Crosbie v. Municipal Property Assessment Corporation, 2015 CanLII 72780

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: November 2, 2015

FILE NO.: WR 134537

Assessed Person(s): Robert Edward Crosbie

Appellant(s): Robert Edward Crosbie

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

Respondent(s): Township of Uxbridge

Property Location(s): 35 Deer Ridge Road

Municipality(ies): Township Uxbridge

Roll Number(s): 1829-010-002-11564-0000

Appeal Number(s): 3062944, 3105933, 3106766 and 3106767

Taxation Year(s): 2013, 2014 and 2015

Hearing Event No.: 597129

Legislative Authority: Sections 33 and 40 of the Assessment Act, R.S.O. 1990, c. A.31, as amended

Heard: August 24, 2015 in Uxbridge, Ontario

APPEARANCES:

Parties	Counsel+/Representative
Robert Edward Crosbie	Olga Leyenson
MPAC	Carl Goodrich
Township of Uxbridge	No one appeared

DECISION OF THE BOARD DELIVERED BY GARRY MINNIE

ISSUE

1Is the assessment as returned, $262,000 for the land and $858,000 for the structure for the 2013 taxation year, and $1,120,000 for the 2014 and 2015 taxation years accurate, and are these assessments equitable with assessment in the vicinity.

DECISION

2For the 2013 taxation year, the land assessment is confirmed at $262,000 and the assessment of the structure is reduced from $858,000 to $711,000.

3For the 2014 taxation year the assessment is reduced from $1,120,000 to $973,000.

4For the 2015 taxation year the assessment is reduced from $1,120,000 to $973,000.

5These assessments are found to be equitable with assessment in the vicinity.

OVERVIEW

6The subject property consists of a single-family detached residence of 4,593 square feet (“sq. ft.”) on a 1.06 acre lot located in the hamlet of Goodwood in the Township of Uxbridge.

7MPAC’s Property Profile indicates that the one-storey house was built in 2012 and features forced air heating, a full 4,593 sq. ft., finished basement with an 8 foot ceiling, and an attached garage of 1,154 sq. ft.

8The critical issue before the Assessment Review Board (“Board”) is the degree to which the recently built residence is complete.

9MPAC values the house, if completed, at $1,400,000 and claims that the returned assessment of $1,120,000 is 20% below its actual value, which is an acknowledgement of “the unfinished nature of the dwelling.”

10MPAC considers a further reduced and recommended assessment of $973,000 for all three years, 2013, 2014 and 2015 to be reasonable.

11Mr. Crosbie (the “Appellant”), acknowledges that $1,400,000 could be the value of the property if the residence were fully finished.

12He further claims that the house is 70% completed now (2015), and that since 70% of $1,400,000 is $980,000, a current value of $973,000 is reasonable for 2015.

13However, the Appellant contends that in 2014 the house was only 60% complete, and therefore a current value of $840,000 would be more accurate, while in 2013 the house was only 40% complete and therefore $560,000 should be the value of the property, with the lot included.

14The parties agree that the lot by itself should be valued at $262,000.

15Furthermore, the Appellant contends that a neighbouring property at 43 Deer Ridge Road was assessed at $717,000 for the 2015 taxation year, and that in the interests of Equity, MPAC should consider this.

LEGISLATION

16In determining the assessment, the Board is governed by the following sections of the Assessment Act (“Act”).

17Section 19.(1) of the Act directs that:

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

18Section 1 of the Act defines current value as:

“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.

19Section 19.2(1) 3 of the Act directs that:

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:

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

20Section 44.(3) of the Act directs that the Board have reference to the value at which similar lands in the vicinity are assessed:

44.(3) Same, 2009 and subsequent years. - For 2009 and 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.

21The Board is required by the legislation to use the best evidence available to determine the current value of the property.

22Then the Board is required by the legislation to lower the assessment of the subject property if the assessment is not equitable with that of similar properties in the vicinity.

