Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: December 8, 2015

FILE NO.: WR 134536

Assessed Person(s): John Ivan Jakab

Appellant: John Ivan Jakab

Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 15

Respondent(s): City of Burlington

Property Location(s): 4384 Lakeshore Road

Municipality(ies): City of Burlington

Roll Number(s): 2402-080-802-06500-0000

Appeal Number(s): 2984404, 3032785 and 3086907

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

Hearing Event No. 591144

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

Heard: August 21, 2015 in Burlington, Ontario

APPEARANCES:

Parties	Counsel+/Representative
John Ivan Jakab	Paul Grosman
MPAC	John Cole
City of Burlington	No one appeared

DECISION OF THE BOARD DELIVERED BY ANTHONY LaREGINA and MARGARITA OKHOVATI

INTRODUCTION/ISSUES

1The appeals before the Assessment Review Board (“Board”) were filed by the Assessed Person/Appellant, John Ivan Jakab in respect to the returned assessment of $3,048,000 for the subject property at 4384 Lakeshore Road in the City of Burlington for the 2013, 2014 and 2015 taxation years.

2Mr. Cole representing MPAC introduced three sales of comparable waterfront properties on Lake Ontario located in the vicinity of the subject property. Mr. Cole argues that based on the adjusted sale range of value for the comparable properties, the current value should be confirmed at $3,048,000 for the 2013, 2014 and 2015 taxation years. Furthermore, based on the equity analysis showing a 1.0 median ASR, he requests that no adjustment be made to compensate for the equitable assessment of similar properties in the vicinity.

3Mr. Grosman representing the Appellant argues that the subject property is not located directly on Lakeshore Road rather on Picken’s Lane, which is a legal right of way. Mr. Grosman’s position is that the value of the subject property cannot be compared to properties which are directly located on a road front. He requests a 25% reduction in the assessment of the subject property resulting from its compromised location and restricted/limited access. Mr. Grosman requests that the Board reduce the assessment of the subject property from $3,048,000 to $2,246,000.

DECISION

4The Board has to decide:

• Whether the returned assessments of $3,048,000 for 2013, 2014 and 2015 taxation years for the subject property are at current value as of the January 1, 2012 valuation date; and

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

5The Board finds the current value of the subject property to be $3,048,000 for the 2013, 2014 and 2015 taxation years.

6The 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.

7Therefore, the Board confirms the assessment at $3,048,000 for the 2013, 2014 and 2015 taxation years.

REASONS FOR DECISION

Legislation

8The Board must have regard to s.1, s.19. (1), s.19.2(1), s. 40. (17), s. 40. (19), s. 44.(3)(a) and (b) of the Assessment Act (“Act”) when determining whether or not the assessment under appeal is correct.

9Section 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.

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 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.

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)(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.

Subject Property

15The subject property is located at 4384 Lakeshore Road in the City of Burlington. The subject property is a one storey single family detached home located on Lake Ontario. The subject was built in 1990 with a total building area of 3,326 square feet (“sq. ft.”) on the main floor and 3,326 sq. ft. in the basement with no finished space. MPAC has designated this property to be a quality 8.0. The subject lot has an effective frontage of 125 feet and an effective depth of 150 feet, therefore, a total lot area of 30,056.4 sq. ft. The subject property’s neighborhood is made up of a mix of new and old single family dwellings of which some are located on Lake Ontario. The description of the subject property was agreed to by Mr. Grosman as properly reflecting the characteristics described by MPAC.

MPAC’s Evidence presented by Mr. Cole

16Mr. Cole filed Exhibit 1 in support of the assessment as returned. Exhibit 1 is a Valuation Report of the subject property which includes the Property Profile, a Map of the vicinity identifying the location of the subject property and the comparable sales, Comparable Sales Chart Appendix A, Price Change over Time Analysis to determine time adjustment factors and an Equity Analysis.

17Mr. Cole began by describing the subject property and then presented the following chart of three comparable sales to support the direct sales approach to value.

18Details of Mr. Cole’s “Comparable Sales Chart” is summarized in Appendix A:

	Subject	Sale A	Sale C	Sale D
Address	4384 Lakeshore Road	4058 Lakeshore Road	122 Birett Drive	124 Birett Drive
CVA $	3,048,000	3,555,000	1,904,000	3,036,000
Sale Amount		3,800,000	1,650,000	3,200,000
Sale Date		2011/06	2012/10	2010/12
Adj. Sale Amount		3,894,171	1,593,674	3,356,074
Effective Frontage Ft.	125.00	100.00	83.00	80.00
Effective Depth Ft.	150.00	359.00	175.00	175.00
Effective Site Area/ sq. ft.	30,056.40	35,900.00	13,503.60	13,939.20
Year Built	1990	2003	1970	1969
Build Area/ sq. ft.	3,326	3,600	2,520	3,414
Basement Area/ sq. ft.	3,326	3,600	2,520	3,414
Finished Basement Area/sq. ft.		3,357	1,369	3,214
Quality Level	8.0	8.5	8.0	8.0
Comparability to Subject		Superior	Inferior	Inferior

19Mr. Cole testified that the range of time adjusted sale values for the three comparable sales is from $1,593,674 to $3,894,171. Mr. Cole submits that the current value of the subject property at $3,048,000 falls within the range and is therefore reasonable. Mr. Cole argues that the best comparable to the subject property is 124 Birett Drive which has a very similar building area to the subject. He states that both properties have the same quality level of 8.0 although he listed the comparable property as being inferior to the subject property.

