Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: December 11, 2015 FILE NO.: WR 135686

Assessed Person(s): Anthony Micallef Appellant(s): Anthony Micallef Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 09 Respondent(s): City of Toronto Property Location(s): 1376 Queen Street East Municipality(ies): City of Toronto Roll Number(s): 1904-083-110-02400-0000 Appeal Number(s): 2997231, 3015257 and 3079087 Taxation Year(s): 2013, 2014 and 2015 Hearing Event No.: 595236

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

Heard: September 30, 2015 in Toronto, Ontario

APPEARANCES:

Parties	Representative
Anthony Micallef	Elizabeth Cook
MPAC	Robert Boccia
City of Toronto	No one appeared

DECISION OF THE BOARD DELIVERED BY ANTHONY LaREGINA AND SUBUOLA AWOLERI

ISSUE

1The appeals before the Assessment Review Board (“Board”) were filed by the Assessed Person/Appellant, Anthony Micallef in respect to the returned assessment of $756,000 for the subject property in the City of Toronto for 2013, 2014 and 2015 taxation years.

2Mr. Boccia, representing MPAC, introduced four sales of comparable properties, all located on the same street and in the same commercial area. The range of adjusted sale value per square foot for the four properties was between $242.66 and $393.15. Mr. Boccia concluded that the assessed value per square foot of the subject at $240 is below the range of comparable sales and therefore reasonably valued. Mr. Boccia requests that the Board confirm the assessment at $756,000.

3Ms. Cook, representing the Appellant took the position that the comparable properties submitted by MPAC are superior to the subject and should not be used to support the current value of the subject property. Ms. Cook’s position is that the subject property is in poor condition and suffers from low water pressure. Based on these factors, Ms. Cook believes that the assessed value of the subject property should remain at $501,000, the valuation for the property as of January 2008. Ms. Cook requests that the Board reduce the assessed value from $756,000 to $501,000.

June 15, 2015 Hearing

4This appeal was scheduled for a full peremptory hearing on June 15, 2015. The Appellant and his representative Ms. Cook arrived at 10:00 a.m. for the hearing that was to start at 9:30 a.m. The Appellant had not provided MPAC with his disclosure and at the hearing made a request to record the proceedings.

5The hearing was chaired by the same panel writing this decision. At that hearing, the panel read s. 19 and s. 44.(3)(b) of the Assessment Act (“Act”) and explained the complete process in its opening remarks including current value and what constitutes the best evidence in support of current value and the importance of similar comparable properties which sold in the open market as of the January 2012 valuation date. Furthermore, in the opening remarks of both hearings on June 15 and September 30, 2015, it was clearly stated to the Appellant and Ms. Cook, that the Board’s authority strictly limits it to deal with the assessment of the subject property and that taxation and municipal services are the authority of the Municipality. The panel also determined that there had been no disclosure and the Appellant had not prepared any evidence. The panel read and provided a copy of Rule 45 of the Board’s Rules of Practice and Procedure (“Rules”) to both parties so that they understood the importance of the 21 day disclosure rule. The panel further made the following orders:

A) That MPAC provide a copy of their disclosure package to the Appellant and the Board that day, which they did.

B) An inspection be scheduled by both parties and carried out in advance of the September 30, 2015 full hearing.

C) A court reporter be provided by the Appellant in accordance with the Appellant’s request to record the full hearing.

D) The representative, Ms. Cook, provide an email address so that evidence could be exchanged between MPAC and the Appellant Mr. Micallef.

E) The exchange of information be executed in accordance with the Board’s disclosure rules.

F) That Mr. Micallef provides the Board with a written authorization for Ms. Cook to act as his representative in accordance to Rule 9 of the Board’s Rules.

DECISION

6The Board has to decide:

• Whether the returned assessment of $756,000 for 2013, 2014 and 2015 taxation years for the subject property is at current value as of the January 1, 2012 valuation date.

• Whether the value is equitable with the assessments of similar lands in the vicinity.

7The Board finds the current value of the subject property to be $756,000.

8The Board also finds that the current value as determined above requires no additional downward adjustment to make it equitable with the assessments of similar properties in the vicinity.

9Therefore, the Board confirms the assessment of $756,000 for the 2013, 2014 and 2015 taxation years.

REASONS FOR DECISION

Legislation

10The Board must have regard to s. 1, 19.(1), 19.2(1), 40.(17), 40.(19), 44.(3)(a) and (b) of the Act when determining whether or not the assessment under appeal is correct.

11Section 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.

12Section 19.(1) of the Act states:

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

13Section 19.2(1) of the Act provides:

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 those four taxation years.

14Section 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.

15Section 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.

