Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: October 1, 2015

FILE NO.: WR 134886

Assessed Person(s): Christopher Hall and Sheila Hall

Appellant(s): Christopher Hall and Sheila Hall

Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 27

Respondent(s): Town of Lakeshore

Property Location(s): 1347 Colonial Cross

Municipality(ies): Town of Lakeshore

Roll Number(s): 3751-180-000-38090-0000

Appeal Number(s): 3106134

Taxation Year(s): 2015

Hearing Event No. 597632

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

Heard: September 22, 2015 in Windsor, Ontario

APPEARANCES:

Parties	Counsel⁺/Representative
Christopher Hall	Self-represented
MPAC	Robin Rivest
Town of Lakeshore	No one appeared

MEMORANDUM OF ORAL DECISION DELIVERED BY RICK LIMOGES ON SEPTEMBER 22, 2015

INTRODUCTION

1The homeowners have appealed their property assessment for the 2015 taxation year because of incurable or extremely expensive to cure issues with the newly constructed home which they recently purchased and occupied. The property value was returned at $295,000 in the Residential Property Classification (RT). Written Reasons were requested verbally by the Appellant following the oral decision of the Assessment Review Board (“Board”).

BACKGROUND

2The Appellants bought a home which was newly constructed by Brimar Homes Ltd. (Brimar) in Lakeshore at 1347 Colonial Cross and they occupied the residence in 2014. Since moving in, it has been recognized following repeated flooding, that the residence was improperly constructed. The Engineering Consultants hired by the Appellants found the building to be about 14 inches below the level required by the Ontario Building Code and lot grading plans. Notwithstanding the improper depth of the home, the Municipality allowed the construction to continue through each of their required inspection protocols without proper reference to the approved plans. They then issued a permit to occupy the residence, effectively expediting the closure of the offer to purchase and related transfer of money from the purchasers to the builder. MPAC have valued the property in relation to the sales of similar properties in the vicinity while ignoring the unique and financially devastating situation faced by these homeowners. The Appellants believe that the property should be valued at no more than the lot value prior to the botched construction.

DECISION

3The current value of the subject property as of January 1, 2012 for the 2015 taxation year is reduced from $295,000 to $48,000 in the Residential Tax Class (RT) with no further adjustment required to make it equitable with similar properties in the vicinity.

Case for MPAC

4Robin Rivest, Property Valuation Analyst for MPAC provided Exhibit 1, her valuation report for the subject property with a valuation of $295,000 as of January 1, 2012. In her analysis she examined six suggested comparable properties, three of which were superior to the subject, one which is said to be relatively comparable and two of which are said to be inferior. The sale price of the most comparable property was $295,000 whereas the others all sold for more. Although each of the homes that she analyzed was properly constructed and without residual issues, she concluded that the current value assessment of the subject property of $295,000 was reasonable.

Case for the Appellant

5Christopher Hall introduced Exhibit 2; a report by Meo & Associates Inc. Architectural & Engineering Consultants dated August 25, 2015. Among other issues, the report notes that the Grading Certificate which is required by the Municipality to check the depth of the basement excavation before any concrete footings are placed was prepared by surveyor William Van Loon and received by the Municipality on July 10, 2013. The Grading Certificate notes the basement excavation is 176.20 as compared to the proper grade of 177.70 and a depth of 1.4m (4.59’) from the finished grade to the bottom of the footing as compared to the permit drawings which required this dimension to be 1.143m (3.75’). If caught at this stage the error would have been corrected at minimal cost.

6The comprehensive consultant’s report on the situation facing the Appellants draws the following conclusions:

1. The house in its present condition does not meet the requirements of the Ontario Building Code.
2. The house does not meet the normal requirements of the Municipality or the conditions of the building permit.
3. The lot grading does not meet the specifications set out by the Consulting Engineer for the subdivision, Dillon Consulting.
4. Brimar Homes Ltd. did not comply with parts of: the OBC, the building permit drawings, the lot grade specifications.
5. Brimar did not take corrective action at the start of the project, when the excavation of the basement was noted as being too low by Van Loon.
6. The sump pump discharge piping must be reworked as per the Dillon details.
7. To resolve the infractions noted and to comply with the approved design, it will be necessary to raise the entire house to its proper elevation. This will require the entire reconstruction of the foundation walls or their reinforcement as determined by a structural engineer licensed in Ontario.
8. The magnitude of the work necessary affects the health and safety of the occupants, and will likely be unusable for inhabitation while the repair work is being carried out.

