Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: December 7, 2015 FILE NO.: WR 135986

Assessed Person(s): Ivanka Grubisic and Victor Grubisic Appellant(s): Ivanka Grubisic Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 09 Respondent(s): City of Toronto

Property Location(s): 169 Mcallister Road Municipality(ies): City of Toronto Roll Number(s): 1908-051-800-00300-0000 Appeal Number(s): 3048032 and 3074560 Taxation Year(s): 2014 and 2015 Hearing Event No. 597836

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

Heard: October 23, 2015 in Toronto, Ontario

APPEARANCES:

Parties	Counsel+/Representative
Ivanka Grubisic	Self-represented
MPAC	S. Bai
City of Toronto	No one appeared

DECISION OF THE BOARD DELIVERED BY MARILYN SHARMA

INTRODUCTION

1The subject property is a single family detached residential property located at 169 Mcallister Road in Toronto.

2The subject property is situated on a lot with an effective site area of 8,578.5 square feet (“sq. ft.”).

3The building was originally constructed in 1999 with a total building area of 2,672 sq. ft.

4The subject property has a finished basement area of 130 sq. ft.

5The assessment of the subject property for the taxation year 2014 is $961,000.

6The Appellant argues that MPAC has over-assessed her property and believes that the assessment is excessive in relation to similar properties in the neighbourhood because:

i. The construction of the building remains unfinished;

ii. There are several defects that in her opinion negatively impact its value; and

iii. The property cannot be compared to other properties in the neighbourhood because of (i) and (ii) above.

ISSUE

7The issue before the Assessment Review Board (“Board”) is to determine whether the subject property has been over-assessed.

DECISION

i. The Board finds that the current value of the subject property for the 2015 taxation year is $1,017,200 (rounded).

ii. The Board finds no adjustment is required for equity purposes under s. 44.(3)(b) of the Assessment Act (“Act”).

iii. The Board applies the assessor’s recommendation to reduce the assessment by 10% to compensate for the extent of incompleteness of the subject’s home.

iv. Accordingly, the assessment of the subject property is reduced from $961,000 to $865,000 for the taxation year 2014 and deemed taxation year 2015.

REASONS FOR DECISION

The Legislation

8For the 2013 taxation year, in determining the value at which land shall be assessed, the Board must have regard to the following provisions of the Act:

9Section 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.

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)2 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:

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 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.

14Section 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.

Analysis

15Under the Act the Board is required to do three things:

(1) Find the current value of the property;

(2) Make reference to the value at which similar lands in the vicinity are assessed; and

(3) Adjust the assessment of the subject property if the adjustment would result in a reduction in the assessment.

Current Value

16The best measure of current value is an arm’s length and market tested sale of the subject property on the valuation date of January 1, 2012, or close to it. If no such transaction took place, a further measure of current value is arm’s length and market tested sales of comparable properties in the same vicinity and market. This measure acts as a benchmark and gauge of the correctness of the assessed value of the subject property. The onus for establishing the correctness of the current value lies with MPAC.

MPAC’s Evidence

17MPAC provided six suggested comparable properties as shown in Table1:

Table 1 MPAC’s Suggested Comparable Properties

Address	Bldg. Area (sq. ft.)	Lot Size (sq. ft.)	Effective Year Built	Time Adj. Sale Amt.	Sale Date
169 Mcallister Road (subject property)	2,672	8,578.5	1999
9 Barclay Road	2,958	4,800.0	1950	$1,131,190	July 2012
32 King High Avenue	2,628	5,251.5	1998	$1,073,549	June 2011
106 Collinson Boulevard	2,831	7,027.6	2011	$1,057,448	Dec. 2011
104 York Downs Drive	2,364	3,706.0	2003	$965,661	July 2012
90 Yeomans Road	2,805	5,133.0	2008	$1,067,770	Nov. 2011
52 Harlock Boulevard	2,716	5,133.0	2002	$897,835	Aug. 2012

18The Assessor contends that the above six suggested properties in the vicinity of the subject property are comparable properties for the following reasons:

i. The properties are all located in the same neighbourhood;

ii. The properties are of similar building size, and age and notes that all have smaller lots.

19The Assessor stated that in September 2015 he conducted an inspection of the subject property and found that there were some deficiencies with the building. He further stated that he estimates that the building is around 9% incomplete. He estimated the cost to bring the building to completion was approximately $82,000 or 9% of the current assessed value; he however rounded out the cost to 10% ($96,000) and made an offer to reduce the assessment from $961,000 to $865,000. The Appellant refused the offer.

20The Assessor stated that in his opinion the subject property is properly assessed. He made reference to the suggested comparable property at 32 King High Avenue which is one year older than the subject property, has a building that is slightly smaller than the subject property and it is located on a lot that is 3,327 sq. ft. smaller than the subject property and was sold in June 2011 for $1,004,000 (time adjusted sale amount of $1,073,000) which is higher than the assessed value of the subject property at $961,000. He believes that this indicates that the current value of the subject property is below market value. He therefore concludes that the assessment of the subject property at $961,000 is reasonable.

21The Assessor stated that in his opinion the offer to reduce the assessment by 10% to compensate for the level of completeness of the subject property is adequate and fair.

Appellant’s Evidence

22The Appellant submitted a document (Exhibit 2) containing the following information:

i. Overview;

ii. Deficiency List;

iii. Summary of Realtor Opinions;

iv. Realtor Opinions;

v. Appraisal Report from Hubbard Appraisal Services; and

vi. Photo Addendum of Major Deficiencies.

Overview

23Under this section of her document, the Appellant provided a detailed description of all the physical deficiencies pertaining to the subject property. She also provided a timeline of the construction of the property which indicates that the property was built over a period of time from 1996 to 1999. She provided details of what in her view still remains to be major deficiencies.

