Eisner v Municipal Property Assessment Corporation Region 09 2015 OARB mini 133

Assessment Review Board

ISSUE DATE: August 26, 2015 FILE NO.: WR 127890

Assessed Person(s): Silvia Eisner and John Eisner Appellant(s): John Eisner Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 09 Respondent(s): City of Toronto

Property Location(s): 34 Prattley Drive Municipality(ies): City of Toronto Roll Number(s): 1908-112-473-05000-0000 Appeal Number(s): 2986820, 3017281 and 3076917 (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
J. Eisner	Self-represented
MPAC	Chin-Wei-Li
City of Toronto	No one appeared

DECISION OF THE BOARD DELIVERED BY SANDRA DRIESEL

INTRODUCTION

1The Appellant John Eisner is self-represented.

2MPAC reports the subject property is a 1965 year built, single detached, 1-storey house. The building total area is 1,306 square feet. It has a finished basement area of 628 square feet. The total basement area of 1,234 square feet includes a 480 square foot basement garage. The site has an effective site of 6,369.75 square feet and MPAC is assessing an effective frontage of 57 feet with an effective depth of 111.75 feet. Mr. Eisner agreed with this description of the property (Exhibit 1) with the clarification that part of the basement is designated to the garage, as noted above.

3As a result of the Request for Reconsideration (“RFR”) process, MPAC offered the Appellant a reduction of $3,000 through minutes of settlement. Mr. Eisner did not accept this offer. MPAC did, however, reduce the assessed value as returned on the roll for the 2014 taxation year to $664,000 from $667,000.

4Mr. Li notes that he inspected the property in preparation for the hearing. This was in response to the Appellant’s issue that the condition of his property should considerably reduce his current value assessment (“CVA”). As a result of this inspection, he offered to reduce the CVA by $20,000 from $664,000 to $644,000. Mr. Eisner rejected this reduced CVA believing a more correct value for his property should be approximately $560,000 - $570,000.

5Mr. Li states that submissions including a “Market Analysis” with time adjusted (“TAJ”) sales on 13 suggested comparable properties, support MPAC's position that the property is reasonably assessed at $644,000.

6He also reports that the Assessment to Sale Ratio ("ASR") analysis for 30 sales in the area shows that the subject property is equitable assessed and no equity adjustment is required.

7Mr. Eisner argues that MPAC has not assessed his property correctly because they have failed to consider the lack up upgrades/condition of his home, including:

• 50 year old windows
• Plumbing work required
• Driveway not maintained since 1982 purchase
• 22 year old roof
• 16 year old furnace
• Outdated electrical system
• Considerable cracking in the walls and ceilings.

8Mr. Eisner adds that MPAC’s suggested comparable properties are in better condition to his and would therefore realize much higher sales values than his property if it were put up for sale at the same time.

9The Appellant also has an issue with the distance of MPAC’s suggested comparable properties to the subject. He notes that the seven properties that he used in a CVA value per square foot analysis and his six suggested comparable properties with sales are all closer to the subject property.

10Mr. Eisner has an issue with the TAJ sales used by MPAC in their market analysis. He argues that the time adjustment factors (“TAFs”) used by MPAC are not as correct as the TAF’s used by the Ontario Real Estate Association (“OREA”) Home Price Index (“HPI”). He notes that if the OREA HPI TAFs were used on MPAC’s suggested comparables the calculated TAJ sales values for these properties would be significantly lower.

11The Appellant did not present any argument or evidence regarding equity.

ISSUES

Adjustment(s) for the Condition of the Subject Property

12Has MPAC made an adequate or correct negative adjustment to the subject property for its condition?

Time Adjustment Factors

13The Appellant questioned MPAC’s TAF's and believes that the TARs from OREA HPI are more correct.

Correct Current Value

14The Board must determine 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

15The Board finds that the current value of the subject property is $644,000 for the 2013 and 2014 taxation years.

16The Board finds that the evidence does not support a finding that the assessment of the subject property should be reduced below the current value as determined above to make it equitable with the assessments of similar properties in the vicinity.

17The decision of the Board is to reduce the assessment of the subject property as follows:

a. From $667,000 to $644,000 for the 2013 taxation year, and b. From $664,000 to $644,000 for the 2014 taxation year.

REASONS FOR DECISION

The Legislation

18The Board is directed by the following sections of the Assessment Act (“Act”):

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

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

20Current value is defined in s. 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.

21Section 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:

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.

22Section 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 Adjustment(s) for the Conditions of the Subject Property

23The Appellant failed to provide any evidence to quantify or measure the impact of any negative conditions of his property on his CVA. The Board will therefore accept the adjustments made by MPAC of minus $20,000.

Regarding Time Adjustment Factors

24Sales 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 TAFs 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.

25MPAC’s TAFs are calculated based on 230 sales in the subjects’ property neighbourhood and adjacent neighbourhood(s) during a 23 month period, January 2011 to November 2012 (Exhibit 2). Mr. Li has stated that these are all similar residential properties. The Board could accept these TAFs as meeting an acceptable criterion with a confidence that they are similar property types in or near the same homogeneous neighbourhood.

