Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: September 30, 2015

FILE NO.: WR 131489

Assessed Person(s): Gwendolyn Taylor

Appellant(s): Gwendolyn Taylor

Respondent(s): Scugog Township

Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 13

Property Location(s): 171 Shanly Street, Unit 103

Municipality(ies): Scugog Township

Roll Number(s): 1820-020-010-00484-0000

Appeal Number(s): 2998770, 3019743 and 3080209 (deemed 2015)

Taxation Year(s): 2013, 2014 (and deemed 2015)

Hearing Event No. 580744

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

Heard: March 16, 2015 in Port Perry, Ontario

APPEARANCES:

Parties	Counsel+/Representative
Gwendolyn Taylor	Roman Andrzejewski
MPAC	Carl Goodrich
Scugog Township	Connie Stewart

DECISION OF THE BOARD DELIVERED BY CRISTINA MARQUES

INTRODUCTION

1The subject property is a residential condominium unit constructed in 2009 facing Lake Scugog. This first floor 1,080 square foot corner unit has a walkout terrace with water view. MPAC’s evidence is that it’s multiple regression model values the terrace at $10,716, and that its valuation model also includes a 7% upward adjustment to account for the value added by virtue of the property being a corner unit with a walkout terrace.

2The subject property is assessed by the direct sales comparison approach. For taxation years 2013 and 2014 the assessment was returned pursuant to the Assessment Act (“Act”) at $372,000.

3The Assessment Review Board (“Board”) in accordance with s. 44.(3) of the Act must determine if the assessment for 2013 and 2014 taxation years reflects current value as of the legislated valuation day, January 1, 2012, and if an assessment at current value is equitable, having reference to the assessments of similar lands in the vicinity.

DECISION

4The Board finds the current value of the subject property is $372,000. The Board also finds that an assessment at current value is equitable, having reference to the assessments of similar lands in the vicinity, and no reduction is necessary.

Legislation

5For the 2013 and 2014 taxation years, in determining the value at which land shall be assessed, the Board must consider the following provisions of the Act:

6Section 1 of the Act defines "current value" as follows:

“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.

7Section 19.(1) of the Act states:

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

8Section 19.2(1) 2 of the Act states:

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.

9Section 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.

10Section 40.(17) of the Act states:

40.(17) Burden of proof. – For 2009 and subsequent taxation years, where value is a ground of appeal, the burden of proof as to the correctness of the current value of the land rests with the assessment corporation.

11Section 40.(19) of the Act states:

40.(19) Board to make determination. – After hearing the evidence and the submissions of the parties, the Board shall determine the matter.

Determination of Current Value

Case for MPAC

12Carl Goodrich, appearing for MPAC, testified that the subject property is located in downtown Port Perry close to all amenities and facing Lake Scugog.

13In support of the assessment as returned MPAC relies on Exhibit 1 consisting of an MPAC report which include a location and current value study map, a current value study with the subject property and three comparable sales, a time adjustment factors table, a sales for price changes over time schedule, and an equity analysis study.

14Details of each property on Current Value Study are summarized in Table 1:

Table 1

Sale	Address	Assessment	Sale Date	Sale/ Adjusted Sale ($)	Unit Size (sq. ft.)	Year Built
Subject Property	103 –171 Shanly Street	372,000	Nov. 2010	$342,000/ 353,286	1,080	2009
Sale A	109 –171 Shanly Street	372,000	Aug. 2010	399,000/ 415,293	1,080	2009
Sale B	303 –171 Shanly Street	361,000	Aug. 2010	389,000/ 404,885	1,080	2009
Sale C	509 –171 Shanly Street	375,000	July 2012	409,000/ 402,775	1,080	2009

15The assessor stated that the three suggested comparables are located in the same complex as the subject property. His evidence is that they are identical to the subject property, because they have the same building size, all face the lake, and that all are corner units. He submits that for these reasons these sales accurately reflect the value of the subject property. Mr. Goodrich gave details on MPAC’s analysis of sales of the suggested comparables that took place between January 2010 and December 2012, and stated that the area experienced an overall decrease of 8.81% in the real estate market. Time adjustment factors for each month during the study period were provided together with the data for the 220 sales analyzed. He submitted that the time adjusted sales price for the three suggested comparables is between $402,775 and $415,293 and that the subject property’s assessment as returned at $372,000, shows that it is undervalued, and that no adjustment to current value is required.