ANALYSIS

Current Value

23Both parties submitted data on the sale and/or listing of neighbouring properties, all located on Deer Ridge Road.

24MPAC submitted four sales and the Appellant’s two sales and one Real Estate listing, with one of the sales being the same as one used by MPAC.

25Since the Appellant concurred in the hearing with MPAC’s determination that the subject property would be worth $1,400,000 if the residence were completed, the Board finds it unnecessary to go into a detailed analysis of the sales evidence submitted by the parties, as the parties already agree on the value of the property, if the house were completed.

26The real issue before the Board is the degree to which the residence is and/or was complete for the three taxation years in question.

27Both parties acknowledge that the residence is not completed, but they do not agree on what impact this should have on the assessment, in particular as it applies over the three year period.

28The Appellant’s position is that the residence is only 70% completed now, and that is why he is willing to accept $973,000 as a fair assessment for 2015.

29However, he claims that in 2013, the residence was only 60% completed, and in 2012 it was only 40% completed.

30His counsel led him through a long list of items that are not yet finished:

• heating system;
• plumbing system;
• duct work;
• stairs to the basement;
• basement itself; and
• landscaping.

31Counsel further submitted a copy of a “Building Inspectors Daily Report” dated November 25, 2013 which listed a number of items that needed installation or completion leading to the granting of a Temporary Occupancy Permit.

32These items included such matters as handrails on stairs, smoke and C/O detectors, and fire seals in the basement.

33Mr. Crosbie confirmed that his occupancy permit is still “temporary” in 2015.

34He explained that in 2013 the residence was only occupied for the last half of the year, because with only fireplace heating the pipes would freeze in the winter.

35With electric heating installed the house was lived in year-round in 2014.

36The geo-thermal heating planned for the house has still not been put into use because of problems with the holes.

37Under questioned Mr. Crosbie explained that the delays in completing the residence stemmed from problems with various trades such as framers, electricians and plumbers that involved theft and the site superintendent and which resulted in legal undertakings.

38His contention is that it will cost a further $395,000 to finish the residence.

39Mr. Goodrich took issue with a number of these contentions.

40He pointed out that the basement is not assessed as being finished, although Mr. Crosbie maintained that nevertheless it required a C/O detector.

41He challenged Mr. Crosbie on how he knew that it would cost $395,000 to finish the residence when he has no written estimates to support this claim for “cost to cure.”

42He further pointed out that the assessment on the house for 2013 is under s. 33 of the Act, not s. 34.

43This means that it is an “omitted” assessment, not a “supplementary” assessment.

44His point was that the assessment is for the whole taxation year of 2013, and that whether the house is occupied or not is of no consequence, just as a cottage is assessed for the whole year, regardless of the number of days that it is occupied.

45He pointed out that many of the items listed as lacking in the residence such as handrails and C/O detectors could be considered “minor” items.

46Nevertheless, MPAC is prepared to give a 20% negative adjustment over the three years to account for the unfinished state of the residence.

47Mr. Goodrich’s position is that since the property would be worth $1,400,000 if the house were completed, the returned assessment of $1,120,000 represents a 20% adjustment for its unfinished status.

48Consequently, $973,000 for the three taxation years is a fair assessment for the property.

49The Board agrees with the Assessor.

50There is no concrete evidence before the Board to support any of the specific percentages put before the Board as to the degree to which the residence is complete or incomplete.

51What is clear is that the house in not finished.

52What is also clear is that the house has been lived in beginning in 2013.

53The Board appreciates the Appellant’s contention that the house is not fully finished and that it has been a “work in progress”, and that it is more complete with each successive year.

54However, the Board is not convinced of the accuracy of the 40 and 60 and 70 per cent figures that the Appellant proposes for the degree of completeness for the three successive years. There simply is not enough concrete evidence to support these figures. They are in fact only the Appellant’s opinion as to the degree to which the residence is complete. Nor is there any third party or objective evidence to support his estimate of $395,000 needed to complete the residence.

55Under questioning by the Assessor, he explained that he has bought and sold four houses and that his friend is part of the Real Estate Board.