26The OREA HPI TAFs submitted by the Appellant are lacking in the detail the Board requires to determine if these factors are based on criterion that it would/could accept as a correct. The Appellant submitted a comparison of difference TAFs (Exhibit 8). This clearly illustrates how the data used to calculate TAFs: the amount of data, the time period covered etc. effect the resulting factor.

27The 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 Section 44.(3)(a) – Current Value

28To 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.

29With 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.

30Mr. Li submitted a “Market Analysis” report (Exhibit 2) consisting of 13 suggested comparable properties with actual sales from January 2011 to November 2012.

31Mr. Eisner submitted a “MPAC Recent Sales” report (Exhibit 5) consisting of six suggested comparable properties with actual sales from January 2011 to November 2011. These sales were also reference in his Market Analysis report, attached to his TAF samples (Exhibit 8B).

32Mr. Eisner also submitted a “Nearby Comparables” report (Exhibit 5) with seven properties (without current sales). On this report he has compared the CVA per square foot of each property, to the CVA per square foot of the subject. The Board does not find the report to be helpful in determining a correct current value for the following reasons:

a. These properties did not have current sales. b. Closeness to the subject does not make a property more suited to comparison to the subject when trying to determine a correct current value. The Act does not define “vicinity”. Typically the Board looks for a handful of “similar” properties, with sales on or near the valuation date, by starting with properties closest to the subject. If the Board cannot find enough similar properties we can expand to other streets or areas until it has enough to compare to the subject property. c. A comparison of a CVA per square foot analysis (CVA divided by the building total area (“BTA”)) is not an accurate test of a correct current value. Again, the Board looks to sales of similar properties to make a finding of a correct current value.

33As 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 one year before and after the January 1, 2012 valuation date. The sales presented by both MPAC (Exhibit 2) and the Appellant (Exhibit 8B) met this criterion.

34The Appellant submitted MLS listings (Exhibit 7) to confirm that the following MPAC suggested comparable properties were sold with significant upgrades and are therefore not similar to the subject property. The Board therefore eliminated these properties from its test to determine a correct current value:

a. Sale A: 20 Goodview Road b. Sale C: 26 Bellbury Crescent c. Sale G: 94 Nymark Avenue d. Sale K: 91 Glenworth Road

35The Board also considered that properties with outdoor pools were not similar enough for a comparison to the subject in a test to determine a correct current value. This eliminated two of MPAC’s suggested comparables:

a. Sale D: 71 Lesgay Crescent b. Sale E: 2 Bellbury Crescent

36The Board determined that two properties submitted by the Appellant were not similar to the subject property as they were much larger, 2-storey homes: 16 Prattley Drive and 10 Prattley Drive.

37The Board looked to the following suggested comparables as sufficiently similar 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 a Range of Actual Sales within one Year of the Valuation Date of January 2012:

Submitted By:	Address	Actual Sale	Year Built	Sale Price	Lot Size*	BTA*
Subject:	34 Prattley Drive		1965	CVA: $644,000	6,369.75	1,306
MPAC	140 Shaugnassy	2012/11	1962	$660,000	6,240.00	1,259
MPAC	146 Shaugnassy	2012/09	1962	$644,000	6,240.00	1,270
BOTH	150 Shaugnassy	2011/11	1962	$615,000	6,958.00	1,296
BOTH	98 Nymark	2011/07	1965	$610,000	6,333.64	1,209
BOTH	43 Goodview	2011/01	1965	$545,000	6,025.00	1,365
BOTH	64 Bellbury	2011/01	1965	$520,000	6,205.20	1,291

*Expressed in square footage.

38The above shows a range in value of the suggested comparables to be from $520,000 to $660,000. The recommended CVA of $644,000 falls within this range of values.

39To determine if the subject CVA is correct in being near the higher range of sales values the Board looked to a comparison of the range of the effective lot sizes and the range of BTA’s (Table 2):

Table 2: Range of Values Compared to the Subject Sizes and Recommended CVA of $644,000:

Comparable Properties Range versus the Subject:
Range in lot size:*	6,025.00	6,205.20	6,240.00	6,240.00	6,333.64	6,958.00	Subject= 6,369.75
Range in BTA:*	1,209	1,259	1,270	1,291	1,296	1,365	Subject= 1,306
Range in Sales Values:	$520,000	$545,000	$610,000	$615,000	$644,000	$660,000	Subject CVA= $644,000

*Expressed in square footage

40From the above the Board considers it is reasonable for the subject CVA to be near the higher range of sales values. Therefore the Board finds $644,000 to be a fair and reasonable CVA.

Conclusion Regarding Current Value

41The Board finds the correct current value of the subject property is $644,000.

Regarding Section 44.(3)(b) - Equity

42The 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.

43A 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 ASRs 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.

44MPAC’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 1.00. Mr. Li concludes that this evidence shows that MPAC is equitably assessing the subject and other properties in the vicinity.

45The Appellant did not provide any evidence or argument regarding equity.

46Accordingly, 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.

47Therefore, the Board reduces the assessment of the subject property as follows:

a. From $667,000 to $644,000 for the 2013 taxation year, and b. From $664,000 to $644,000 for the 2014 taxation year.

2015 DEEMED APPEAL

48An 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.

49Section 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.

Footnotes

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