Assessment Review Board
Commission de révision de l’évaluation foncière
ISSUE DATE:
August 18, 2015
FILE NO.:
WR 127891
Assessed Person(s):
Daniel Hasratian and Karine Melkoumian
Appellant(s):
Daniel Hasratian and Karine Melkourmian
Respondent(s):
Municipal Property Assessment Corporation (“MPAC”) Region 09
Respondent(s):
City of Toronto
Property Location(s):
10 O’Meara Court
Municipality(ies):
City of Toronto
Roll Number(s):
1908-112-820-00344-0000
Appeal Number(s):
2979446, 3010387 and 3076916 (deemed 2015)
Taxation Year(s):
2013, 2014 (and deemed 2015)
Hearing Event No.
561219
Legislative Authority:
Section 40 of the Assessment Act, R.S.O. 1990, c. A.31, as amended
Heard:
September 26, 2014 in Toronto, Ontario
APPEARANCES:
Parties
Counsel+/Representative
D. Hasratian
Self-represented
MPAC
Chin-Wei Li
City of Toronto
No one appeared
DECISION OF THE BOARD DELIVERED BY SANDRA DRIESEL
INTRODUCTION
1The Appellant Daniel Hasratian is self-represented.
2MPAC reports the subject property is a 1980 year built, single detached, 2-storey house. The building total area (“BTA”) is 3,746 square feet. It has a finished basement area of 1,285 square feet. The site has a total size of 10,400 square feet and MPAC is assessing a frontage of 80 feet with a depth of 130 feet (8,705 square feet) as effective (in use). It has an attached garage. MPAC notes that the subject property (as evidence by Exhibit 2 - Arial Photograph of subject area) has an outdoor, in ground pool but has never been assessed for it. The Board notes the Mr. Li did not suggested that any adjustment be made to the assessment to consider this pool. Mr. Hasratian agrees with the description of the property as submitted.
3Mr. Li states that his submissions including a “Market Analysis” with time adjusted (“TAJ”) sales on nine suggested comparable properties, will support MPAC's position that the property is reasonably assessed at $1,078,000.
4He also reports that their analysis of Assessment to Sale Ratio (“ASR”) for 30 sales in the area shows that the subject property is equitable assessed and no equity adjustment is required.
5Mr. Hasratian argues that MPAC has not assessed his property correctly because they have failed to consider area influences that negatively impact the value of his property.
6He also submits that an analysis of his suggested comparable properties, with TAJ sales support his opinion of a more correct current value assessment (“CVA”) of $994,469 to $1,013,960. He notes that the time adjustment factors (“TAF’s”) submitted by MPAC to the Board are different than the TAF’s MPAC provided to him and if MPAC were to use the TAF’s they provided him, the calculated TAJ sales values MPAC submitted on their comparable properties would be significantly lower.
7The Appellant also argues that MPAC’s ASR calculations are not correct and that he finds from selected sales that MPAC is not equitably assessing properties in the area.
ISSUES
Adjustment(s) for Factors that might Negatively Impact Value
8Should the subject property receive adjustments for the railroad tracks and community housing the Appellant reports have a negative impact on the value of the subject property.
Time Adjustment Factors
9The Appellant questioned why TAF’s calculated by MPAC in their evidence to the Board differ from the TAF’s MPAC calculated for the Appellant in his evidence to the Board. The Appellant reports that the difference in these TAF’s can create a difference of $20,000 in the TAJ sale price on a same property.
Correct Current Value
10The Board is to find a correct current value for the subject property for the 2013 and 2014 taxation years that is equitable with the assessments of similar lands in the vicinity.
DECISION
11The Board finds that the current value of the subject property is $1,078,000 for the 2013 and 2014 taxation years.
12The Board finds that the evidence does not support a finding that the assessment of the subject property should be reduced below the current value to make it equitable with the assessments of similar properties in the vicinity.
13The decision of the Board is to confirm the assessment from $1,078,000 for the 2013 and 2014 taxation years.
REASONS FOR DECISION
The Legislation
14The Board is directed by the following sections of the Assessment Act (“Act”):
15Section 19.(1) of the Act states:
19.(1) Assessment based on current value. – The assessment of land shall be based on its current value.
16Current value is defined in section 1:
“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.
17Section 19.2(1)2 of the Act states:
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:
For the period consisting of the four taxation years from 2009 to 2012, land is valued as of January 1, 2008.
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.
18Section 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.