Case for the Appellant

16Mr. Andrzejewski submitted Exhibit 2 consisting of a booklet containing his arguments, and a list of six comparable properties. Details of each of the suggested comparable properties are summarized in Table 2:

Table 2

Sale	Roll Number	Assessment	Sale Date	Sale/ Adjusted Sale ($)	Unit Size (sq. ft.)	Year Built
Sale 1	182002001000483	n/a	July 2012	328,000/ 316,000	1,100	2009
Sale 2	182002001000493	n/a	July 2011	361,000/ 319,000	1,080	2009
Sale 3	182002001000488	337,000	May 2012	345,000/ 336,000	1,085	2009
Sale 4	182002001000492	331,000	Sept. 2011	327,500/ 332,000	1,100	2009
Sale 5	182002001000494	327,000	April 2012	327,946/ 321,000	1,085	2009
Sale 6	182002001000498	327,000	Aug. 2011	327,946/ 334,000	1,085	2009

Average $299 per sq. ft. of building

17Mr. Andrzejewski testified that the suggested comparables, units located in the same complex as the subject property, have an average sale price of $299 per sq. ft. of building, and that it is evidence supporting a current value assessment for the subject property of ($299 x 1,080 ) $323,000.

18During his cross-examination of Mr. Andrzejewski Mr. Goodrich pointed out that all of the suggested comparables presented by the Appellant are not similar to the subject property because they have street views and are not corner units. He suggested that because of these differences they have a different marketability. This statement was not disputed by Mr. Andrzejewski.

19The Board rejects the Appellant’s suggested comparables because by Mr. Andrzejewski’s own admission these properties although located in the same complex as the subject property are different because they are not corner units and because they do not face the lake. Mr. Andrzejewski conceded that these properties have a significantly different market than the corner properties facing the lake such as the subject property.

Board’s Analysis of Current Value

20The best indicator of current value is an arm’s length and market-tested sale of the subject property on the valuation date, January 1, 2012, or close to it. In this case the sale of the subject property only occurred in November 2010. The Board rejects the MPAC’s sale A and B because the sales took place in August of 2010 dates too far removed from the valuation day, January 1, 2012, to be a valid indicator of current value. For the same reason the Board also rejects the November 2010 sale of the subject property.

21The second best indicator of current value is the sale of similar properties in the vicinity on or close to valuation day. The best evidence is found in MPAC’s sale C . The property is almost identical to the subject property, in building size, quality and age. The Board will adjust for the terrace as follows:

• Sale C Time Adjusted Sale $402,775

• $10,716 (terrace) $413,491

22The sales prices for all of the Board accepted comparable property, adjusted for time and differences, have an average sale of $382.86 per sq. ft. Because the assessment for the subject property is $ 344.44 per sq. ft., the Board is satisfied that MPAC’s methodology, if anything has resulted in a lower current value than what the market is producing in the vicinity.

23The Board finds that the assessment as returned at $372,000 reflects current value.

Equity Analysis

24Section 44.(3)(b) directs that after determining current value, the Board shall have reference to the value at which similar lands in the vicinity are assessed. The Assessment to Sales Ratio (“ASR”) is determined by dividing the assessment as returned with the time adjusted sale price an ASR falling below 1.0 is an indication that MPAC’s valuation methodology may be resulting in assessments below values determined in the market place. Conversely, an ASR falling above 1.0 is an indication that MPAC’s valuation methodology may be resulting in assessments above values determined in the market place.

25MPAC relied on the sales of 29 properties to determine whether properties are assessed at or close to their current values, as listed in the Equity analysis of Exhibit 1. The median ASR for the sold properties is 1.03, which is within MPAC’s acceptable range of ASRs between 0.95 -1.05.

26Mr. Andrzejewski provided the Board with a study of four properties located in the same complex as the subject property. He suggested that an equity adjustment should be made reducing the assessment to $328,000 based on the average assessment per sq. ft. of these four properties. The Board rejects this submission, the fact the properties have been assessed at less per sq. ft. than the subject property does not show that the subject property has been inequitably assessed.

27The nine sales in the same complex as the subject property have a median ASR of 1 an indication that MPAC is achieving values similar to those determined in the marketplace, and not very different from the results as found in MPAC’s equity analysis, and no equitable adjustment is warranted.

CONCLUSION

28The assessment is confirmed at $372,000 for the 2013 and 2014 taxation years.

2015 DEEMED APPEAL

29An 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.

30Section 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.

Footnotes

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