Linda Erin McCoy v. Municipal Property Assessment Corporation, 2015 CanLII 58802

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: September 18, 2015

FILE NO.: WR 133488

Assessed Person(s): Linda Erin McCoy

Appellant(s): Linda Erin McCoy

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

Respondent(s): Town of Gravenhurst

Property Location(s): 110 Steamship Bay Road 202 Muskoka Condo Plan 51

Municipality(ies): Town of Gravenhurst

Roll Number(s): 4402-010-015-09307-0000

Appeal Number(s): 3051227 and 3087977 (deemed 2015)

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

Hearing Event No. 587144

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

Heard: July 8, 2015 in Gravenhurst Ontario

APPEARANCES:

Parties	Representative
Linda Erin McCoy	Self-represented
MPAC	Donna Ridley
Town of Gravenhurst	No one appeared

DECISION OF THE BOARD DELIVERED BY LESLIE FLEMMING

INTRODUCTION

1The subject property is a three-bedroom, one-storey residential condominium unit built in 2006, located in Gravenhurst in an area known as the Muskoka Wharf. The building is ranked as a medium/high rise building. It overlooks Lake Muskoka as well as the commercial developments flanking the bay where the Muskoka steamship docks are located. This condominium is 1,792 square feet (“sq. ft.”) in size. It is an end unit on the second level of the building. The Appellant has a single carport.

2The assessment was returned in the amount of $349,000 for the January 1, 2012 valuation day.

3The parties agreed that the best test of current value is to use comparable sales of similar properties in the same vicinity as the subject property is located. MPAC used sales of six condominium units, some inferior, some superior and some relatively comparable, to support the assessment of $349,000. The Appellant, Linda Erin McCoy, provided six comparable property sales. She argues that the current value for her unit is $300,000 or less.

ISSUE

4The Board must determine both the correct current value for the subject property and whether the assessment of the subject property is equitable with the assessments of similar properties in the vicinity of the subject property.

DECISION

5For the reasons stated below and as directed by s. 44.(3)(a) of the Assessment Act (“Act”), the Board finds that the current value of the subject property as at the valuation day, January 1, 2012, is $290,000.

6The Board finds also that there is no evidence before it leading to the conclusion that the current value of the subject property requires a further adjustment on the ground of equity as set out in s. 44.(3)(b) of the Act.

7Accordingly the assessment of the subject property for the taxation years 2014 and 2015 is reduced from $349,000 to $290,000.

REASONS FOR THE DECISION

8The best measure of current value is an arm’s length and market-tested sale of the subject property on or around the valuation day – January 1, 2012. If no such transaction took place, a further measure of current value is derived from the arm’s length and market-tested sales of comparable properties in the same vicinity and market. This measure acts as a benchmark and gauge of the correctness of the assessed value of the subject property. The burden of proof for establishing the correctness of value lies with MPAC.

9Section 44.(3)(a) of the Act requires the Board to first “determine the current value of the land.” The definition of “current value” is contained in s. 1 of the Act:

“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.

10Section 19.(1) of the Act states that,“…the assessment of land shall be based on its current value…”

11Evidence for MPAC was presented by Donna Ridley, a Property Valuation Analyst. Ms. Ridley filed Exhibit 1, her Property Valuation Report for the subject property. This exhibit contained one photograph of the condominium complex, a property profile, an explanation of the time adjustment factors employed in determining values current to the valuation day, January 1, 2012, as well as her market analysis and equity analysis.

12Ms. Ridley six comparable sales included three units from 110 Steamship Bay and three from what she describes as a “sister building”, 130 Steamship Bay. The values of her comparable units ranged from $500,000 to $280,000. The Board prefers sales taking place close to the valuation day. It is especially important to use values as close as possible to the valuation day as values have fluctuated considerably from the sale prices paid by purchasers in the initial purchase phase to prices paid more recently in sales provided in evidence. For this reason, the Board prefers sales within one year of the valuation day. Unfortunately, in this case, only two of the suggested comparable sales provided by both parties fell within this window, and these two properties are located in 130 Steamship Bay, a sister building to 110 Steamship Bay. For that reason, the Board must extend the window and look at sales occurring outside the one-year period.

