Assessment Review Board

Commission de révision de l'évaluation foncière

ISSUE DATE: September 4, 2015

FILE NO.: WR 133588

Assessed Person(s): Catherine Joy Greven and Robert Geoffrey Julian

Appellant(s): Catherine Joy Greven and Robert Geoffrey Julian

Respondent(s): Municipal Property Assessment Corporation ("MPAC") Region 17

Respondent(s): Township of Lake of Bays

Property Location(s): Con 7 Lot 9 Plan M34 Lot 10

Municipality(ies): Township of Lake of Bays

Roll Number(s): 4427-020-008-09600-0000

Appeal Number(s): 3061253 and 3088305

Taxation Year(s): 2014 and 215

Hearing Event No.: 587146

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

Heard: July 8, 2015 in Dwight, Ontario

APPEARANCES:

Parties	Counsel+/Representative
Catherine Joy Greven and Robert Geoffrey Julian	Self-represented
MPAC	Michele D'Andrea
Township of Lake of Bays	No one appeared

DECISION OF THE BOARD DELIVERED BY LESLIE FLEMMING

INTRODUCTION

1These appeals were heard at Dwight, Ontario, on July 8th, 2015. The decision was reserved.

2The subject property is a 1.25 acre lot of uncleared land located on the shores of Rebecca Lake in the Township of Lake of Bays, classified by MPAC as residential/recreational land on water. The Appellants, Catherine Joy Greven and Robert Geoffrey Julian, described themselves as members of the Julian Family Trust, and as such inherited this property along with others in the vicinity. The evidence of the Appellants is that the property is not accessible by road, and due to recent building restrictions placed on Rebecca Lake, the lot is not able to be built upon. In addition, the severance of this particular lot, carried out in 1995, was incorrectly registered, which may have the effect of voiding the severance. Evidence adduced by the Appellants verified that this problem was unresolved at the time of the hearing. The Appellants introduced an appraisal of the subject property carried out in 2014 which sets a value for this property of $35,000. The Appellants would like to see their assessment reduced accordingly.

3MPAC, represented by Michelle D'Andrea, has recommended the reduction of the assessment as returned from $256,000 to $128,000 for the 2014 and 2015 taxation years. Ms. D'Andrea based her recommendation on the sales of comparable properties in the vicinity.

ISSUES

4The issues to be determined by the Assessment Review Board ("Board") are:

(a) What is the correct current value of the property as at the valuation day, January 1, 2012; and

(b) Having reference to the assessed values of similar lands in the vicinity, should the assessment be reduced if such an adjustment would make it equitable with the assessments of similar lands in the vicinity?

DECISION

5The Board finds that the current value of the subject property is $56,000 (rounded).

6The Board finds that the evidence does not support a conclusion that the current value of the property as determined above requires a reduction in order to make it equitable with other properties in the vicinity.

7Accordingly, the assessment of the subject property is reduced to the amount of $56,000 for the 2014 and 2015 taxation years.

REASONS FOR THE DECISION

8The Board must first determine the current value of the subject property. Section 1 of the Assessment Act ("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.

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 19.2(1) of the Act provides:

19.2(1) Valuation days – 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.

11The best measure of current value is an arm's length and market-tested sale of the subject property on or close to the valuation day of January 1, 2012. If no such transaction took place, a further measure of current value is derived from the arm's length and market-tested sales of comparable properties in the same vicinity and market. This measure acts as a benchmark and gauge of the correctness of the assessed value of the subject property.

12Seasonal/recreational properties on water are almost always unique, which makes finding comparable properties difficult. The best comparable properties will have similar-sized frontages and lots. As much as possible, they will have similar topographies and accessibility (by road or water). In these cases, comparable sales evidence usually helps establish a range of values, some higher and some lower than the subject, which will either serve to confirm the assessment or will instead illustrate why it is incorrect.

13All the participants affirmed the truthfulness of their evidence. Ms. D'Andrea filed Exhibit 1, the Valuation Report for the subject property. Ms. D'Andrea referenced the property profile, which was confirmed as being accurate by the Appellants. The property is 1.25 acres in size; the effective frontage is 205 linear feet. No recent arm's-length sales of this parcel are available as a means of determining the current value.

14Ms. D'Andrea provided four comparable sales of vacant residential lands on water. Three of her four sales occurred within one year of the valuation day - January 1, 2012. The fourth sale occurred in September, 2009, which is simply too far removed from the valuation day to offer meaningful comparisons for this appeal. The Board prefers sales as close as possible to the valuation day in order to minimize the impact of market fluctuations.

15The Appellants introduced Exhibit 2, which was a hand-drawn map of Fieldale Road (the seasonal road nearest to the property), showing the location of the subject property and the surrounding lots. They introduced Exhibit 4, which was an appraisal by Kristina Smith dated March 24, 2014, as of February, 2014. The appraisal describes three comparable sales. One of those comparable sales took place in 2007 and a second in December, 2009. Both of those comparisons are more than two years away from the valuation day and are not current enough with the valuation day to provide assistance to the Board.

16Before looking at the remaining four comparative sales, it is important to recount some of the factors affecting the subject property as contained in the testimony of the Appellants and in their exhibits, particularly Exhibit 3, a letter from Marcia Julian to Jeffrey Stone of Stone and Osborne dated April 15, 2015. The contents of the letter serves to set out some of the history of the parcel in question, including its present situation respecting an incomplete severance.

