Tatiana Kavecka and Vadim Kavetsky v. Municipal Property Assessment Corporation, Region 16 and Town of Innisfil, 2015 CanLII 58808

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: September 18, 2015

FILE NO.: WR 132137

Assessed Person(s): Tatiana Kavecka, Vadim Kavetsky

Appellant(s): Tatiana Kavecka, Vadim Kavetsky

Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 16

Respondent(s): Town of Innisfil

Property Location(s): 2071 Gibson Street, Plan 51M987 Lot 155

Municipality(ies): Town of Innisfil

Roll Number(s): 4316 010 023 07987 0000

Appeal Number(s): 3041627 and 3087773 (deemed 2015)

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

Hearing Event No. 581448

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

Heard: April 15, 2015 in Innisfil, Ontario

APPEARANCES:

Parties

Representative

Tatiana Kavecka

Self-represented

Vadim Kavesky

MPAC

Adam Parker

Town of Innisfil

No one appeared

DECISION OF THE BOARD DELIVERED BY LESLIE FLEMMING

INTRODUCTION

1This matter was heard at the Town of Innisfil on April 15, 2015. The Board reserved its decision at the request of the Appellants.

22071 Gibson Street is a relatively new home, surrounded with similar new homes and new construction in the Town of Innisfil. The home was purchased by the Appellants from the builder in June, 2013. The value has been returned for January 1, 2012, the valuation day, in the amount of $458,000. The Appellants appeal the assessment for 2014.

3MPAC argues that the assessment is justified based on the sales prices of similar properties in the neighbourhood. The Appellants contest the assessment on the ground that the purchase of a builder’s home involves purchasing an unfinished lot in an unfinished neighbourhood and being subjected to months and possibly years of construction noise, dirt, truck traffic and inconvenience. They also submit evidence of several comparable resales from the neighbourhood to support their argument that the assessed value of their home is too high. The Appellants urge the Board to find the current value of the subject property similar to properties in their neighbourhood which sold for the amount of $406,000 (rounded).

ISSUES

4What is the correct current value of the subject property?

5Is an assessment at the current value of the subject property equitable with the assessed values of similar lands in the vicinity, and, if not, should the assessed value be reduced to make it equitable?

DECISION

6The Assessment Review Board (“Board”) determines that the current value of the subject property is $458,000.

7The Board finds that 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 Assessment Act (“Act”) in order to make it equitable with the assessed values of similar properties in the vicinity.

8Accordingly, the assessment of the subject property as at January 1, 2012, for the 2014 taxation year is confirmed at $458,000.

REASONS FOR THE DECISION

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) states that:

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

11The best measure of current value is an arm’s length and market-tested sale of the subject property on or close to the valuation day – January 1, 2012. If no such transaction took place, a further measure of current value can be 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.

12To enable an estimate of value for the subject property to be derived from an analysis of comparable property sales, there must be sufficient elements of similarity in terms of physical factors. Factors for comparison will usually include lot size and topography, the number and quality of primary and secondary structures built on the land, and amenities which can include porches and decks, garages, swimming pools and other features. Sales occurring close to the valuation day, January 1, 2012, will be the most useful in drawing comparisons with the subject property.

13Adam Parker, on behalf of MPAC, introduced Exhibit 1, comprising a profile of the subject property, and MPAC’s market study focussing on five properties in proximity to the subject property. One of the properties sold twice, for a total of six comparable sales. Mr. Parker outlined his approach to adjusting for the passage of time and provided the basis for his the “time adjustment factors” used to make each sales price current to the valuation day, January 1, 2012. The analysis was not contested by the Appellants.

14The subject property is a two-storey, brick-sided home of a total area of 3,090 square feet (“sq. ft.”) situated on a 9,289.15 sq. ft. lot with 50.07 feet of frontage on Gibson Street. The basement is finished; there are four bedrooms, four full bathrooms and a half bathroom, central air, forced air heating, and one fireplace. MPAC rated this home as a quality 6.5 out of 10. The home has an attached garage of 372 sq. ft. and it abuts a green space which is not a park. It has a basement walkout.

15The six comparable sales provided by MPAC and contained in Exhibit 1 appear to be similar homes built in subdivisions. One example, 2254 Dawson Crescent, is located in close proximity to the subject property while the remaining four examples are located in another subdivision in Innisfil. All the comparable sales were built within seven years of the subject property and all have been ranked by MPAC as being of the same quality as the subject property. All have attached garages at least as large as the one possessed by the subject property. All have basements, although none have finished basements like the subject property does (an area of 1,089 sq. ft.). While four of the six comparable homes are somewhat larger overall than the subject property’s home, none of the six have as much site area as the subject property. None of the six comparable sales has a basement walkout.

16The six comparable sales put forward by MPAC set out a range of values between $363,285 (2254 Dawson Crescent, time adjusted sale in December, 2012) and $491,576 (1003 Nantyn Drive, time-adjusted sale in June, 2011). When the Dawson Crescent property re-sold in 2013, it sold for $433,000.

17Mr. Parker also filed Exhibit 2, photographs of the subject property from the front, sides and rear, and also Exhibit 3, a copy of a listing and property profile for 2069 Gibson Street, Innisfil.

