Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: December 22, 2015 FILE NO.: WR 134336

Assessed Person(s): Violet Kekic and Cristian V Delafontaine Appellant(s): Violet Kekic Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 18 Respondent(s): City of Niagara Falls Property Location(s): 3299 Avery Boulevard Municipality(ies): City of Niagara Falls Roll Number(s): 2725-130-002-13364-0000 Appeal Number(s): 3057294 and 3088792 Taxation Year(s): 2014 and 2015 Hearing Event No.: 598171 Legislative Authority: Sections 33 and 40 of the Assessment Act, R.S.O. 1990, c. A.31, as amended Heard: August 19, 2015 in Niagara Falls, Ontario

APPEARANCES:

Parties	Representative
Violet Kekic and Cristian V Delafontaine	Violet Kekic
MPAC	Scott Cripps
City of Niagara Falls	No one appeared

DECISION OF THE BOARD DELIVERED BY ANTHONY LaREGINA

INTRODUCTION/ISSUES

1The appeals before the Assessment Review Board (“Board”) were filed by the Assessed Person/Appellant, Violet Kekic in respect to the returned assessment of $522,000 for the subject property in the City of Niagara Falls for the 2015 taxation year and $391,000 for the 2014 taxation year.

2Mr. Cripps, representing MPAC, introduced six sales of comparable properties all located in the Niagara Falls area. Mr. Cripps argues that based on the comparable sales he has provided in evidence the current value should be confirmed at $522,000 for the 2015 taxation year. Furthermore, based on the equity analysis showing a 0.98 median Assessment to Sales Ratio (“ASR”) he further requests that no adjustment be made to compensate for the equitable assessment of similar properties in the vicinity.

3Mr. Cripps further requests that the Board decision be applied to the s. 33 appeal for the 2014 taxation year. Mr. Cripps also points out that MPAC is in agreement with the Appellant that the occupancy date of the new home was June 20, 2014 as opposed to January 1, 2014. This should also be reflected in the assessment for the 2014 taxation year.

4Ms. Kekic argues that based on the assessments of Properties 2, 4, and 7 of My Neighborhood Properties of Interest, Exhibit 2, and the sale values of MPAC Comparables B and C, the subject property should be valued between $361,349 and $438,314. Ms. Kekic further argues that this range of values is in line with her total cost of land and building of $415,000. Ms. Kekic requests that the Board reduce the assessment of the subject property to no more than $438,000.

DECISION

5The Board has to decide:

• Whether the returned assessments of $522,000 for the 2015 taxation year, and $391,000 for the 2014 taxation year for the subject property are 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.

6The Board finds the current value of the subject property to be $522,000 for the 2015 taxation year.

7The 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.

8Based on the Board’s decision to set the current value at $522,000 for the 2015 taxation year and the parties’ agreement that the occupancy date was June 20, 2014, the Board finds that the assessment for the s. 33 appeal for the 2014 taxation year is $208,889.85 or $208,900 (rounded).

REASONS FOR DECISION

Legislation

9The Board must have regard to s. 1, 19.(1), 19.2(1), 40.(17), 40.(19), 44.(3)(a) and (b) 40.(26) of the Assessment Act (“Act”) when determining whether or not the assessment under appeal is correct.

10Section 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.

11Section 19.(1) of the Act states:

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

12Section 19.2(1) of the Act provides:

Valuation days

19.2 (1) 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.

Exception

(5) Subsection (1) does not apply in respect of the valuation of land for a taxation year after 2004 if the Minister prescribes a different day as of which land is valued for that year.

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.

15Section 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.