56This experience may make him an informed buyer and seller, but the Board is not convinced that this qualifies him to make the afore-mentioned determinations. His figures are only estimates.

57Likewise, MPAC’s position that a 20% negative adjustment over three years is not a precise determination of the degree of “completeness” at any particular time, but rather is a reduction aimed at fairness that acknowledges that the residence is not fully finished.

58The Board finds this reasonable.

EQUITY

59The Appellant put forth the $717,000 assessment of a neighbouring property as evidence that in the interest of equity the subject property should be assessed lower than what MPAC is recommending.

60The evidence submitted showed an assessed value on January 1, 2012 as $717,000 with a phased in value of $694,817 for the 2015 taxation year.

61This property at 43 Deer Ridge Road is indeed one of MPAC’s sale properties used in their Market Analysis for current value.

62At 1.01 acres it has a similarly size lot as the 1.06 subject lot and its residence has a building Quality rating of 8, the same as the subject residence, making them the only two in the Market Analysis with such a high rating, with the others all being Quality 7.

63At 2,410 sq. ft., the house is much smaller than the 4,593 sq. ft., subject house, but it does have a finished basement.

64Despite Mr. Goodrich’s contention that the $717,000 assessment of this property is incorrect and that MPAC will be correcting its assessment next year, counsel for the Appellant insisted that what MPAC does with that property’s assessment “is their business” but the fact is 43 Deer Ridge Road was assessed much lower than the $973,000 that MPAC is recommending for the subject property.

65For MPAC, Mr. Goodrich presented an Equity Analysis based on the sales of 30 residential properties located “within 3.56 kilometres of the subject property”, with the sales occurring between June 2010 and December 2012.

66Using time-adjusted sales this study found a median Assessment to Sales Ratio (“ASR”) of 0.94 for the vicinity.

67Mr. Goodrich contended that since the current value of the property is $1,120,000 after applying a 20% negative adjustment for it not having a completed residence, the recommended assessment of $973,000 shows a far greater reduction than the 6% that might be suggested by the median ASR for the vicinity.

68The Board finds the position on equity taken by MPAC more convincing than that taken by the Appellant.

69The Appellant’s argument is based on the assessment of a single neighbouring property.

70Aside from the issues of whether this property’s attributes make it useful for comparing its assessment with the subject property’s assessment and of whether its assessment in 2012 was accurate or not, the Board finds that one property is not sufficient to establish a pattern or level of assessment for a vicinity.

71A far wider sample base is required.

72Such a sample base is used in MPAC’s Equity Study, which looks at the assessment of 30 property’s in the vicinity that sold in the years leading up to the valuation date of January 01, 2012.

73This study found that properties in the vicinity were generally assessed at 94% of their time-adjusted selling values.

74The Board prefers this evidence to that based on the assessment of a single property in the neighbourhood.

75How does this apply to the subject property’s assessment?

76Clearly, at $973,000, the subject property is assessed far below its current value.

77Using the $1,120,000 current value for the property, a value that reflects a 20% adjustment for the unfinished status of the residence, an assessment of $973,000 is 13% below the current value.

78If one compares the recommended assessment of $973,000 to the agreed upon value of the property if the residence were completed, that is, $1,400,000, the difference is 30%.

79The Board is more than satisfied that this difference of 30% between the recommended assessment and the current value of the property with a completed residence is great enough to account for both the unfinished status of the residence over the three year period as well an under-assessment for the vicinity of 6%.

80The Board finds no reason to lower the assessment below $973,000 in the interests of equity.

CONCLUSION

81The Board confirms the assessment of the land at $262,000 for the 2013 taxation year.

82The Board reduces the assessment of the structure from $858,000 to $711,000 for the 2013 taxation year.

83The Board reduces the assessments of the entire property from $1,120,000 to $973,000 for the 2014 and 2015 taxation years.

84These assessments are found to be equitable under s. 44(3) of the Act.

Footnotes

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