16Section 44.(3)(a) and (b) of the Act state:

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.

17Section 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.

Subject Property

18The subject property is located at 1376 Queen Street East, on the north side, just east of Greenwood Avenue in the City of Toronto. The subject property is a three storey building with retail space on the first floor and two residential units on the second and third floors. The subject property was built in 1912 with approximately 3,150 square feet of total building area, with 1,050 square feet on the first, second and third floors and 1,050 square feet in the basement. The subject lot has a frontage of 21.25 feet and a depth of 120 feet and abuts two other neighboring properties that are similar in nature. The first floor of the subject property is not being used for retail purposes at this time and, therefore the entire building has a residential classification and is currently being occupied by Mr. Micallef. Ms. Cook and Mr. Micallef agreed to the description of the subject property as properly reflecting the characteristics described by MPAC.

Current Value - Evidence and Analysis

MPAC’s Position presented by Mr. Boccia

19Mr. Boccia, the assessor from MPAC, in support of the assessment as returned presented Exhibit 1. Exhibit 1 is a Valuation Report of the subject property which includes the Property Profile, a Map of Queen Street East identifying the location of the subject property and the comparable sales, Comparable Sales Chart, Price Change over Time Analysis to determine time adjustment factors, Equity Analysis and photos of the subject and each of the comparable properties.

20Details of Mr. Boccia’s “Comparable Sales Chart” is summarized in Table 1:

Table 1

Address	CVA $	Sale Date	Sale Amount $	Corner Code	Effective Frontage	Effective Depth	Lot Size	Actual Year Built	Storeys	Total Area
1376 Queen Street	756,000			0	21.25	120	2,550,000	1912	3	3,150
1175 Queen Street	819,000	2011/05	805,000	0	17.75	100	1,775,000	1969	3	2,928
1121 Queen Street	2,225,000	2012/11	2,957,000	0	80.08	100	8,008,000	1947	1	7,871
1091 Queen Street	938,000	2011/11	1,000,000	2	19.87	100	1,987,000	1910	2	2,574
1304 Queen Street	898,000	2012/08	1,1090,000	0	19.78	103.56	2,013,000	1918	2	3,194
1342 Queen Street	735,000	2012/10	766,362	0	19.71	100	1,971,000	1968	3	2,937

21Using Table 1 in conjunction with the time adjustment factors from Exhibit 1, Mr. Boccia presented the following chart deriving the time adjusted sales value per square foot for four of the comparable properties. Mr. Boccia excluded 1121 Queen Street as he felt this property was not comparable to the subject property. This analysis can be seen in Table 2 below:

Table 2

Address	Time Adjusted Sale Value $	Time Adjusted Sale Value/Square Foot $
1175 Queen Street	856,520	292.52
1091 Queen Street	1,012,000	393.16
1304 Queen Street	1,028,960	322.15
1342 Queen Street	712,716	242.66

22Mr. Boccia concludes from his analysis that the subject property’s assessed value per square foot is $240 and, therefore, below the time adjusted sale value per square foot of all the comparable sales he presented.

23Mr. Boccia also argues that the best comparable to the subject property is 1342 Queen Street. He emphasized that although the building is newer, it is the most similar in terms of building area and its proximity to the subject property. Mr. Boccia points out that the adjusted sale value per square foot for this comparable is $242.66 which is very close to the assessed value per square foot for the subject property at $240. He further states that while the assessments for both 1342 Queen Street and the subject property were almost identical the total building area of the subject is 213 square feet larger, therefore offsetting the difference in age between them.

24Mr. Boccia asserts that he has repeatedly attempted to do an inspection of the subject property so that he could assess the condition of the property and attempt to address the cost to cure the condition issues identified by the Appellant. He advised that there were two previous hearings: the first was on June 30,2014 and the last one on June 15, 2015. Finally based on the order to inspect issued on June 15, 2015, the parties scheduled the inspection for September 28, 2015. Mr. Boccia reported that the inspection was cancelled by the Appellant on the morning of September 28, 2015.

25Mr. Boccia concluded his evidence and reiterated in his summation that based on MPAC’s sales evidence and with the fact that he has not been able to inspect the property to determine a cost to cure any defects or deficiencies, he has no other option than to request the Board to confirm the assessment of the subject property at $756,000 as returned.

Appellant’s Position Presented by Ms. Cook and the Appellant, Mr. Micallef

26Mr. Micallef advised that he did not file this appeal, based on comparable properties or property value but rather on the fact that he cannot use the building for the intended use as retail or commercial space on the main floor and residential on the second and third floors, due to the substandard service he received from the City of Toronto (the “City”). That the lack of water pressure in the building is preventing him from leasing the property and this has been a perpetuating problem on this property for 18 years.