Deficiency List

24In this part of her submission, the Appellant submitted an extensive list and description of all the deficiencies with her property. The first part of the list outlines a brief history of the construction activities between 1996 and 1999. The second part of the Deficiencies List itemizes the issues she has labelled as deficiencies throughout the building - the top floor, the first floor, the basement area and the exterior.

Summary of Realtor Opinions and Realtor Opinions

25Included in Exhibit 2 are the opinions of three real estate brokers obtained by the Appellant regarding their views as to the potential value of the subject property. The brokers’ suggested values are $740,000, $850,000 and $886,900.

26The Appellant stated that based on the brokers’ opinions she believes that the assessed value of her property should be $816,700.

Appraisal Report Opinion

27In Exhibit 2 the Appellant submitted an appraisal report prepared by Hubbard Appraisal Services in which the Appraiser suggests that the value of the subject property, taking into account all the deficiencies identified falls within a narrow range from $823,000 to $841,000.

Analysis of Evidence

Analysis of MPAC’s Evidence

28The Board has reviewed the property details pertaining to the six suggested comparable properties submitted by MPAC. The Board accepts all six suggested comparable properties as comparable to the subject property because they are located in the same neighborhood as the subject property and they are of similar effective year built and similar building size.

29The Board accepts the assessor’s estimate of the status of completion of the subject property which was based on his on-site inspection on September 30, 2015 and was corroborated in the appraisal report prepared for the Appellant by Hubbard Appraisal Services which describes the building as 90% complete.

Analysis of Appellant’s Evidence

30The Board reviewed the information submitted by the Appellant contained in Exhibit 2. While providing very detailed descriptive information it was however not useful in assisting in determining the current value of the subject property.

31The Board considered the extensive and detailed deficiencies provided by the Appellant in Exhibit 2 and finds it to be a shopping list compiled by the Appellant containing not only issues relating to the incomplete construction but also routine maintenance-related issues such as repainting and replacement of smoke detector. The Board places no weight on the list since it represents the subjective opinion of the Appellant. The Board relies on professional/expert evaluations to establish the full nature, extent and costs for the completion of the original construction. No such evidence was provided by the Appellant.

32The Board reviewed the opinions of the three realtors submitted by the Appellant regarding the estimated value of the subject property. The Board is unable to give consideration to the value estimates since the realtors were not present at the hearing to answer questions as to how the values were derived or to be cross-examined.

33The Board also considered the appraisal report prepared by Hubbard Appraisal Services for the Appellant. The Board is constrained to accept the findings of the report because:

i. The Appraiser was not in attendance to answer questions nor give explanations required both by the Board as well as the Assessor;

ii. The Board was not able to verify important information regarding suggested comparable properties included in the report;

iii. The Board was not able to obtain explanations as to how the adjustments to the sale prices of comparable properties were derived.

Board’s Analysis

34The Board accepts the estimate of completion of the building on the subject property as being 90% complete. This is based not only on the Assessor’s site visit but also on the observation of the Appellant’s own appraiser (Hubbard Appraisal Services) who identifies the building as 90% complete in her appraisal report.

35The Board finds that the Assessor’s estimate of approximately 10% reduction in the assessment of the subject to account for the fact that the building is approximately 90% completed is reasonable.

36The Board accepts that the six suggested comparable properties submitted by MPAC are similar to the subject property. All have valid sales.

37The Board rejects the suggested comparable properties submitted by the Appellant with the exception of the property located at 52 Harlock Boulevard which was also provided as a suggested comparable property by MPAC. The Board was unable to accept the other suggested comparable properties presented in the appraisal report submitted by the Appellant since the appraiser was not present to answer questions or verify the accuracy of the information.

Determination of Current Value

38The Board agrees that in this case the best method to determine the current value of the subject property is based on the sales of similar properties in the neighborhood.

39The Board, having accepted the six suggested comparable properties submitted by MPAC as being comparable to the subject property, all having valid sales, finds that the average sale value per square foot is $380.70. When this value is applied to the subject property, it results in a current value of $1,017,230.

40The Board finds that the current value of the subject property is $1,017,200 (rounded).

Equity with Similar Lands in the Vicinity

41The Board is required under s. 44.(3) sub-paragraph (b) of the Act, 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. For purposes of establishing equity, properties do not need to be comparable; they need to be of a similar nature and within a reasonable proximity. To determine equity the Board may look at the Assessment to Sales Ratio (“ASR”).

42The ASR is a ratio of a property’s assessment to its sale price. If sales are in the same homogeneous neighborhood, the Board may infer that MPAC has used the same assessment methodology for the subject property as it did with comparable properties presented. Therefore, the review of ASRs may indicate whether MPAC has been under or over-assessing the area.

43MPAC presented the sales of 30 properties within 0.39 kilometres of the subject property which occurred between 2011 and December 2012. For the purpose of establishing equity the Board considers the sales between January 2011 and December 2012 as valid sales. The median ASR of the 30 valid sales is 1.00. A value within five percentage points is usually considered an acceptable value. In this case the median ASR of 1.00 indicates that MPAC’s methodology may be producing assessments in line with sales. The Board therefore finds that no adjustment is required for equity in accordance with s. 44.(3) (b) of the Act.

CONCLUSION

44The Board finds that the current value of the subject property for the 2015 taxation year is $1,017,200 (rounded).

45The Board finds no adjustment is required for equity purposes under s. 44.(3)(b) of the Act.

46The Board applies the assessor’s recommendation to reduce the assessment by 10% to compensate for the extent of incompleteness of the subject’s home.

47Accordingly, the assessment of the subject property is reduced from $961,000 to $865,000 for the taxation year 2014 and 2015 taxation years.