17The important facts that emerged from the testimony and exhibits which ultimately affect value are these:

• The property is accessible by water only for the reason that access from Fieldale Lane, a seasonally-maintained road only, requires the consent of abutting neighbours. Consent has been withheld. Ms. Greven testified that access by road is not possible.
• Rebecca Lake has been deemed "lake trout sensitive" according to Ms. Greven, a fact which was not disputed by Ms. D'Andrea. Ms. Greven testified that building on a lot abutting the lake is now only permitted when the parcel has waterfront of 500 feet. This parcel is too small and is therefore "unbuildable" in the Appellants' opinions.
• A severance of lots 13 and 14 took place in 1995. According to the Appellants, while the severance and resulting transfer were registered on title in June, 1997, the Certificate approving the severance, issued by the Committee of Adjustment, was not registered within the two-year time frame required by the Planning Act. An opinion from the Lake of Bays planning department staff obtained by the Appellants indicates that a new consent must be obtained and registered, or, alternatively, a by-law validating the transfer must be passed. At the time of hearing, the Appellants had not resolved their dispute with the lawyer who had originally handled this matter.

18In weighing the factors that affect value, the Board must be conscious of the effect of the factors on the potential purchaser of the subject property in an arm's length transaction. In this case, the legal issues surrounding this property may be resolved through one or more steps which provide a nuisance and expense to the Appellants, but which do not provide an insurmountable or long-term impact on the value of the land. While the Appellants stressed the legal problems ahead of them in respect of the severance issue, they failed to provide the Board with an indication of the cost of such steps. As a result, the Board is unable to adjust the value of the property based on potential future costs to correct the problem.

19The other issues affecting this property affect its value in a more substantive way. The lack of access by road, while ostensibly correctible by obtaining the consent for access from the abutting neighbours, is a more significant issue. Road access is a desirable amenity with respect to recreational properties on water, and the absence of road access detracts from the value of this property. Ms. D'Andrea was unaware of the problem accessing the property and did not assess it as water-access only.

20Ms. Greven testified to the fact that there were in fact two restrictions on building on the subject property. One is related to the environmental protections imposed on Rebecca Lake respecting the lake trout population as noted above. The second was a shoreline restriction she described as the "logging boom chain restriction". Unfortunately, neither Ms. Greven nor Mr. Julian provided particulars as to the long-term effect of this restriction in respect of the subject property, which makes it difficult to apply a value to this restriction.

21In this case, the four comparable properties sold within one year of the valuation day are quite different. Ms. Smith, the appraiser, selected only "non-buildable waterfront properties" such as the subject property. By contrast, none of MPAC's comparables are classified as "non-buildable" properties.

22The following chart sets out the main items for comparison between the properties. Because time adjustments were not applied to the comparable sale from the appraisal, and because all sales took place within one year of the valuation day, the chart sets out the actual sale prices of the four comparable properties.

Table A: Comparable Property Sales

	Subject	Sale A	1166 N Ril Lake Road	1073 E. Grandview Lake Road	1130 S. Menominee Lake Road	1133 Fire Rt. A1 Gravenhurst
Sale Date		Dec. -12	Oct. -11	Oct. -11	Jan. -11	Dec. -12
Sale Price		$300,000	$187,000	$115,000	$150,000	$22,500
Lot Size (a.)	1.25	0.85	0.48	0.18	1.86	0.5
Frontage (Ft.)	205	199	128	80	270	123
Access	water only	year round	year round	*ROW - seasonal	*ROW	Seasonal
Buildable?	No	Yes	Yes	Yes	Yes	No
Price Per Acre (Rounded)		$345,000	$390,000	$639,000	$80,700	$45,000

*ROW = right-of-way

23Because MPAC's evidence excluded two factors affecting the future use of this land for building, the sales comparisons are not helpful determinants of value. All the four comparable properties are accessible by road, at least on a seasonal basis, and none of the properties had restrictions on building that were entered into evidence.

24The one selected comparable property from the Appellants' appraisal was deemed by the appraiser to be an inferior property, located on Barkway Lake in Gravenhurst, with less frontage and a lot less than half the area of the subject property. This property, in contrast to the subject, is accessible by road on a seasonal basis. However, while a listing agreement for this property included as part of the Appraisal notes that it "[m]ight be possible to talk to town to allow building", the property was appraised and listed for sale as "unbuildable". This then makes 1133 Fireroute A1 the most comparable property of the selection, sold in December, 2012 for $22,500.

25Using this property as the best comparison, the value per acre of the comparable property is $45,000. Applying this figure to the subject property, the current value is $56,000 (rounded).

Equity

26Once the Board has determined the current value of the land, it is required by s. 44(3)(b) of the Act to:

(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.

27The parties provided some evidence on the issue of equity. Ms. D'Andrea included her Equity Analysis based on 30 sales of similar properties in the vicinity and testified that the assessment to sales ratio ("ASR") for the 30 sales had a median of .99, which is usually an indicator of reasonable accuracy in assessment. However, only nine of the 30 sales on which the analysis is based has ASR values in the acceptable range within 5% of the perfect accord between sales and assessment: 1.0. The Appellants provided no evidence on this issue. The Board concludes that, based on the evidence, having reference to the value at which similar lands in the vicinity are assessed, no adjustment is required in the assessment of the subject property to make its assessment equitable with other lands in the vicinity. The Board makes no adjustment.

CONCLUSION

28The Board determines that the current value of the subject property is $56,000.

29The Board finds there is no evidence before it supporting the conclusion that the value of the subject property requires an adjustment in accordance with s. 44(3)(b) of the Act in order to make it equitable with the assessed values of similar properties in the vicinity.

30The Board therefore reduces the assessment of the subject property as at January 1, 2012, for the 2014 and 2015 taxation years from $256,000 to $56,000.