27Mr. Micallef further advised that he filed an application years ago with the City to repair the water problem. He was put in a long queue and to this date the City has not responded. Mr. Micallef expressed that the City has advised him that if he wants to jump the queue he is required to pay the City $10,000.

28Ms. Cook testified that the property is in its original condition and has never been beautified or upgraded. Ms. Cook claims that the lack of water pressure is the main reason that Mr. Micallef has never invested in or leased the building and he was left with no other choice but to occupy the building himself. According to Ms. Cook, the original appeal was not based on the condition of the building but rather on the lack of water services being provided by the municipality.

29According to the Order of the Board on June 15, 2015, the last day to serve the disclosure package was September 9, 2015 and Ms. Cook ensured that it was served on all parties including the City.

30Ms. Cook and Mr. Micallef were under the impression that it is mandatory for the City as a statutory party to appear at the hearing.

31Mr. Micallef received a letter dated September 28, 2015, in Exhibit 7, from Mr. Christopher Henderson, a lawyer at the City, advising that the City “does not participate in any appeals commenced by property owners regarding the assessment of single-family residential properties.” According to Mr. Micallef, this is extremely disappointing. He was confident that the City would appear since the key motivation for this appeal was to get the City to respond to their issue of the substandard services.

32Mr. Micallef believes that his assessment should not be increased because he is not getting adequate services from the City.

33Ms. Cook admits that she has not read the disclosure package served by Mr. Boccia because she believed the appeal was solely based on the lack of water pressure to the building. Ms. Cook and Mr. Micallef also believe that the inspection was not necessary for the same reason even though they now understand that the condition of the building would also be one factor in determining the assessed value of the property.

34Ms. Cook also admitted that they only now understand that they require the sale of comparable properties to establish the current value of the subject property.

35Ms. Cook and Mr. Micallef expressed their concern that they had been misled by the entire appeal process because they believed that according to the Board’s appeal form the municipality it is a statutory party and like any other party is required to respond and appear at the hearing.

36Ms. Cook admitted that she is not an experienced representative and that it is very difficult for her to understand the valuation process.

37Ms. Cook submitted that the properties presented by MPAC as comparable to the subject property are all upgraded and leased while the subject property is in its original condition and not leased. Ms. Cook requested that the Board not rely on the properties submitted by MPAC to establish the current value of the subject property because according to her they are not similar to the subject property.

38Ms. Cook concluded that the assessment of the property should remain at $501,000 which is the 2008 valuation because nothing has changed since that date, the building is still in its original condition and the water pressure problem still exists.

MPAC’s Summation

39Mr. Boccia submits that he made every attempt to contact the Appellant and understand his concerns. He left numerous messages with no call backs. He set up an inspection for September 28, 2015 and it was cancelled that morning. Consequently, he had no opportunity to assess the condition of the building and quantify the cost to cure and he can only rely on the disclosure package he served on Mr. Micallef on March 17, 2015. Mr. Boccia further submitted that there were two previous hearings since he has been on the file and that there has been no attempt on the part of the Mr. Micallef or Ms. Cook to communicate and resolve the appeal. Mr. Boccia submits that MPAC has done everything possible to resolve this appeal and believes that it has fulfilled its obligation to the Appellant.

40Mr. Boccia concludes that based on the fact that the assessed value per square foot for the subject property at $240 is below the range of adjusted sale values per square foot for the comparable properties MPAC is requesting that the Board confirm the assessment of the subject property at $756,000.

Appellant’s Summation

41Ms. Cook submits that the appeals process has been going on for two years and they learned on September 28, 2015, that the City would not participate and therefore would not be providing a response. Ms. Cook further submitted that the appeal process is flawed and misleading to the Appellants and that the appeal form states that the City is a statutory party and therefore has an obligation to respond. Ms. Cook admits that she does not understand property assessment or appraisal and that Mr. Micallef should probably have retained legal representation with better knowledge of property valuation. Ms. Cook submitted that Mr. Micallef legitimately believed that this process would have led to the resolution of the water problem with the City.

42Ms. Cook further submits that the comparable properties presented by Mr. Boccia are all superior to the subject property in that they are all income producing properties on the west side of Greenwood Avenue while the subject is on the east side of Greenwood Avenue and is not an income producing property. Furthermore, the comparables are all in better condition than the subject property with improvements and renovations over the years while the subject property is in its original condition.

43Ms. Cook requests that the Board reduce the assessment of the subject property from $756,000 to $501,000 which was the assessed value as of January 1, 2008, citing that the subject property has had no improvements and the water pressure problem still exists. If anything, Ms. Cook believes that the installation of a bus shelter and city garbage bin since the previous valuation date further detracts from the value of the subject property.

