is a small sampling and is in itself demonstrative of an overly broad range of ASRs, much like that in the Equity Study.

31The D property’s assessment is at $22,000, whereas its TAS is for $57,865. A difference of such magnitude renders MPAC’s assessment for this sold property as erroneous, on the balance of probability, because the TAS value is rational, and its actual sale at $55,000 in April 2010 is absolute. In any event, this single unbuildable property’s assessment is not in itself indicative that a reduction is merited, because s. 44.(3)(b) of the Act requires my reference to be to the assessments of “similar lands” [plural], not a single similar property.

32Equity, or alternatively inequity of the subject property’s CV in comparison to other properties’ assessments are not determinatively evident from the Equity Study or from the properties introduced by Mr. Scott in Appendix A to his Report. Consequently, my reference indicates no change to the CV is merited on the evidence before me.

CONCLUSION

33Neither the value indicated by my analysis of the evidence for the three sales of buildable vacant waterfront lots nor my consideration of the only sale of an unbuildable lot are individually determinative of a CV for the subject property. However, together they are indicative of a reasonable range within which the value for the unbuildable subject likely falls. The mid-point of the range is $68,000, and I have accordingly found this to be the CV for the appellant’s property for the 2013, 2014 and 2015 taxation years. My reference to the assessments of other properties in the vicinity is not indicative of an inequity with that for the subject, and no additional adjustment is made.

Footnotes

1. 1$1,504 per Mr. Ambler. I assume this value was misread by him from his notes, as the sale price of $167,500 divided by the frontage of 111 ft. equates to $1,509 per ft. This minor discrepancy has no impact on this decision.