Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: September 18, 2015 FILE NO.: WR 134486

Assessed Person(s): Annie Yeretsian Appellant(s): Canadian Capital Corporation Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 09 Respondent(s): City of Toronto

Property Location(s): 7 High Point Road Municipality(ies): City of Toronto Roll Number(s): 1908-081-870-00700-0000 Appeal Number(s): 3070128 Taxation Year(s): 2015 Hearing Event No.: 587037

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

Heard: August 27, 2015 in Toronto, Ontario

APPEARANCES:

Parties	Counsel/Representative
Annie Yeretsian	Paul Grosman
MPAC	Carlo Bassi
City of Toronto	No one appeared

DECISION OF THE BOARD DELIVERED BY JENNIFER GRIFFITH AND MARGARITA OKHOVATI

INTRODUCTION

1The appeal before the Assessment Review Board (“Board”) is filed by the Assessed Person in respect to the returned assessments of $10,450,000 for the 2015 taxation year for the subject property at 7 High Point Road, in the City of Toronto.

ISSUE

2Carlo Bassi, representative for MPAC is of the view that a fair and equitable assessed value for the subject property is $10,450,000 for the 2015 taxation year. He testified that this value is based on an inspection of the subject property on January 10, 2012 and supported by sales of similar properties in the vicinity. He testified that the 2012 Current Value Assessment (“CVA”) was returned at $13,586,000 and because the 2013 and 2014 taxation years were settled by Minutes of Settlement (“MOS”) the $10,450,000 value was carried over to the 2015 taxation year.

3Paul Grosman, representative for the Assessed Person/Appellant is of the view that the subject property is assessed too high, because MPAC failed to recognize the negative impact of unfinished areas of the subject property. He argued that although the subject property was built in 2011, there are several unfinished areas (e.g. unfinished basement, builder’s construction front door, the poor condition of the wooden framed windows, no landscaping, no tennis court and broken asphalt driveway to name a few). Mr. Grosman is of the view that a fair and equitable assessment value is $7,280,000 which is based on a 2015 time adjusted Agreement of Purchase and Sale for the subject property.

4The City of Toronto was not in attendance at the hearing.

5The Board has to decide:

• Whether the returned assessment of $10,450,000 for the 2015 taxation year for the subject property is at current value as at the valuation date January 1, 2012; and
• Whether the value is equitable with the assessments of similar lands in the vicinity.

DECISION

6The Board having determined the current value to be $10,450,000 and having found that an equity adjustment is not required, confirms the assessment of $10,450,000 for the subject property for the 2015 taxation year.

REASONS FOR DECISION

Background

7The subject property is a two story residential building, built in 2011, and located in the exclusive Bridal Path area in City of Toronto. The subject property described as having a total building area of 13,545 square feet (sq. ft.), a frontage of 264 feet, depth of 330 feet for a total site area of two acres and a quality 10 rating (Exhibit 1, p.1).

The Legislation

8In determining the value at which land shall be assessed, the Board must have regard to the following provisions of the Assessment Act (“Act”):

9Section 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.

10Section 19.(1) of the Act states:

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

11Section 19.2(1)2 of the Act states:

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.

12Section 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.

13Section 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.

14In determining the value at which any land shall be assessed, s. 44.(3)(a) and (b) of the Act requires the Board to do two things:

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.

Current Value

MPAC’s position

15In support of his argument, Mr. Bassi presented Exhibit 1, which contains detailed inspection notes, sales analysis, time-adjustment factor analysis, photographs and a map.

16In regard to the inspection notes (Exhibit 1, p.2 and 3). Mr. Bassi testified that he inspected the subject property on January 10, 2012 and at the time of the inspection the subject property was fully furnished, was owner occupied and that the owner was at home in the library.

17Mr. Bassi provided a very detailed account of the quality of construction, quality of materials and quality of finishes he found when he inspected the subject property. He confirmed that several exterior and interior features were in the process of being finished. These unfinished features are described as a couple of fireplaces, a few light fixtures trim in some isolated areas, main staircase railing, powder room, gates, driveway, and landscaping. Despite these unfinished features, Mr. Bassi argued that his findings support the quality rating of 10 for the subject property. Quality rating ranges from 1 to 10.

