Assessment Review Board

Commission de révision de l'évaluation foncière

ISSUE DATE: December 3, 2015

FILE NO.: WR 135536

Assessed Person(s): M & M Holding Co. Ltd.

Appellant(s): M & M Holding Co. Ltd.

Respondent(s): Municipal Property Assessment Corporation ("MPAC") Region 28

Respondent(s): City of North Bay

Property Location(s): 34-624 Lakeshore Drive

Municipality(ies): City of North Bay

Roll Number(s): 4844-040-059-33434-0000

Appeal Number(s): 3046875 and 3121227 (deemed 2015)

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

Hearing Event No. 597850

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

Heard: September 30, 2015 in North Bay, Ontario

APPEARANCES:

Parties	Representative
M & M Holding Co. Ltd.	Glenn Martin
MPAC	J. Hyatt
City of North Bay	L. Beaulieu

DECISION OF THE BOARD DELIVERED BY NICOLL PLUMSTEAD

ISSUE

1John Hyatt appeared on behalf of MPAC. There is a s. 40 appeal for 2014 and a s. 40 deemed appeal for 2015. The assessment was returned at $224,000 for both taxation years. For 2014, s. 39.1 Minutes of Settlement ("MOS") in the amount of $220,000 were offered and rejected. The "same recommendation" was carried forward for 2015 with an increase of $4,000 to reflect both a data correction to the finished portion of the basement area and central air conditioning which was added after the property's June 2013 purchase by the Appellant (Exhibit 1, p. 1). MPAC is defending a value of $220,000 for 2014 and $224,000 for 2015.

2Mr. Hyatt describes the subject property as "a row house-type condominium." Glenn Martin, representing Assessed Person/Appellant M & M Holding Co. Ltd., testifies that his company purchased the residential condominium as an investment property in June 2013, and that the unit had a "tired appearance, given nothing had been renovated since its 1987 construction," still having, for example, "the original builder's kitchen and windows" (Exhibit 2, Tab1, p. 4). Mr. Martin testified that his purchase price of $212,000 was based on the May 2013 $200,000 sale of the very similar Unit 35 adjoining the subject Unit 34, to which he had added adjustments of $12,000. He seeks a value of $205,000, based on adjustments he has made to both MPAC's and his own suggested comparable properties.

3Lisa Beaulieu appeared for the City of North Bay as an observer, and did not make submissions on its behalf.

4The Assessment Review Board ("Board") must determine whether MPAC's 2014 and 2015 values of $220,000 and $224,000 respectively reflect the correct current value of the subject property as of the legislated valuation day of January 1, 2012, and whether the property is equitably assessed vis-à-vis the assessments of similar lands in the vicinity.

DECISION

5In determining the amount of the assessment, the Assessment Act, R.S.O 1990, c. A.31, as amended ("Act"), requires the Board to arrive at two conclusions:

1. Section 44.(3)(a) requires the Board to "determine the current value of the land." The Board finds that the current value is $215,000 for 2014 and $219,000 for 2015.

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 if such an adjustment would result in a reduction of the assessment of the land." The Board finds that the current values of $215,000 and $219,000 are equitable with those of similar lands in the vicinity, and adjustments are not required.

6The assessment of the subject property is reduced from $220,000 to $215,000 for the 2014 taxation year and from $224,000 to $219,000 for the 2015 taxation year.

REASONS FOR DECISION

The Subject Property

7The subject property is a residential condominium in the Emerald Woods Condominium (Registered as Nipissing Condo Plan No. 14) located at 624 Lakeshore Drive, Unit 34, in the City of North Bay. MPAC determined the property's current value using the direct sales comparison approach to value. It is classified as residential ("RT"), and there is no issue with regard to its classification (Exhibit 1, p. 1). The 958-square-foot one-storey dwelling was built in 1987, and has a basement area of 958 square feet ("sq. ft"), of which 700 sq. ft. are finished. (Upon an inspection of the property after its sale, the finished area of the basement was corrected from 483 to 700 sq. ft., which MPAC testifies "was there at the time of sale and we also added the air conditioning which was added after the sale" Exhibit 1, p. 1).

Relevant Legislation

8In determining the assessment, the Board is governed by the following sections of the Act:

9Section 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.

10Section 19.(1) of the Act states:

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

11Section 19.2(1) of the Act states:

19.2(1) Valuation days – Subject to subsection (5), the day as of which land is valued for a taxation year is determined as follows:

1. For the 2006, 2007 and 2008 taxation years, land is valued as of January 1, 2005.

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 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.

13Section 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.

14Section 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.

The Board's Analysis

Determination of Current Value

15The initial task for the Board is to use the best evidence available to determine the current value of the property in accordance with s. 1, 19.(1) and 44.(3)(a) of the Act. In its current value deliberations, the Board relies on sales of comparable properties. Assessed values of properties are dealt with in the equity section of the decision. The Board finds that the current value is $215,000 for 2014 and $219,000 for 2015.

16Mr. Hyatt submits Exhibit 1, a Valuation Report which includes an exterior photograph of the subject building, two appendices and an Equity Analysis.

