Mahn v Municipal Property Assessment Corporation, Region 31, 2015 OARB minicounsel 140

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: August 31, 2015

FILE NO.: WR 133036

Assessed Person(s): Kenneth Franklin Anstice, Evelyn Irene Anstice and Michael Laurance Mahn

Appellant(s): Mike Mahn

Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 31

Respondent(s): St. Joseph Township

Property Location(s): Con H Lot 11PT RP 1R4560

Municipality(ies): St. Joseph Township

Roll Number(s): 5708-020-000-50302-0000

Appeal Number(s): 2991857, 3030235 and 3093684 (deemed 2015)

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

Hearing Event No.: 591132

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

Heard: June 17, 2015 in Sault Ste. Marie, Ontario

APPEARANCES:

Parties Counsel⁺/Representative

Mike Mahn Kenneth Franklin Anstice Self-represented

MPAC Antonietta Romano-Bitonti

St. Joseph Township No one appeared

DECISION OF THE BOARD DELIVERED BY TYRONE D. SKANES

INTRODUCTION

1The appeal before the Assessment Review Board ("Board") is an appeal by Mike Mahn and Kenneth Anstice in respect of the assessment of vacant land located at Con H Lot 11PT RP 1R4560, St. Joseph Township (subject property) for the 2013 and 2014 taxation years.

2The subject property is described as a multiple use vacant lot measuring 39.78 acres, situated in a desirable country setting that is suitable for residential or recreational use. There is an effective frontage of 1,301.63 feet ("ft") and an effective depth of 1,331.26 ft. There is year round road access and hydro is available.

3Mr. Mahn, representing himself and his father- in- law, Mr. Anstice, agreed that the description was essentially correct but disagreed with the multiple use description.

4Antonietta Romano-Bitonti, representing MPAC, testified that the returned assessment for 2013 was $46,000 and for 2014 it was $40,500. Ms. Bitonti advised that a Request for Reconsideration (“RFR”) was filed in 2013 and that a negative 12% market adjustment had been applied, reducing the assessment from $46,000 to $40,500. This adjusted offer was recommended to the Appellants but it was refused. Regardless of this rejection, MPAC reduced the assessment to $40,500 for the 2013 taxation year. Ms. Bitonti said that this increase was only $1,000 higher than the 2008 valuation and she considered it to be fair and reasonable. She was asking the Board to reduce the assessment to $40,500 from $46,000 for the 2013 taxation year and confirm it at $40,500 for the 2014 taxation year, in the residential tax class.

5Mr. Mahn said that he disagreed with the value offered by MPAC and opined that the land was worth no more than $20,000 and was asking the Board to reduce it to that value.

ISSUE

6The issue before the Board for determination is whether the assessment of the subject property for the 2013 and 2014 taxation years is at current value and whether the assessment is equitable with the assessment of similar lands in the vicinity.

DECISION

7The Board is required by s. 44.(3)(a) of the Assessment Act (“Act”) to determine the current value of the land and have reference to the value at which similar lands in 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.

8The Board finds that the current value of the subject property as of January 1, 2012, is $28,000 (rounded) and that amount is inequitable with the assessments of similar properties in the vicinity. The inequity is such that the subject property is assessed lower than similar properties in the vicinity. The Board cannot make it equitable because s. 44(3) (b) of the Act only permits an equity adjustment if such an adjustment would result in a reduction of the assessment.

REASONS FOR DECISION

Relevant Legislation

9Section 19.(1) of the Act states:

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

10Section 1 of the Act states:

“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 19.2(1)3 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.

12Section 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.

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.

MPAC's Position and Evidence

15Ms. Bitonti's valuation report was entered into evidence as Exhibit 1. She testified that the direct sales comparison approach to value was used in determining the current value of the subject property. That approach uses the sales of comparable properties to determine current value. Ms. Bitonti also introduced a Price Change over Time analysis where the sales of 480 residential properties (not necessarily vacant lots) from the area were examined between January 2009 and December 2012. That study suggests that the local residential market increased by 18.8% during this time period. The assessor said that this analysis was used to establish Time Adjustment Factors (“TAF”), found in Exhibit 1, centred on the valuation date of January 1, 2012, thereby allowing sales prices of the comparable properties to be time adjusted ("TAS") to the valuation date.