18In regard to the time adjustment factor analysis contained in Exhibit 1, Mr. Bassi testified that a study of 420 sales which occurred in the subject property’s neighbourhood and adjacent neighbourhoods from July 2009 to December 2012 was done to determine the time adjustment factor to be applied to the sales presented by MPAC (Exhibit 1, Appendix A).

19In support of current value, Mr. Bassi presented Exhibit 1, Appendix A, a market analysis of five sales identified as Sale A, B, C, D and E. The analysis contained both actual and time adjusted sales information. The Board relied on the actual sales which is factual evidence as opposed to the time-adjusted sales values which are estimated values. Mr. Bassi testified that due to the uniqueness of the subject property there are very limited sales in the immediate homogeneous area (C81). As a result, he was forced to expand the search for sales in neighbouring homogeneous areas (C62, C65 and C59).

20Mr. Bassi also testified that the assessment value of comparable properties abutting a golf course is positively impacted by a 16% adjustment, and for abutting a ravine a positive 6% adjustment. He testified that the value attributed to tennis courts is $26,000; that the outdoor pool at Sale C has an assessed value of $68,000; that the outdoor pool at Sale E has an assessed value of $41,000; that sheds have no value and landscaping is not an assessed item in Toronto.

21Mr. Bassi testified that the time adjusted sale prices of the above five sales he presented ranged from $10,377,428 to $18,492,892 with a median sale price of $14,693,443. This is compared to the recommended value of $10,450,000 for the subject property.

22In reviewing the above five sales presented by MPAC, the Board did not rely on Sales C, sold in 2010 and Sale E, sold in 2009. The reason being that the sale dates of these two comparable properties are too far removed from the valuation date of January 1, 2012 to provide any meaningful test of current value.

23The remaining three sales sold in 2011 and 2012 and located at 174 Teddington PA Avenue, at 114A Dunvegan Road and at 35 High Point Road have on average, a total site area of 46,189 sq. ft., a total building area of 13,013 sq. ft., year built 2004, a quality 10 rating, a median sale price of $14,580,000 and Assessment to Sales Ratio (“ASR”) of 0.87. This is compared to the subject property with a total site area of 87,120 sq. ft., a total building area of 13,545 sq. ft. a quality 10 rating, built in 2011 and at a value of $10,450,000.

24Although the above three comparable properties are on average similar in total building area, they are significantly smaller in total site area, slightly older, Sales A and B are from different homogeneous areas, and there are other features that would need to be adjusted for comparison to the subject property (finished basement, outdoor pool, tennis court, residence above detached garage, ravine and golf course abutment). Based on this analysis, the Board finds that these three comparable properties are not similar to the subject property and would require extensive amount of adjustments in order to make them similar.

25Mr. Bassi presented Exhibit 3, E-Status – Detailed Appeal Information report, to show that the 2013 and 2014 assessment appeals were settled by MOS and that the returned assessment value of $13,586,000 was reduced to $10,450,000. Mr. Bassi stated that according to MPAC’s records, the issues raised today are the same issues raised when the MOS were negotiated. Therefore, the value of $10,450,000 was carried forward for the 2015 taxation year and was rejected by Mr. Grosman.

26Mr. Grosman strongly objected to the Board accepting Exhibit 3. He argued that the document was not disclosed twenty-one days prior to this hearing. He argued that the issues were not litigated and that Mr. Bassi was not involved in the negotiations. He argued that zero weight should be given to Exhibit 3 and that he was going to be seeking a review of the decision if Exhibit 3 is accepted by the Board.

27In response, Mr. Bassi agreed that Exhibit 3 was not disclosed and felt it was not necessary, because it was public information. He also agreed that he was not involved in the negotiations of the MOS for the 2013 and 2014 taxation years.

