Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: October 9, 2015

FILE NO.: WR 130693

Assessed Person(s): Janice Anne Maude

Appellant(s): Janice Anne Maude and Greg Maude

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

Respondent(s): Township of Havelock-Belmont-Methuen

Property Location(s): 132-121 Kasshabog

Municipality(ies): Township of Havelock-Belmont-Methuen

Roll Number(s): 1531-010-009-40600-0000

Appeal Number(s): 2986825, 3018990 and 3073583 (deemed 2015)

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

Hearing Event No. 574962

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

Heard: February 10, 2015 in Selwyn, Ontario

APPEARANCES:

Parties	Counsel+/Representative
Janice Anne Maude and Greg Maude	Self-represented
MPAC	Rebecca Bolton
Township of Havelock-Belmont-Methuen	No one appeared

DECISION OF THE BOARD DELIVERED BY ROBERT TCHEGUS

ISSUE

1Is the assessment of the subject property correct at $318,000 for the 2013 and 2014 taxation years? Is the assessment equitable when compared with the assessments of similar properties in the vicinity?

DECISION

2The Assessment Review Board (“Board”) is required by the Assessment Act (“Act”) to do two things:

1. Section 44.(3)(a) requires the Board to “…determine the current value of the land.” The Board finds that the current value of the subject property, as of the legislated valuation day, January 1, 2012 is $318,000.

2. Section 44.(3)(b) requires the Board to “…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 is such adjustments would result in a reduction of the assessment of the land.” Having reference to the value at which similar lands in the vicinity are assessed, the Board finds that it is necessary to reduce the assessment to $233,000 to make it equitable with the assessments of similar lands in the vicinity.

3The assessment value for the subject property is reduced from $318,000 to $233,000 for the 2013, 2014 and deemed 2015 taxation years.

REASONS FOR DECISION

The Subject Property

4The subject property is Island 132 in Kasshabog Lake. The property has a frontage of 355 feet, a depth of 208 feet and area of 1.70 acres. It is developed with a seasonal recreation “cottage” built in 1955, with a 2007 addition. There is a septic system for the one-storey cottage, which has an area of 898 square feet (sq. ft.) with no basement. MPAC has assigned it a 4.5 or “average” quality rating for the purposes of its multiple regression model used to determine current value. There are two bedrooms, one full bathroom and electric baseboard heat. There is also a 166 sq. ft. boat house built in 1955 and a 223 sq. ft. cabin/lean-to.

Position of MPAC

5Rebecca Bolton appeared on behalf of MPAC and testified that the current value for the property has been determined by a direct sales comparison approach. The sales comparison approach is one of the three valid approaches to value used by appraisers and assessors to value real estate. She said that direct comparison is the most common approach applied to develop estimates of value for residential property – including condominiums, recreational waterfront and vacant residential land.

6Ms. Bolton provided evidence regarding the sales of three comparable properties, two on Kasshabog Lake and one on Jack Lake. All three properties sold in May of 2010. Ms. Bolton testified that she reviewed the sales of 490 properties from the neighbourhood of the subject property and from adjacent neighbourhoods for the period between December 2008 and December 2012 to conclude that prices increased approximately 15.42% over this time-frame. She calculated and applied time adjustment factors (“TAFs”) to her sale comparisons to ensure that the sales reflected the market conditions of January 1, 2012. Table 1 in the Price Changes over Time section of her documents provides the month-by-month TAFs that she calculated.

7Ms. Bolton’s market sales analysis and time adjusted sale prices is summarized in the following chart:

Property	Subject 132 Island 21 Kasshabog	457 Island 38 Kasshabog	531 Island 16 Jack	128 Island Kasshabog
Sale Amount		$290,000	$320,000	$316,500
Sale Date		2010/05	2010/05	2010/05
Time Adjusted Sale Amount		$280,356	$309,358	$305,974
Effective Frontage	355 feet	90 feet	170 feet	285 feet
Effective Depth	208 feet	242 feet	207 feet	207 feet
Effective Site Area	1.70 acres	0.47 acres	0.81 acres	1.35 acres
Structure	Single Family Detached	Single Family Detached	Single Family Detached	Single Family Detached
Year Built	1955	1956	1957	1960
Quality Class	4.5	4.5	4.5	4.5
Renovation/Addition Year	2007
Central Air	No	No	No	No
Heat Type	Electric	None	Electric	Forced Air
Fireplaces	0	0	1	0
Full Bathrooms	1	0	1	0
Half Bathrooms	0	1	0	1
Full Storeys	1	1	1	1
Part Storeys	0	0	¼	0
Bedrooms	2	3	2	3
Total Building Area	898 sq. ft.	793 sq. ft.	972 sq. ft.	700 sq. ft.
Secondary Structures	-Boathouse -Cabin	-Boathouse	-Boathouse
Comparable		Inferior	Inferior	Inferior

8Although all three sales have structures that are relatively similar, the frontages and lot sizes on the sales are smaller than the subject. Ms. Bolton testified that the current value of the subject property is determined by her to be higher than the time adjusted sale amounts for all three sales. On the basis of her analysis, the current value assessment of the subject property at $318,000 is reasonable and correct.