17Appendix A is a Market Analysis (with locational map) which estimates the current value of the subject property using 2009, 2010, 2011 and 2012 sales of six suggested comparable properties in the same 624 Lakeshore Drive building as the Appellant's property.

18Appendix B depicts Sales for Price Changes over Time; in its effort to adjust sale dates to the valuation day of January 1, 2012, MPAC determines time adjustments by comparing the sale prices and assessments of 365 properties in the subject property's neighbourhood and adjacent neighbourhoods from September 2009 to August 2012. From this data, monthly time adjustment factors are established for this 36-month time period and are provided in Table 1.

19MPAC's Equity Analysis depicts 31 sales of residential properties "within 0.29 kilometer of the subject property" between September 2009 and August 2012. MPAC calls this an Assessment to Sale Ratio ("ASR") study.

20Mr. Martin provides as Exhibit 2 a binder of evidence and submissions, detailing his issues and reasons for appealing his assessment.

21He draws the Board's attention to two sales of properties which he considers very similar to his own and in the same building: Unit 35 referred to above, which sold for $200,000 in May 2013 and Unit 11 which sold in January 2015 for $197,000 (Tab 1, p. 2, 12, 13). Tab 8 depicts several sales which also occurred in 2013 and 2015. The Board does not consider any of these sales because either they are too far removed from the valuation day of January 1, 2012 to be reflective of the market at that time, or (for Units 20 and 39 which sold in 2012 and 2010 respectively) they are missing necessary information such as building total area.

22Nor does the Board consider Properties 7 and 8 (Tab 7) because, although they had sales within the relevant time period, they have larger building total areas and finished basement areas than the subject dwelling.

23Mr. Martin places great emphasis on property listings and time exposed to the market (Tabs 1, 2, 8, 9, 10 and 11). The Board gives this testimony little weight, as it must rely on property sales, not listings, to determine current value. Sales generally reflect "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," as required by the definition found in s. 1 and stated above. Listings do not.

24To arrive at his suggested value of $205,000 for the subject property, Mr. Martin makes several value adjustments to all the properties he submits, as well as to MPAC's six suggested sales comparables. He provides upward dollar adjustments for such attributes as an extra parking pad, proximity to visitors' parking area and whether the unit has a bay window at the front, and downward adjustments for lesser attributes such as fewer bedrooms/bathrooms, type of heating and lack of central air conditioning. The Board disregards this evidence because Mr. Martin's adjustments are not based on any recognized valuation methodology.

25Mr. Martin draws the Board's attention to percentage assessment changes between the 2008 and 2012 valuation days. The 2008 assessed value of the subject property is not before the Board, and there is nothing in the Act which requires there to be a correlation among assessments with different valuation days; rather, the relationship is between the subject property and relevant comparables within the accepted time frame. Market conditions may change, and may vary significantly from neighbourhood ("NBHD") to NBHD. It is not unusual for values to change by differing percentages from NBHD to NBHD. This principle may also be true for properties in the same NBHD. For these reasons, the Board gives little weight to the percentage calculations in "Market Value of Property Based on Time Adjustment" (Tab 1, p. 5) or to MPAC's July 2012 Community Snapshot at Tab 25.

26MPAC's six suggested sales comparables, all within the subject condominium building, provide the best evidence the Board has to assist it in determining the correct current value of the subject property. They have enough similarities to make them very good comparables to the subject Unit 34; all are one-storey 958-square-foot units built in 1987. Appendix A provides no indication that any has undergone renovations.

27The time adjusted range of the six sale prices of these directly comparable properties is $205,999 to $225,306, with the midpoint being ($215,652 rounded) $215,000. The Board finds that this is the 2014 current value of the subject property. Mr. Martin does not dispute MPAC's addition of $4,000 (to reflect both the addition of central air conditioning after his purchase of the property in June 2013 and the corrected square footage of the basement finished area), and the Board finds that the property's 2015 current value is ($215,000 + $4,000) $219,000.

Equity with Similar Lands in the Vicinity

28The Act was amended in 2009 to require the Board to lower an assessment below current value if required to make the assessment equitable with the assessments of similar properties in the vicinity.

29Under s. 44.(3)(b) of the Act, the Board's task is not to determine the overall accuracy of MPAC's model, but to determine how it has performed with regard to similar property in the vicinity and to reduce the assessment if necessary.

30MPAC's Equity Analysis provides a 0.99 median time adjusted ASR for 31 residential properties within 0.29 kilometer of the subject property, an indication that MPAC's methodology is resulting in a very close match between assessed and market values in the subject vicinity. All six of MPAC's sales are included in the Equity Analysis, and their assessments range from $210,000 to $220,000, with the midpoint being $215,000, matching the current value determined above. The Board is thus satisfied that no further adjustment for equity is warranted.

CONCLUSION

31The Board reduces the assessment of the subject property from $220,000 to $215,000 for the 2014 taxation year and from $224,000 to $219,000 for the deemed 2015 taxation year.

2015 DEEMED APPEAL

32An 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.

33Section 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.