28In considering the motion, the Board admonished Mr. Bassi for not fully complying with Rule 48 regardless of whether the document was public or not. Nevertheless, the Board accepted Exhibit 3 as evidence and offered Mr. Grosman extra time to review the document and to advise the Board if he was able to proceed with the hearing or whether an adjournment was required to prepare better. The Board also advised Mr. Grosman that the evidence contained in Exhibit 3, could have been easily given as oral testimony, and that it was within his rights to seek a review of the Board’s decision if he chose to do so. In response, Mr. Grosman advised the Board that he did not need extra time and that he was prepared to continue with the hearing.

29The hearing continued and Mr. Bassi presented Exhibit 4, an MLS listing for the subject property. The listing shows the seller as Foremost Financial Corporation, under Power of Sale, listed for $11,000,000 as of November 10, 2011, with an expiry date of March 31, 2012 and not sold. Mr. Bassi made reference to the remarks section of the listing, to show that the subject property is advertised as “Palatial 6 Bdrm Mansion on Magnificent Estate Property”. Mr. Bassi argued that the description in the remarks section of the listing supports his findings of superior quality, size and location when the subject property was inspected in January 2012. He argued that despite any unfinished areas the listed price is higher than value of $10,450,000 sought for the 2015 taxation year.

Appellant’s Position

30In presenting his case, Mr. Grosman presented a summary of his Professional Qualifications (Exhibit 5) to which no objection was raised by MPAC.

31Mr. Grosman testified that the MOS reduction of $10,450,000 for the 2012 CVA was a negotiated settlement, which he now believes to be incorrect.

32In support of his argument, Mr. Grosman presented Exhibit 6; photographs taken when he visited the subject property in August 2014, to demonstrate the unfinished exterior condition of the subject property. He argued that these unfinished areas are substandard for the homogeneous area and include such things as broken asphalt driveway, no landscaping, builder’s construction front door, grassy backyard with areas sunken and concreted, weathered and cracked wooden windows, and no tennis court. Mr. Grosman also argued that the subject property has no built-in appliances, sound system and intercom, no extensive lighting, and vanities are of mediocre quality.

33In response, Mr. Bassi testified that when he inspected the subject property in January 2012, it was owner occupied and fully furnished. However, he agreed and as stated in (Exhibit 1, p.2 and 3) that the basement was not finished, there was no landscaping, no swimming pool, and no tennis court, and that the front door was a construction door. Mr. Bassi argued that all of these unfinished items do not impact the quality rating, and that the reduction of the returned assessment from $13,586,000 to $10,450,000 for the 2013 and 2014 taxation years had already addressed the unfinished areas that negatively impact the returned assessment. In regard to the issue of no landscaping and broken asphalt driveways, Mr. Bassi argued that these are not assessable items and add no value to the assessed value of the subject property.

34Mr. Grosman presented Exhibit 7, sales of three comparable properties sold in 2011 and 2012 located at 35 High Point Road, 20 The Bridle Path and 78 The Bridle Path in the immediate and neighbouring homogeneous areas. These three comparable properties have on average a total site area of 80,532 sq. ft., a total building area of 14,095 sq. ft., year built 1986, with a quality 9 rating, a median sale price of $8,850,000 and an average ASR of 1.03. This is compared to the subject property with a total site area of 87,120 sq. ft., a total building area of 13,545 sq. ft. a quality 10 rating, built in 2011 and at a value of $10,450,000.

35The above analysis show that these three comparable properties, while on average similar in total building area, they are smaller in total site area, significantly older and with a lower quality rating than the subject property. As well, the comparable property at 78 The Bridle Path is a bungalow, different than the subject property which is a two-storey. The Board finds that these three comparable properties are not similar and would require extensive adjustment in order to make them similar to the subject property.

36Mr. Grosman also presented Exhibit 8, two MLS listings for the subject property on the open market. The first listing shows that the subject property was under a Power of Sale for $10,500,000 (original listing $11,000,000) over the period September 3, 2014 to March 1, 2015 and was not sold. The second listing on March 19, 2015 also under a Power of Sale for $10,500,000 shows a sold date of April 1, 2015 and a closing date of April 30, 2015.