9To address equity and s. 44.(3)(b) of the Act, Ms. Bolton referred the Board to an Equity Analysis that calculated the assessment to sales ratio (“ASR”) derived from 29 sales of residential properties within 3.75 kilometres of the subject property between December 2008 and December 2012. She advised that all of the sales were properties on Kasshabog Lake. All the sales she tested were typical, arms-length transactions between willing buyers and willing sellers for residential properties. In this regard, she said that if MPAC’s method of valuing residential properties is achieving equity, the average ASR should fall within 0.95 and 1.05. She confirmed a median ASR of 0.98 has been achieved.

10Ms. Bolton also advised that equity among individual properties is measured through the Coefficient of Dispersion (“COD”). The COD measures the average percentage deviation of all of the individual ratios from the median ratio. For residential properties, MPAC allows a maximum COD of 15%. It is 20% for commercial properties, 25% for vacant properties and 20% for seasonal recreational properties. In this instance the COD is 13.1%. From her analysis, Ms. Bolton is of the opinion that similar properties are being assessed at their current values and that no equity adjustment is required.

The Position of the Appellant

11Janice and Greg Maude originally had issues with the incorrect data that MPAC had for their property and continue to have difficulties with portions of Ms. Bolton’s report. They pointed out that the cottage was constructed with second hand materials by Mrs. Maude’s father in 1955. The 2007 addition was a family project to allow the Maude’s to have side tables in their bedroom and to add an uninsulated sunroom. It too was completed on a shoestring budget. The cottage can only be used for three seasons.

12The Maudes submit that MPAC’s perceived 15.4% increase in values is derived from sales that took place on lakes such as Stoney and Dummer. Their evidence is that these lakes have much higher land values than the subject with cottages worth in excess of $1 million and full-time residences. Even Jack Lake, they point out has boat access to Apsley and stores including an LCBO. They submit that while Kasshabog Lake may be changing it can’t yet be compared to other lakes used by MPAC. As a sign of the current times, Mr. Maude testified that the only commercial marina on the lake has closed its doors.

13The Maudes do not accept the three properties used in MPAC’s sales analysis to be comparable properties. One is on a completely different lake and the one on Kasshabog Lake closest to their property is a full-time dwelling. Mr. Maude testified that extensive renovations took place to the third comparable prior to the sale. Ms. Bolton confirmed that she had not personally inspected that property and the Maudes evidence is that the property is superior and not inferior to their property.

14The Maudes explained one of their biggest concerns is the increased operations of the Unimin Mines sites in Havelock-Belmont-Methuen Township and the poor air quality from dust emissions through the tailing ponds at the mines. One of the mines is directly across the lake from their property. The mines are one of the few in the world that produce nepheline syenite which is used in the glazing of ceramics, paint fillers, powder coatings and is an additive to toothpaste. The Maudes have seen the dust on the ground and heard the noise. Mr. Maude submits that no environmental factors arising from the mines have been considered by MPAC in its valuation analysis.

15The Maudes’ Exhibit included letters from the Peterborough County-City Health Unit to the residents of Bottle Lake and Kasshabog Lake dated August 31, 2012, April 24, 2013 and May 16, 2013, providing health warnings because of the dust off the Nephton tailings. Mr. Maude testified that the mines are in operation 24 hours a day seven days a week notwithstanding environmental charges having been filed. Mr. Maude said the noise and dust concerns have become active environmental issues for the local Lake Kasshabog Cottage Association. The Maudes do not believe that any of these environmental issues have been considered by MPAC and its assessment analysis of their property. They submit that this issue should be considered for assessment relief, similar to a property in proximity to a railroad track or an industrial property that produces a negative property effect.

16The Maudes submitted evidence concerning the assessed values of nine island properties on Kassabog Lake that they considered both similar and in the immediate vicinity. That evidence is summarized as follows:

Property	Area (Acres)	Year Built	Cottage Size	Assessed Value
Subject Property	1.70	1955	898 sq. ft.	$318,000
1. Island 4 - 3 Kosshabog	1.07	1946	732 sq. ft.	$229,000
2. Island 22 - 8 Kosshabog	1.26	1965	875 sq. ft.	$243,000
3. Island 28 - 8 Kosshabog	1.14	1958	604 sq. ft.	$221,000
4. 294 Kosshabog WAO	1.25	1955	919 sq. ft.	$258,0001
5. Island 105 - 15 Kosshabog	1.22	1958	680 sq. ft.	$206,000
6. Island 280 - 33 Kosshabog	1.82	2008	878 sq. ft.	$218,000
7. Island 407 – 38 Kosshabog	1.03	1953	1,069 sq. ft.	$230,000
8. Island 635 – 38 Kosshabog	1.50	1958	1,150 sq. ft.	$265,000
9. Island 640 – 38 Kosshabog	1.00	1952	848 sq. ft.	$213,000