16Ms. Bitonti testified that she used the sales of five similar lands in the vicinity as comparators to the subject property. She stated that despite the comparable properties being larger than the subject property she believed they were good comparators as they were all in the same neighbourhood and all were multiple use vacant lands. She said that she believed that Sale D was the most comparable to the subject property as it sold within one month of the valuation date, it was in close proximity to the subject property and its TAS price was $51,090.

17Ms. Bitonti said that she believed that the offer of $40,500 for both tax years was fair and equitable and asked the Board to reduce it to that level for the 2013 taxation year and confirm it for the 2014 taxation year.

Equity

18Ms. Bitonti entered an equity study into evidence whereby she examined the sales of 30 residential properties located within 9.57 kilometres ("kms") of the subject property between January 2008 and December 2012. She said that the median ASR returned at 0.98 and this indicated to her that similar lands in the vicinity are being assessed at their correct current values and that no adjustment was required for equity.

19On cross examination Mr. Mahn asked Ms. Bitonti to explain why all of the comparable properties, except Sale E, were assessed at $50,000. She said that it was primarily based on lot size. She explained that the value of the land was usually based on the first few acres. Mr. Mahn asked Ms. Bitonti if she knew how much of the subject property was buildable and she said she did not know. She said that she conducted an inspection and it was her opinion that it was buildable.

Appellants Position and Evidence

20Mr. Mahn advised that he did not have any documentary evidence to present. He stated that once you proceed further into the subject property from the roadway the elevation begins to drop and there are sections of the land that are wetlands. Mr. Mahn was of the opinion that nothing more than a single dwelling could be built on the land.

21Mr. Mahn also said that it was his belief that lands ought to be valued on a per acre cost. He calculated the average cost of MPAC's five comparable properties to be $459.45 per acre and then applied this value to the 39.78 acres of the subject property to arrive at a value of $18,276.92. Mr. Mahn concluded by asking the Board to reduce the assessment of the subject property to $20,000.

22On cross examination Ms. Bitonti asked Mr. Mahn if properties adjoining the subject property had any dwellings on them and he said that he believed the property to the south had a house. Ms. Bitonti said that MPAC records showed that two other properties had residences on them and Mr. Mahn said he could not dispute that.

23The Board asked Mr. Mahn to clarify how much of the property was wetland and he admitted that he did not know. He was asked if he knew how much of the land was buildable and he admitted that he did not know, as he had never had a survey done.

Summation of the Parties

24Ms. Bitonti summed up her argument by saying that the cost per acre put forward by the Appellant was not valid because the more acres that are sold, the cost per acre actually diminishes. She believes she presented the best evidence, as the Appellant had presented none, and asked the Board to reduce the assessment to $40,500 from $46,000 for 2013 and confirm it at $40,500 for 2014.

25Mr. Mahn stated that he could not understand that, if one acre of land is worth between $30,000 to $33,000, someone can buy 100 acres for less than one acre. He said that the subject property has wetlands and parts of it has trees blown down. He admitted that he could not provide accurate measurements of exactly how much land is unusable. He said that the subject property is not worth the assessed value of $40,500 and was asking the Board to reduce it to $20,000.

Board's Deliberations - Current Value

26The Board has carefully considered the testimony of the parties and the documentary evidence. When considering comparable properties, the Board does not expect exactness or sameness nor does the legislation require it. Therefore, the Board looks at similarity of characteristics, amenities and location to determine comparability. With vacant land, the Board looks to lot size and particularly road frontage.

27The Board usually considers sales of comparable properties that have occurred within one year on either side of the valuation date as the ideal time period for consideration. All the sales occurred with this time period with the exception of Sale E, which occurred in 2010. The Board occasionally does extend the time period for considering comparable properties when the parties have demonstrated that there were an insufficient number of relevant sales during the ideal time period. However, that is not the case in this instance. MPAC submitted four sales within one year of the valuation date. That amount is sufficient to do a sales analysis. Consequently, the Board excludes Sale E from consideration, as that sale occurred more than a year from the valuation date.