16Section 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

17The subject property is located at 3299 Avery Boulevard in the City of Niagara Falls. The subject property is a one-storey single family detached home not located on water. The subject was built in 2013 with a total building area of 2,123 square feet on the main floor and 2,178 square feet in the basement with no finished space. The difference in area is the addition of a cold storage room which is in the basement. The subject lot has an effective frontage of 261.22 feet and an effective depth of 704.72 feet, therefore, a total lot area of 3.48 acres. The subject property is considered to be a rural property with no city water, no sewage or curbs. The property is on septic and has a well for fresh water. The description of the subject property was agreed to by Ms. Kekic as properly reflecting the characteristics described by MPAC.

Current Value - Evidence and Analysis

18Mr. Cripps, representing MPAC, 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.

19Mr. Cripps began by describing the property and then presented the following chart of six comparable sales to support the direct sales approach to value.

20Details of Mr. Cripps’s “Comparable Sales Chart” are summarized in Exhibit 1, Appendix A:

	Subject	Sale A	Sale B	Sale C	Sale D	Sale E	Sale F
Address	3299 Avery Boulevard	3161 Marshall Road	9856 Willoughby Drive	3924 Weinbrenner Road	3790 Weinbrenner Road	3770 Weinbrenner Drive	11619 Willoughby Road
CVA ($)	522,000	305,000	297,000	222,000	312,000	256,000	246,000
Sale Amount ($)		358,000	317,000	240,000	369,000	316,000	250,000
Sale Date		2012/12	2012/04	2011/10	2012/06	2012/11	2011/09
Adj. Sale Amount ($)		341,151	312,306	242,605	360,485	302,365	253,815
Effective Frontage(ft.)	261.22	n/a	120.00	50.03	50.03	50.03	200.00
Effective Depth (ft.)	704.72	n/a	560.20	119.98	119.98	119.98	400.00
Effective Site Area Acres	3.48	6.41	1.54	0.14	0.14	0.14	1.84
Year Built	2013	1987/2012	1987	2005	2008	2004	2001
Build Area	2123	1247	1847	1200	1660	1493	760
Basement Area (sq. ft.)	2178	1199	645	1200	1309	1493	760

21Mr. Cripps testified that Sales A, B and F are all rural properties with the same services located in the same homogenous area as the subject property. Sales C, D and E are in urban areas north of the subject property and have all the services of a normal urban area including, water, sewers, curbs, lighting etc. The urban area is also a different homogenous area to the subject property.

Appellant’s Position

22Ms. Kekic presented in evidence Exhibits 2, 3 and 4 which consist of the following:

2. My property of interest report.
3. Photographs of the subject property as well as the three properties identified in the properties of interest report.
4. Plan of subdivision identifying the subject lot as lot 18.

23Ms. Kekic began by reviewing the three properties which she identified in Exhibit 2 as detailed in the chart below:

	Subject	Property 2	Property 4	Property 7
Address	3299 Avery Boulevard	3260 Avery Boulevard	3510 Avery Boulevard	3477 Avery Boulevard
CVA ($)	522,000	572,000	492,000	802,000
Sale Date				09/2014
Sale Value ($)				760,000
Year Built	2013	2009	2011	2011
Site Area hectares	1.41	1.15	1.07	1.47
Total Build Area (sq. ft.)	2123	2772	2604	3681
Assessed Value per sq. ft. ($)	245.87	206.34	188.94	217.87
Sale Val per sq. ft. ($)				206.46

24Ms. Kekic established a range of values based on Properties 2, 4 and 7 from Exhibit 2 as well as Sales B and C from Exhibit 1 presented by MPAC to substantiate the current value of the subject property. This range of values was between $361,349 and $438,314.

25Property 2, 3260 Avery Boulevard; Ms. Kekic applied the assessed value per square foot of $206.34 to the building area of the subject property to arrive at $438,095.

26Property 4, 3510 Avery Boulevard; Ms. Kekic applied the assessed value per square foot of $188.94 to the building area of the subject property to arrive at $401,119.

27Property 7, 3477 Avery Boulevard; Ms. Kekic applied the sale value per square foot of $206.46 to the building area of the subject property to arrive at $438,314.