17Mr. Maude submitted that the average value of these assessments is $231,444, well below the assessed value of the subject property. While Ms. Bolton agreed that, with the exception of Property 6, the properties that Mr. Maude chose for comparison are fairly similar to the subject property, she submitted that Mr. Maude did not provide effective frontage information, which could indicate whether negative values have been attributed by MPAC’s valuation model. She suggested that value reductions would be assigned to a property with weedy frontage or one that has frontage on a bay and without that information, Mr. Maude’s conclusion could be incorrect.

Relevant Legislation

18For the 2013 and 2014 taxation years, in determining the value at which land shall be assessed, the Board must have regard to the following provisions of the Act:

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

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

20Section 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.

21Section 19.2(1) 2 of the Act states:

19.2(1) Valuation days. – Subject to subsection (5)², 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.

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.

23Section 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.

24Section 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.

The Board’s Analysis – Burden of Proof

25The burden ascribed in s. 40.(17) is for MPAC to satisfy the Board that the assessment is at current value. If it does so, then the onus shifts to the Appellant to provide evidence to show either that the current value is not correct or that the assessment is not equitable when compared with the assessments of similar lands in the vicinity. The Board reviewed MPAC’s evidence and finds that for the reasons provided below, MPAC has satisfied the burden of proof referred to in s. 40.(17) of the Act.

The Board’s Deliberations

The Current Value of the Land

26The best evidence that the Board can receive of current value is an arm’s length and market-tested sale of the subject property at or near the valuation day, being January 1, 2012, for the 2013, 2014 and deemed 2015 taxation years.

27If, as in this case, no such transaction has taken place, the Board looks to sales of comparable properties in the vicinity to determine if the sales evidence suggests that a current value requires correction.

28With respect to the nuisance issues raised by the Maudes, Ms. Bolton referred to Kenney v. Municipal Property Assessment Corp., Region No. 5 ; [2012] O.A.R.B.D. No. 78; 71 O.M.B.R. 161. In that Board decision, the Appellants argued that MPAC did not take into account the effect on the current value of the Appellant’s property arising from the wind turbines constructed by the Wolfe Island Wind Project. In that decision, the Board was unable to conclude from the sales data provided by MPAC that sale values of properties in proximity of abutting wind turbines are always negatively affected. While the Board agrees that the concerns raised by the Appellants are very serious, no evidence was provided to confirm that the mine in proximity to the subject property has, as of yet, had any effect of the sales values of properties in proximity of the mine.

29MPAC provided sales evidence of what it submitted were three inferior properties. The Appellant provided no sales evidence, and challenged that of MPAC’s. The Board is of the opinion that MPAC’s evidence held up as being reasonable and the Board accepts it as correct. The Board therefore confirms that the current value of the subject property is $318,000 for the 2013 and 1014 taxation years.

Section 44.(3)(b) – Equity

30Systems of mass appraisal do not generate accurate current values for every property. A comparison of Assessment to Sales Ratios (ASRs) permits the Board to compare assessed values as determined by MPAC with the values achieved in the marketplace. A median ASR of less than 1.00, arrived at by comparing a number of sales, would indicate that MPAC may be producing values less than the values demonstrated in the marketplace. A median ASR greater than 1.00, again using a number of sales, indicates that MPAC may be producing values greater than those demonstrated in the marketplace. In this instance, the median ASR is 0.98 suggesting that MPAC is producing values at or very close to actual market values.

31ASR analysis is a tool and is not necessarily determinative. The Board appreciates the efforts undertaken by the Maudes in their equity analysis, and the results of their findings being that all nine of their comparable properties were all assessed well below the current value of the subject property.

32Even Ms. Bolton conceded that all but one of the Maudes’ properties used for comparison purposes were similar to the subject property. Removing the property with the cottage constructed in 2008, the average assessed value of the remaining eight properties is $233,125 or $233,000 rounded. Therefore, having regard to the assessments of similar lands in the vicinity, the Board finds it necessary to reduce the assessment of the subject property to $233,000 to make the assessment of the subject property equitable with those assessed values.

2015 DEEMED APPEAL

33An 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.

Footnotes

1. 1Mr. Maude testified this property is on a peninsula and has mainland access as a result of a newly constructed road, if the owner wishes to buy in.
2. 2Subsection 5 permits the Minister to prescribe a different valuation day. A different day has not been prescribed.