Regarding Time Adjustment Factors
19Sales are commonly adjusted by a party to reflect market conditions as of a specific valuation date (in this case January 1, 2012). The Board may accept these TAJ sale values if/when convinced that the TAF’s used to arrive at a TAJ value are based on an adequate amount of sales within a timeframe that is not too far reaching from the actual valuation date. The Board considers sales within one year before or after the valuation date as reasonable to be adjusted to reflect market conditions as at a specific valuation date. The Board can expand the one year criterion when necessary to have a suitable sampling of similar properties for a comparison to determine correct current value.
20The Board finds that the difference between the TAF’s calculated in MPAC’s evidence and the TAF’s calculated in the Appellants evidence is due to the fact that MPAC TAF’s are based on 130 sales during a 13 month period, June 2011 to June 2012 (Exhibit 1) and the Appellants TAF’s are based on 490 sales during a 49 month period, July 2008 to July 2012 (Exhibit 5). It is the opinion of the Board that a four year span of sales starting from July 2008 may be influenced by market conditions that are not as common to the more current market as at January 2012. The difference therefore is justified by the extreme difference in the data used to calculate the TAF’s.
21The Board notes that there is nothing in the Act that directs it to use TAJ sale dates. The Board determined that because there is an adequate sampling of similar properties in evidence with actual sales dates within a reasonable time before and after the valuation date, that no TAJ sale values would be used to determine a correct current value.
Regarding Variable Adjustment Factors
22Mr. Hasratian argues that MPAC has failed to consider negative factors that impact the value of his property: proximity to railroad tracks and proximity to community housing. He submits an MPAC “Coefficients” table (Exhibit 8) with factors for making adjustments to a CVA for various positive and negative influences. He notes that MPAC has failed to apply these factors that would reduce his CVA.
23Mr. Li responds that the subject property is not eligible for any adjustment as the railroad tracks and the community housing are too far removed from the subject. He submitted an aerial map (Exhibit 2) to illustrate this.
24The Board finds that the subject property is too far from the railroad tracks and community housing to receive an adjustment to lower the value of the property. The Board notes that when looking at the sales of similar properties in the same neighbourhood or vicinity of the subject, it is under the assumption that any negative or positive influence of factors related to a neighbourhood as a whole, would be reflected in the sales. Therefore, any current assessment based on these sales would consider the same influences.
Regarding Section 44.(3)(a) – Current Value
25To determine a correct current value, the best evidence is an arm's length sale of the subject property on or near the valuation date of January 1, 2012. If there is no such transaction on the subject property, the Board looks to the sales of similar properties in the vicinity to determine if the sales evidence suggests that a current value requires correction. For the Board’s purposes, “similar” relates to design, size, age, amenities, condition, construction and so forth.
26With no current sale on the subject property, the Board looked to the sales of suggested comparable properties submitted in evidence. In this case, both MPAC and the Appellant submitted suggested comparable properties with TAJ sales.
27Mr. Li submitted a “Market Analysis” report (Exhibit 1) consisting of nine suggested comparable properties with actual sales from June 2011 to June 2012.
28Mr. Hasratian submitted a “Market Analysis” report (Exhibit 5) consisting of seven suggested comparable properties with actual sales from July 2008 to July 2012.
29As stated above the Board is not using the TAJ sales provided on each party’s suggested comparable properties included in their Market Analysis submissions. The Board therefore chose only those actual sales within six months before and after the January 1, 2012 valuation date.
All of MPAC’s suggested comparables met this criterion.
Only two of the Appellant’s suggested comparables met this criterion: 10 Glenworth Road and 16 O’Meara Court.
30From the remaining properties the Board considered properties that properties built in 2000 or later, 20 years newer than the subject were not similar enough for a comparison of current value.
This eliminated all of MPAC’s suggested comparables on Green Meadows Circle.
This eliminated the Appellant’s suggested comparable of 10 Glenworth Road.
31The Board looked to the following suggested comparables as similar enough to the subject and with sales on or near the valuation date of January 2012 to be the best evidence to determine a correct current value (Table 1):
Table 1: Comparable Properties based on Year Built (1980's) and with Sales on or near the Valuation Date of January 2012
Subject: 10 O’Meara:
1980
CVA: $1,078,000
8,075
3,746
Submitted By:
Address
Actual Sale
Year Built
Sale Price
Lot Size*
BTA*
MPAC
5 Lisburn
2012/06
1989
$1,060,000
6,050
3,585
BOTH
16 O'Meara
2011/08
1980
$975,000
5,940
3,359
MPAC
29 Cobblestone
2012/01
1980
$945,000
6,026
3,047
MPAC
31 Cobblestone
2011/12
1980
$935,000
6,051
3,121
*Expressed in square footage.