28Sale B, 9856 Willoughby Drive; Ms. Kekic calculated the unadjusted sale value per square foot of building area $171.62 and applied it to the building area of the subject property to arrive at $361,349.

29Sale C, 3924 Weinbenner Road; Ms. Kekic calculated the unadjusted sale value per square foot of building area at $200 per square foot and applied it to the building area of the subject property to arrive at $424,600.

MPAC’s Summation

30Mr. Cripps concludes that the comparable properties presented by MPAC are the only sales he could find in the area to substantiate the current value of the subject property. Mr. Cripps argues the subject property is superior to the comparables presented because it is a newly built home and substantially larger in building area than any of the comparable sales MPAC presented. Mr. Cripps therefore requests that the Board set the current value at $522,000 for the 2015 taxation year.

Appellant’s Summation

31Ms. Kekic submits that her property value should be within the range of value between $361,349 and $438,314 as calculated above. Ms. Kekic further submits that this range is supported by the total cost of the subject property of $415,000 which includes $125,000 for the cost of land and $290,000 for building costs. Ms. Kekic requests that the Board reduce the current value to no more than $438,000 for the 2015 taxation year.

The Board's Analysis and Decision

32The 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.”

33The 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.

34The Board rejects the six comparable sales submitted by MPAC in support of current value because they are all substantially inferior to the subject property. The building areas of all the comparables are anywhere from 36% to 86% of the building area of the subject property. The site areas for the comparables range from 4% to 200% as compared to the site area of the subject property with no properties even close to the 3.48 acres. Finally, the subject property was newly built in 2013 while the comparables range from 1987 to 2008. Sale A was renovated in 2012 but the nature of the renovation is not in evidence and furthermore, in this case, the building area is 40% smaller than the subject and the site area is double that of the subject property.

35Even though the photographs of the homes on Avery Boulevard appear to be much more similar to the subject property the Board also rejects the one comparable sale submitted by Ms. Kekic, 3477 Avery Boulevard, because the total building area is 1,558 square feet larger than that of the subject property. Furthermore, the sale is a September 2014 sale which is too far removed from the January 2012 valuation date.

36The Board rejects Ms. Kekic’s approach to establishing a range of values for the following reasons;

a) For 3260 and 3510 Avery Boulevard the rate calculation is based on assessment value per square foot as there is no sale on these properties. Therefore, these properties cannot be used to establish current value.

b) For 3477 Avery Boulevard, 9856 Willoughby Drive and 3924 Weinbrenner Drive the rate calculation is based on the unadjusted sale value per square foot of building area. These three properties are not considered to be directly comparable to the subject property and therefore a sale value per square foot calculation would produce inaccurate results as the building areas are substantially different to the subject property.

37It is clear to the Board that MPAC’s comparable sales are substantially inferior to the subject property and the Appellant’s one comparable sale is substantially superior. On the other hand, the Board is satisfied that the current value of the subject lies somewhere between the average unadjusted sale values of MPAC’s most superior properties being 3161 Marshall Road and 3790 Weinbrenner at $308,500 and the unadjusted sale value of 3477 Avery Boulevard presented by the appellant at $760,000. The midpoint between these two values is $534,250 which is very close to the assessed value as returned for the subject property at $522,000. This value is further corroborated by the median ASR presented by Mr. Cripps of 0.98.

38Therefore, the Board will set the current value of the subject property at $522,000 for the 2015 taxation year.

Equity Analysis

39Section 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 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.

40Mr. Cripps submitted an equity analysis as part of Exhibit 1 indicating that the median ASR is 0.98 based on 30 sales of similar properties in the vicinity.

41For 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

42The Board finds that the assessment should be confirmed at $522,000, for the 2015 taxation year.

43Based on the decision of the Board for the 2015 taxation year and the agreement between the parties that the occupancy date was June 20, 2014, the Board finds that the assessment for the 2014 s. 33 appeal is $208,889.85 rounded to $208,900.