37In regard to the above MLS listings for the subject property, Mr. Grosman presented Exhibit 9, an Agreement of Purchase and Sales, dated March 30, 2015. The agreement stated amongst other clauses that the completion date to be no later than 6 p.m. on April 30, 2015 and upon completion, vacant possession of the property shall be given to the Buyer unless otherwise provided for in this agreement. The agreement also stated the final agreed purchase price as $9,100,000 after what would appear to be much negotiations on the purchase price.

38Mr. Grosman also presented Exhibit 10, two MLS Statistical Summary reports to show the change in sale prices from the year ending December 31, 2011 and the year ending December 31, 2014 in Toronto, District C12. Based on the reports, Mr. Grosman testified that sale prices grew by 20.75%. Therefore, he argued that the current value of the subject property should be $7,280,000 (Agreement of Purchase and Sale price of $9,100,000 reduced by 20%).

39In response to Mr. Bassi on cross-examination, Mr. Grosman testified:

• That the comparable properties located on 20 and 78 The Bridle Path are in fact located on The Bridle Path Street, which is different from the exclusive area called The Bridle Path, in which the subject property is located;
• That 20 and 78 The Bridle Path Street are significantly smaller in site area, significantly older, that 78 The Bridle Path Street is a bungalow as opposed to a two-storey and of a lower quality rating than the subject property;
• That the subject property was listed on the open market under a Power of Sale because the owner was in arrears on the mortgage. However, Mr. Grosman did not agree that a default on a mortgage is an encumbrance;
• That the closing date of April 30, 2015 for the Agreement of Purchase and Sale was not executed and that it was extended to September 2015, although no factual evidence was presented; and
• That the commission by flat fee of $10,000 plus HST, could have been a business decision/deal or because of double representation for the buyers and sellers.

The Board's Analysis and Decision

40In reviewing all of the above evidence, the Board did not rely on following for reasons stated and/or finds the following:

• The Board did not rely on March 30, 2015 Agreement of Purchase and Sale for the subject property, because the closing date of April 30, 2015 was not executed and according to Mr. Grosman’s evidence, that date was extended to September 2015 with no further explanation;
• The Board did not rely on Mr. Grosman’s opinion of current value of $7,280,000, because this value was based on an Agreement of Purchase and Sale of the subject property that was not closed on the agreed date of April 30, 2015 and was apparently extended to September 2015;
• The Board did not rely on 1742209 Ontario Inc. v. Municipal Property Assessment Corp. Region No. 14 [2013] O.A.R.B.D. No. 211 presented by Mr. Grosman, because the reference cited is in regard to an actual sale. However in the appeal at hand, the Agreement of Purchase and Sale for the subject property was not executed on the closing date of April 30, 2015 as agreed to by the parties and was extended to September 2015 as per Mr. Grosman’s testimony;
• The Board finds that Mr. Grosman presented no professional cost to cure estimates of the unfinished areas detailed above to show the impact on the assessed value of the subject property. The Board accepts MPAC’s evidence that driveways and landscaping are not assessed and therefore add no value to the subject property; and
• The Board finds the best evidence to be the five sales presented by both MPAC and Mr. Grosman (the sale at 35 High Point Road was presented by both parties and therefore included only once in this analysis). These five sales have a median sale price of $10,700,000 and an average Assessment to Sales Ratio (“ASR”) of 0.95. However, MPAC is seeking the value of $10,450,000 which the Board accepts and this value is supported by the sales which occurred in the vicinity. Therefore, the Board determines the current value to be $10,450,000.

41Based on all of the above evidence, the Board determines the current value to be $10,450,000.

Equity

42In support of equity, MPAC presented Exhibit 2, an Equity Analysis of 30 sales with a median ASR of 0.99. Mr. Bassi testified that the median ASR fall within the International Association of Assessing Officers acceptable standards of an ASR of 0.90 to 1.10.

43No other evidence was presented by the Appellant.

44Based on the above evidence, the Board finds that the evidence does not support the conclusion that the current value as determined above requires an equity reduction.

CONCLUSION

45Based on all of the evidence, the Board determined the current value to be $10,450,000, and finds this value to be fair and equitable. Therefore, the Board confirms the returned assessment of $10,450,000 for the 2015 taxation year.