The Board's Analysis and Decision

44The thrust of the Act is to rely on current value as the basis for assessed value. 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.”

45The best evidence of current value is the sale of the subject property on or close to the valuation day of January 1, 2012. If, as in this case, no such sale occurred the sales of similar properties in the vicinity will be considered to establish current value of the subject property.

46The only sales evidence submitted to the Board in support of current value are the comparable sales provided by MPAC. In reviewing these sales, the Board is in agreement with Mr. Boccia that while the sales are not identical to the subject property, they are similar in nature. The range of time adjusted sale values per square foot of the building area for all the comparables is higher than the assessed value per square foot for the subject property which demonstrates that the market value of these properties is higher than the assessment of the subject property in relation to their building area.

47Ms. Cook did not provide any sales or market related evidence in support current value. Conversely, she asserts that the comparable sales submitted by MPAC are superior to the subject property since they have been upgraded and are currently leased and therefore not similar for the purposes of establishing current value of the subject property. The Board concludes from analyzing the various elements of the comparable sales that these properties are similar in nature in that they all have retail commercial on the first floor and residential on the second and third floors and they are also located in the same vicinity and on the same retail strip as the subject property.

48Ms. Cook has also submitted that the subject property is negatively affected by the lack of water pressure resulting in the Appellant not being able to lease the property. Ms. Cook has not produced any quantitative evidence to support this negative impact on the current value of the subject property and therefore the Board cannot support any downward adjustment in current value for lack of water pressure resulting in the property not being leased.

49Ms. Cook originally cited the water pressure in the building as the main cause for filing the assessment appeal and later also falling back on elements of condition to the structure, laneway issues as well as installation of the bus shelter and municipal garbage bin in front of the subject property. Ms. Cook once again has not submitted any evidence to substantiate and or quantify the impact on value to the subject property relating to these various issues. The Board ordered an inspection of the property at the hearing on June 15, 2015. The inspection was scheduled for September 28, 2015 and cancelled by the Appellant that morning. MPAC had no way of confirming, documenting and quantifying any issues related to municipal services or condition therefore the Board cannot make any downward adjustment to current value for any condition or service related issues.

50Ms. Cook requested that the Board reduce the assessment to $501,000 which was the valuation based on the January1, 2008 valuation date. The basis of her request was the fact that nothing had changed, the building was in the original condition and the problems relating to the building in 2008 are the same as 2012. The Board rejects this argument because Ms. Cook has not taken market conditions into consideration and provided any evidence in support of changes in market conditions between 2008 and 2012. This is partially demonstrated by the Price Change over Time analysis submitted by MPAC in Exhibit 1 clearly showing that between the period of January 2011 to December 2012, prices increased approximately 20.2% in the subject property’s vicinity.

51The Board will therefore set the current value of the subject property at $756,000 for the 2013, 2014 and 2015 taxation years.

52Ms. Cook claimed she did not realize that comparable property sales are required to support current value, despite the fact that the panel of this Board carefully explained to Ms. Cook in details all the requirements needed to support current value on June 15, 2015 and at this hearing.

53The Board made it very clear to both Ms. Cook and Mr. Micallef as to their obligations with respect to evidence and what constitutes good evidence in an assessment appeal. Ms. Cook and/or Mr. Micallef failed to return Mr. Boccia’s calls, did not provide an email address and cancelled the inspection set for September 28, 2015 as ordered by the Board at the June 15, 2015 full hearing event. It is the opinion of the panel that both MPAC and the Board have done everything possible to assist Mr. Micallef with his assessment appeal.

Equity Analysis

54Section 44.(3)(b) mandates and 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 Sale Ratio (“ASR”) is a tool often used to determine if a reduction in the assessment below current value is required to make an assessment equitable with the assessments of similar lands in the vicinity. The ASR is determined by dividing the assessment as returned by the time-adjusted sale price.

55While the burden of proof respecting current value rests with MPAC, and its evidence in that respect has been found to be determinative, the burden of proof respecting s. 44.(3)(b)’s equity requirement rests with the Appellant.

56Ms. Cook did not provide any evidence in support of an equity argument.

57Mr. Boccia submitted an equity analysis as part of Exhibit 1 indicating that the median ASR is 1.04 based on 30 sales of similar properties in the vicinity.

58For the purposes of s. 44.(3)(b), based on the equity analysis provided by MPAC, the Board finds that the current value, as determined above, does not require any further adjustment to make it equitable with the assessments of similar lands in the vicinity.

CONCLUSION

59The Board finds that the assessment should be confirmed at $756,000 for the 2013, 2014 and 2015 taxation years.

Footnotes

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