7Mr. Hall submitted numerous pictures detailing the flooding issues and the difficult living conditions created by these serious errors in the home’s construction. They are unable to grade or sod the lot as the required grade will cover parts of brick cladding, windows and doors. The basement continually floods and the improperly installed sump pumps run continuously until they burn out repeatedly. The builder is continuing to operate under another company name where he has reportedly closed out or stopped operating the company that built the subject house to avoid losses at litigation. Mr. Hall did not get an estimate of the cost to cure the problems since the entire matter is in litigation with the new house warrantee program blaming the builder and the municipality and the municipality pointing to the builder and the warrantee program. Mr. Hall also submits that he is morally unable to sell the subject property and in any event he must now disclose all of the outstanding issues and would therefore be unable to list the property for anywhere near it’s normal value. His lawyer is holding out hope that the builder should buy the property back although that may not be possible even if ordered by a court.

The Legislation

8The Board’s jurisdiction to make corrections to an assessment is found in the Assessment Act (“Act”).

9Section 19.(1) of the Act provides that the assessment of a property must be based upon its current value:

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) of the Act provides:

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 45 of the Act states:

45. Powers and functions of the Assessment Review Board. – Upon an appeal with respect to an assessment, the Assessment Review Board may review the assessment and, for the purposes of the review, has all the powers and functions of the assessment corporation in making an assessment, determination or decision under this Act, and any assessment, determination or decision made on review by the Assessment Review Board shall be deemed to be an assessment, determination or decision of the assessment corporation and has the same force and effect.

Board Deliberations

14The Board must have regard to the legislation, in particular, s. 19.(1) of the Act, which provides that the assessment of a property must be based on its current value. Current value is also defined for us in the Act as noted above.

15The first task is to find the correct current value as of January 1, 2012. MPAC’s evidence and investigation is appropriate for a properly constructed home without the subject property’s significant issues which relate directly to its marketability and current value. Its inflexible methodology and mass appraisal approach are of little value when dealing with such a unique situation and are thereby given little weight. The builder profited from the sale of this home since serious errors in the construction were not caught or discovered until after the building was sold and occupied. The Town is also clearly in error for not halting construction prior to the pouring of footings when the Grading Certificate noted the significant issue with the depth of the excavation. It is not known whether the surveyor made any extra effort to point out the flaw to the builder or to the Town but it was clearly noted on the Grading Certificate which the Municipality requires in order to avoid this very situation. The Town could have helped the home buyer prior to closing by properly carrying out their inspection responsibilities before issuing a permit to occupy the property, a signal to buyers and financial institutions that it is safe to allow the funds to flow. The only other safety net available through legislation that is designed to protect new home buyers is now disagreeing with the other parties over culpability, leaving the Appellants without recourse except to the courts.

16It could easily be argued that the subject property has a negative value, however the Appellants are satisfied that the best estimate of value was the portion of the value that reflects the empty building lot prior to construction. The Board has no better evidence of value before it in this hearing. It is clear that in fairness, the Municipality ought not to benefit from any increased assessment that resulted from their lack of proper building inspection and approval procedures until such time as the matters and apportionment of costs are dealt with by the courts.

CONCLUSION

17The current value of the subject property as of January 1, 2012 for the 2015 taxation year is reduced from $295,000 to $48,000 in the Residential Tax Class (RT) with no further adjustment required to make it equitable with similar properties in the vicinity.

Footnotes

1. 1Subsection 5 permits the Minister to prescribe a different valuation day. A different day has not been prescribed.