13Ms. McCoy filed Exhibit 2, which contained sales data on five similar condominium units, all of which were located in the same building as the subject property. Two of her sales were identical to Sales D and F provided by Ms. Ridley. Ms. McCoy also testified to another sale of Unit 307 occurring in August, 2012, for the amount of $250,000. The property then sold again in February, 2013, for $232,000. Ms. McCoy testified that she is employed as a real estate broker, with extensive experience in selling units in this building from the time of construction. The Board accepts her evidence on this point as credible.

14Of the nine comparable sales provided by the parties, only six were sold within 18 months of the valuation day. The Board accepts the following six sales as comparable to the subject property, all of which are three-bedroom units with two bathrooms and 1,792 sq. ft. in size. 110 Steamship Bay is the subject property’s building while 130 Steamship Bay is the sister building.

15Ms. McCoy gave evidence about distinctions in the management systems in place in each of the two buildings, which, she testified, result in different common expenses being charged in each building. This evidence cannot be used in assessing the value of the building because no evidence was led confirming the economic impact, if any, of this fact to sales prices of units in the respective buildings.

TABLE A: FIVE COMPARABLE SALES

	Sale Date	Sale Amount	Assessed Value
Subject			$349,000
130 SB* #306	Aug-11	$280,000	$286,000
130 SB* #605	Feb-12	$400,000	$418,000
110 SB* #307	Aug-12	$250,000
110 SB* #307	Mar-13	$232,000	$349,000
110 SB* #407	Apr-13	$240,000	$349,000
110 SB* #207	Oct-10	$300,000	$415,000

* Steamship Bay

16Based on the testimony of the parties, the range in values would have been tied to several factors including individual features in the various units and a generally falling market for these particular units. However, sufficient specific information for each of the six units was not available, and so the Board must consider that the units were relatively comparable. In that case, the Board chooses to average the sale prices, which results in a current value of $290,000 (rounded) as at January 1, 2012.

17Ms. Ridley provided the Board with a copy of a decision of the Ontario Divisional Court titled PPF Investments Inc. v. Oakville (Town) and the Municipal Property Assessment Corporation, Region 15, [2010] O.J. No. 186. Ms. Ridley highlighted a quote taken from the Board decision under appeal in that case. The excerpt she highlighted deals with the with the optimal time period around the valuation day for comparable property sales to take place. The highlighted quote is a statement of the Board’s usual preference, but is not binding on another Board. The ratio of this particular case is not directed to this issue but rather to the interpretation of s. 44.(3)(b) and it is of no applicability in the present case.

Equity

18Once the Board has determined the current value of the land, it is required by s. 44.(3)(b) of the Act to:

(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.

19The parties provided some evidence on the issue of equity. Ms. Ridley included her Equity Analysis based on 30 sales of similar properties in the vicinity. Ms. Ridley indicated that the assessment to sales ratio (“ASR”) for the 30 sales had a median of 1.05, which has been accepted by this Board in the past as an acceptable indicator of reasonable accuracy in assessment. Ms. McCoy did not introduce any evidence on this topic. The Board concludes that, based on the evidence, having reference to the value at which similar lands in the vicinity are assessed, no adjustment is required in the assessment of the subject property to make its assessment equitable with other lands in the vicinity. The Board makes no adjustment.

CONCLUSION

20The Board determines that the current value of the subject property is $290,000.

21The Board finds there is no evidence before it supporting the conclusion that the value of the subject property requires an adjustment in accordance with s. 44.(3)(b) of the Act in order to make it equitable with the assessed values of similar properties in the vicinity.

22The Board therefore confirms the assessment of the subject property as at January 1, 2012, for the 2014 and 2015 taxation year in the amount of $290,000.