28All the sales are in the same neighbourhood as the subject property and are, in fact, in close proximity to the subject property. The lot sizes of the comparable sales are substantially larger than the subject property but the Board does not find this a sufficient reason to exclude them from consideration. The Board is of the view that roadway frontage is an important consideration when assessing land. In this instance, the frontage measurements of the comparable sales compare favourably with the subject property, in that Sale A has the greatest variance, being a mere 32.05 ft wider. Of lesser consideration is the Lot size but it is an element that the Board must take into consideration comparing the subject property to the sales comparables.

29Mr. Mahn did not submit any documentary evidence but chose to centre his argument on the cost per acre and how this should be the guiding principle for assessing the subject property's true value. However, he did not submit any documentation to support this argument, regarding what an acre of land is worth in St. Joseph Township and how that value relates to what a fair assessment ought to be. Therefore, the Board cannot accept this argument.

30The Board notes that the assessed value of the subject property, at $40,500, is within the range of the TAS prices and is lower than the assessed values of all four properties. In considering whether the assessment of $40,500 is fair and reasonable the Board considered the subject property's lot size and frontage and compared them to that of the sales comparables as shown in Table 1 above.

TABLE 1

Property	Assessment	Lot size "Acres"	Frontage "Feet"	TAS Price
Subject Property	$40,500	39.78	1,301.63	N/A
Sale A	$50,000	100.57	1,333.68	$27,866
Sale B	$50,000	97.33	1,290.62	$29,024
Sale C	$50,000	85.35	1,321	$70,364
Sale D	$50,000	100	1,320	$51,090

31The Board is of the view that the subject property is inferior to the sales comparables because it has significantly less lot size. Therefore, a fair and reasonable estimation of the subject property's current value is found at the low end of the sales comparables range of values as shown in the diagram below. Consequently, the Board finds that the subject property's current value is $27,866 or $28,000 (rounded).

32The Board notes that MPAC stated that their recommended assessment of $40,500 is only $1,000 greater than that of the returned assessment for the previous assessment period. The Board has often been presented with similar pleadings from appellants who argue that their returned assessments are inordinately high compared to the previous assessment cycle. In responding to these submissions, the Board has stated that it does not look at the returned assessments from previous assessment cycles to determine current value. It must determine current value according to the provisions of the Act, and the date the land is valued for the 2013 to 2016 taxation years, is January 1, 2012. The Board would also have to inform the appellants that it may be that the previous returned assessment was too low or that the demand for similar lands has markedly increased since the last assessment cycle. Similarly, the Board addresses MPAC's observation that the recommended assessment has only increased by $1,000 over the previous assessment cycle, by stating that: A) the Board must determine current value according to the provisions of the Act and, B) perhaps the returned assessment was too high in the previous assessment cycle and/or, the market demand in this assessment cycle has decrease for lands similar to the subject property.

Range of Values

Sale A $27,866

Sale B $29,024

Sale D $51,090

Sale C $70,364

Board's Deliberations - Equity

33MPAC entered an equity study into evidence that revealed a median ASR of 0.98. This indicates that MAPC is assessing vicinity lands at current value. Notwithstanding this study that went unchallenged by the appellants, the Board notes that the assessed value of the sales comparables shown in Table 1 above is $50,000. Compared to these sale comparables, the subject property is inequitably assessed. The inequity is such that the subject property is assessed much lower than similar properties in the vicinity. The Board cannot make it equitable because s. 44(3) (b) of the Act only permits an equity adjustment if such an adjustment would result in a reduction of the assessment.

CONCLUSION

34The Board finds that the current value for the subject property is $28,000 (rounded). Furthermore, the subject property's current value may be inequitable with the assessment of similar lands in the vicinity but the Board cannot make it equitable because s. 44(3) (b) of the Act only permits an equity adjustment if such an adjustment would result in a reduction of the current value assessment.

35Therefore, the assessment of the subject property is reduced from $46,000 to $28,000 (rounded) for the 2013 taxation year and reduced from $40,500 to $28,000 (rounded) for the 2014 taxation year, in the residential tax class.

2015 DEEMED APPEAL

36An appeal for the 2014 taxation year 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.

37Section 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.

Footnotes

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