20Mr. Cole acknowledged that the three comparable sales presented by MPAC are all located directly on a full service road while the subject is located on Picken’s lane, a laneway perpendicular to Lakeshore Road leading to Lake Ontario. Mr. Cole also stated that the subject has deeded access to Picken’s Lane with no restrictions and full municipal services.

Appellant’s Position presented by Mr. Grosman

21Mr. Grosman presented Exhibits 2 and 3 into evidence which consist of the following;

i. Survey showing the location of the subject property.

ii. Deed of Land

22Mr. Grosman argued that the subject property is unlike the comparable properties presented by MPAC in that the access to the subject is through a deeded right of way called Picken’s Lane.

23Mr. Grosman agrees that there is no dispute on the facts regarding registration and right of access.

24Mr. Grosman also agrees that the property has full municipal services.

25Mr. Grosman admits that he has no quantitative evidence to support an adjustment to current value but he opines that the value of the property is compromised because it has no frontage on Lakeshore Road.

26Although Mr. Grosman has provided no evidence to substantiate a reduction in current value, he requests a 25% reduction from $3,048,000 to $2,286,000 based on a legal argument.

MPAC’s Summation

27Mr. Cole submits that based on the adjusted sale range of the three sales presented by MPAC of similar properties in the same vicinity, it is clear that the subject property should be confirmed at $3,048,000. Mr. Cole submits further that these were the only similar sales MPAC could find in the vicinity to support the current value of the subject property.

28Mr. Cole argues that while the subject is not located directly on Lakeshore Road it still has full municipal services and a legal right of way with no restrictions to access the property.

29Mr. Cole concludes by stating that Mr. Grosman has entered no sales evidence or quantitative evidence of any kind supporting a reduction in current value.

30Mr. Cole requests that the Board set the current value for the subject property at $3,048,000 and make no further downward adjustment for equity.

Appellant’s Summation

31Mr. Grosman submits that Mr. Cole has entered three properties in support of current value all of which have direct access to the road and none are located on a laneway as the subject property. Mr. Grosman submits further that the subject property is located on a deeded private road owned by two other property owners. Mr. Grosman questions whether MPAC’s onus of proof for current value has been met arguing that the comparable property sales provided by MPAC are not similar and the range of the adjusted sale values between $1,593,000 and 3,894,000 is too large.

32Mr. Grosman submits that he has no quantitative evidence and no sales evidence to support an adjustment to current value. His entire case stems from the restricted and limited access to the subject property. Mr. Grosman refers to the Board’s decision in Fenwick case (2012722 Ontario Inc. v. Municipal Property Assessment Corp., Region No. 09 [2012] O.A.R.B.D. No. 120) chaired by Members LaRegina and Stabile where a 25% reduction was made due to limited access to the subject property. In addition, Mr. Grosman also entered the Cartwave Realty Case (Cartwave Realty Ltd. v. Municipal Property Assessment Corp., Region No. 1 [2002] O.A.R.B.D. No. 45) chaired by Member Greenham where a 40% reduction was made as a result of limited access but did not rely on this case to support his arguments.

33Mr. Grosman concludes that property appraisal is an art not a science and therefore cannot always be quantified. On the strength of the Fenwick case Mr. Grosman is requesting that the Board reduce the current value by 25% from $3,048,000 to $2,286,000.

The Board's Analysis and Decision

34The 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.”

35The 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.

36The only sales evidence submitted to the Board in support of current value are the comparable sales provided by MPAC. When analyzing those sales the Board is in agreement with Mr. Cole that while the sales are not identical to the subject property they are similar in nature, in close proximity to the subject property and all located on Lake Ontario. The assessment of the subject property falls within the range of time adjusted sale values of the comparable properties which demonstrates that the assessment of the subject property in relation to the comparable sales is reasonable. The Board agrees with Mr. Grosman that the adjusted sale range is large but these are the only sales in evidence to support current value. Furthermore, it is the Board’s view that 124 Birett Drive is inferior to the subject property as the effective lot area is 16,117 sq. ft. smaller and the structure is 21 years older than the subject. Therefore, the Board believes that the current value of the subject property should be at the upper end of the adjusted sale range. The Board also agrees with Mr. Grosman that these sales are not located on a laneway like the subject property but once again Mr. Grosman provided no evidence to demonstrate how the laneway impacts the value of the subject property.

37Based on the sales evidence provided by MPAC the Board will set the current value of the subject property at $3,048,000.

38In analyzing Mr. Grosman’s request to reduce the current value by 25% due to restricted and limited access, the Board notes that there is no similarity between the Fenwick case and the case at hand. In the Fenwick case, counsel for the appellant introduced two witnesses who provided the Board not only their expert opinion but also substantial evidence in support of current value. They demonstrated that the lands in question were secondary lands for secondary purposes. Also, the lands were industrial lands which were land locked by other industrial properties and a railway track. The subject property is a primary residence with full municipal services that abuts Lake Ontario and not a railway track or Industrial property. Furthermore, Mr. Grosman has not submitted any evidence to show that there is a restriction or limited access to the property in any way.

39The Board therefore rejects Mr. Grosman’s request to make a 25% negative adjustment on the grounds of restricted and limited access to the subject property.

Equity Analysis

40Section 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.

41Mr. Cole submitted an equity analysis as part of exhibit 1 indicating that the median assessment to sales ratio is 1.0 based on 30 sales of similar properties in the vicinity.

42Mr. Grosman pointed out that both 4058 Lakeshore Road and 124 Birett Drive were not included in the study. The Board notes that including these sales in the study would marginally reduce the median ASR from 1.0 to 0.99. Furthermore, Mr. Grosman produced no evidence in support of an equity adjustment.

43For 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

44Therefore, the Board confirms the reassessment at $3,048,000, 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.