18Vadim Kavetsky presented most of the evidence for the Appellants. Mr. Kavetsky submitted a number of exhibits, including: Exhibit 4, an aerial photograph of the subdivision; Exhibit 5, a listing/proof of sale for 2068 Gibson Street; Exhibit 6, a listing/proof of sale for 2070 Gibson Street; and Exhibit 8, a package of 13 photographs of the neighbourhood surrounding the subject property showing ongoing construction.

19Mr. Kavetsky highlighted in his testimony the frustration of purchasing a new home and the number of mistakes made by the builder that required correction or completion, the number of complaints involving the Tarion warranty, and the discrepancies they have discovered such as variations in ceiling height and a door missing altogether. Mr. Kavetsky confirmed that the builder has worked with them over time to make the necessary repairs. However, the process has resulted in continued noise and interruption. The Appellants have been understandably frustrated.

20Mr. Kavetsky provided the Board with two comparable sales from his street: 2068 Gibson Street and 2070 Gibson Street. Both of these homes are two-storey brick homes sold in May and June, 2014, respectively, for $406,000. While the real estate listings are not precise, both homes would appear to be approximately 2,500 sq. ft. in size, with four bedrooms and three bathrooms, an attached garage, no air conditioning and lot sizes less than half the size of the subject property’s at 3,940 sq. ft. Neither home features a basement walk-out nor a finished basement such as is found at the subject property.

Analysis

21While the Board understands the disruption of continued construction around one’s home, the unfinished state of the subdivision at the time of assessment is not a factor for consideration in the resulting value of the property. This is because the construction phase is temporary, while the building is permanent and will continue to exist and to have value for the present owners and future purchasers regardless of the temporary state of the development of the neighbourhood. A willing buyer will be looking at the overall value of the entire property, including the building, and the location in a subdivision of similar homes is a factor which contributes to its value in this style of home.

22The current value of the property is best determined by comparing it objectively with similar homes in similar environments – in this case, subdivisions in the Town of Innisfil.

23While none of the comparable sales features an identical home on an identically-sized lot, the comparable sales properties establish a reasonable range of values. Adjustments are required for differences in the sizes of buildings and lots. None of the comparables offered by either party has as large a lot as the subject property, and only one of the comparable sales (1061 Booth Avenue) has any portion of finished basement – in that instance only 549 sq. ft. All of the comparable sales provided by both parties have attached garages, and all the examples provided by MPAC are larger than the subject property’s garage of 372 sq. ft. Both comparable sales provided by the Appellants, 2068 and 2070 Gibson Street, have attached double garages but no measurements were provided. None of the comparable sales offered by either party had a lot size more than two-thirds the size of the subject property’s lot, with the exception of 1061 Booth Avenue which had a lot 1,487.61 sq. ft. smaller than the subject property’s lot.

24The comparable properties provide a range of values which assists the Board in analyzing the current value of the subject property. The Board prefers sales that took place within one year of the valuation day, January 1, 2012. In this case, four of the six sales provided by MPAC fall within the desirable timeframe. They include:

(a) 2254 Dawson Crescent, sold in December, 2012, for $363,285 (time-adjusted using MPAC’s evidence respecting price changes over time);

(b) 1003 Nantyn Drive, sold in June, 2011 for $491,576 (time-adjusted);

(c) 1067 Nantyn Drive, sold in June, 2012 for $494,500;

(d) 896 Booth Avenue, sold in February, 2011 for $465,716 (time-adjusted).

25Unfortunately, the two examples provided by the Appellants were sold in 2014 and are too far removed from the valuation day to be of assistance. However, both these homes are inferior to the subject property due to smaller size, smaller lots, fewer bathrooms, no air conditioning, lack of a finished basement and lack of a basement walk-out. The current value of the subject property would have exceeded the values of these homes significantly because of these differences.

26While the 2011 sale of 2254 Dawson (Sale C provided by MPAC) took place for a markedly reduced amount in comparison to the value of the subject property, evidence by Mr. Parker disclosed that it was a builder’s sale, which is generally not accepted as an arm’s-length transaction. This property re-sold again in August, 2013, for $433,000 (MPAC’s Sale B). 2254 Dawson has a slightly smaller home, a much smaller lot, no finished basement, no walk-out and no proximity to green space as does the subject property. It is less valuable than the subject property.

27The Board finds, therefore, that none of the evidence adduced at hearing was sufficient to refute the current value assessed in the amount of $458,000.

Equity

28Once the Board has determined the current value of the land, it is required by s. 44.(3)(b) of the Act to:

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.

29Neither party introduced evidence relating to the assessed values of similar lands in the vicinity.

30The Board finds that, in the absence of evidence relating to the values at which similar lands in the vicinity have been assessed, the Board will not make an adjustment to the current value.

CONCLUSION

31The Board determines that the current value of the subject property is $458,000.

32The Board finds that 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)(a) of the Act in order to make it equitable with the assessed values of similar properties in the vicinity.

33Accordingly, the assessment of the subject property as at January 1, 2012, for the 2014 taxation year is confirmed at $458,000.

2015 DEEMED APPEAL

34An 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.

34Section 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.