32The above shows a range in value of the suggested comparables to be from $935,000 to $1,060,000. The Board notes that with the subject property having a considerably larger lot and a larger building size compared to the suggest comparables, it is reasonable that the subject’s CVA would be higher than $1,060,000.
33To determine if a CVA of $18,000 higher than $1,060,000 is fair or reasonable the Board did a comparison of the subject to two suggested comparable properties by lot size, BTA and sales value, to the subjects lot size, BTA and CVA. This test, using the highest valued property and a property that sold on the valuation date of January 2012.
Table 2: Comparison of the Subject’s larger lot size and BTA versus the increase in the CVA to Comparable Properties Sale Price
Address
Actual Sale
Year Built
Lot Size*
BTA*
CVA Sale Price
Subject:
10 O’Meara
n/a
1980
8,075
3,746
$1,078,000
Comparable:
5 Lisburn
2012/06
1989
6,050
3,585
$1,060,000
Difference (Subject less Comparable):
2,025
161
$ 18,000
Subject greater than comparable by approximately:
25%
4%
2%
Address
Actual Sale
Year Built
Lot Size*
BTA*
CVA Sale Price
Subject:
10 O’Meara
n/a
1980
8,075
3,746
$1,078,000
Comparable:
29 Cobblestone
2012/01
1980
6,026
3,047
$ 945,000
Difference (Subject less Comparable):
2,049
699
$ 133,000
Subject greater than comparable by approximately:
25%
19%
12%
*Expressed in square footage
34From the above the Board considers the difference in CVA to the sale prices of the comparables is not unreasonable compared to the differences in the lot size and BTA. Therefore the Board finds $1,078,000 to be a fair and reasonable CVA.
35The Appellant submitted a calculation of the “average sale” of his suggested comparable properties (Exhibit 7). As these sales values were time adjusted sales and the Board had already determined not to consider TAF's (and calculated results) this submission was not helpful to the Board in determining a correct current value.
Conclusion Regarding Current Value
36The Board finds the correct current value of the subject property is $1,078,000.
Regarding Section 44.(3)(b) - Equity
37The Board having determined current value, is then required to have reference to the assessment of similar properties in the vicinity and to reduce the assessment of the subject property, if required, to make it equitable with their assessments. 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.
38A comparison of the assessment to the sale amount gives an assessed value to sale ratio ("ASR") which may be used as a test of the method used to determine the property’s assessment value. If sales are similar in nature, e.g. single family homes, and are in the same homogeneous neighbourhood, the Board may infer that MPAC has used the same assessment methodology for the subject property as it did with the properties presented in evidence. Therefore, the review of the average ASR’s may indicate whether MPAC may be under of over-assessing the area. An ASR of less than 1.00 indicates that MPAC’s methodology may be producing values less than the values expressed in the marketplace (e.g. sales). Conversely, an ASR greater than 1.00 indicates that MPAC’s methodology may be producing values greater than the values expressed in the market place.
39MPAC's submissions included an Equity Analysis for the subject property (Exhibit 3). This analysis, including a sampling of 30 sales in the vicinity shows a median assessment to time adjusted sale ratio to be 0.98. Mr. Li concludes that this evidence shows that MPAC is equitably assessing the subject and other properties in the vicinity.
40The Appellant provided a listing of Sales for Price Change over Time (Exhibit 6) that included an ASR based on the time adjusted sales values. This report shows an average ASR for two groups of sales data. One group shows an average ASR of 0.9656 and the second group shows an average ASR of 1.031. From this submission the Board did not find that MPAC is over assessing properties in the neighbourhood.
41Accordingly, the Board finds that there is no evidence before it leading to the conclusion that the current value of the subject property, as determined above requires a further adjustment in accordance with s. 44.(3)(b) of the Act.
42Therefore, the Board confirms the assessment of the subject property of $1,078,000 the 2013 and 2014 taxation years.
2015 DEEMED APPEAL
43An appeal for the 2013 and 2014 taxation years 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.
44Section 40.(26) of the Act directs:
40.(26) 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.
“Sandra Driesel”
SANDRA DRIESEL
MEMBER
Assessment Review Board
A constituent tribunal of Environment and Land Tribunals Ontario
Website: www.elto.gov.on.ca Telephone: 416-212-6349 Toll Free: 1-866-448-2248