Fabbro v Municipal Property Assessment Corporation Region 14, 2015 OARB minicounsel 45

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE:

June 1, 2015

FILE NO.:

WR 130638

Assessed Person(s):

Pietro Fabbro and Vitalina Fabbro

Appellant(s):

Pietro Fabbro and Vitalina Fabbro

Respondent(s):

Municipal Property Assessment Corporation (“MPAC”) Region 14

Respondent(s):

City of Vaughan

Property Location(s):

240 Stephanie Boulevard

Municipality(ies):

City of Vaughan

Roll Number(s):

1928-000-311-70260-0000

Appeal Number(s):

3047131, 3063627 and 3081245 (deemed 2015)

Taxation Year(s):

2013, 2014 (and deemed 2015)

Hearing Event No.

571648

Legislative Authority:

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

Heard:

February 12, 2015 in Maple, Ontario

APPEARANCES:

Parties

Representative

P. Fabbro and V. Fabbro

Bernard DiVona

MPAC

Leo Verduci

City of Vaughan

No one appeared

DECISION OF THE BOARD DELIVERED BY ANTHONY LaREGINA

ISSUE

1The subject property, located at 240 Stephanie Boulevard, is single-family detached home located in the City of Vaughan. The valuation model used by MPAC is the sales comparison approach. The property is assessed at $874,000 for the 2013 and 2014 taxation years. The subject property is located in the Kirby Estates which is classified as a rural estate area. The subject property abuts a gas pipeline at the rear of the property and a green space with a running stream on one side of the property.

2MPAC’s position is that the current value is reasonable in comparison to the sales of three properties presented which are similar to the subject property and located in the same vicinity. MPAC maintains that the Appellant has not produced any quantitative evidence to suggest that the pipeline or the green space or the stream have had a negative impact on value and recommends that based on the sales of the comparable properties, the assessment of the subject property is very reasonable and should be confirmed at $874,000.

3The Appellant argues that the comparables presented by MPAC are superior to the subject property. The Appellant argues the value of the subject property is being negatively affected by the setback requirements resulting from the gas pipeline and the bank of the ravine and that these factors should be taken into consideration in the calculation of the Current Value Assessment (“CVA”) for the subject property. The Appellant believes that the 13.74% increase in assessment of the subject property as compared to the municipal average of 6.61% for the average home is not justified. The Appellant requests that the Assessment Review Board (“Board”) reduce the assessment of the subject property from $874,000 to $713,000 putting the subject in line with the average increase for the municipality based on the average typical property.

DECISION

4The Board finds the current value of the subject property to be $874,000 for the 2013 and 2014 taxation years and that the current value is equitable with the assessments of similar properties in the vicinity.

5The decision of the Board, therefore, is to confirm the assessment of the subject property at $874,000 for the 2013, 2014 and deemed 2015 taxation years.

REASONS FOR DECISION

Subject Property

6The subject property at 240 Stephanie Boulevard is a single-family detached home located in a rural estate area in the City of Vaughan. The lot has an effective frontage of 140 feet and an effective depth of 376 feet for a total effective area of 52,640 square feet (“sq. ft.”) or 1.21 acres. The building structure has a total area of 2,116 sq. ft. with 1,272 sq. ft. on the main level and 844 sq. ft. on the second level. The subject also has a total basement area of 1,235 sq. ft. with a finished basement area of 965 sq. ft. The subject property was constructed in 1987 and it has an attached garage. The subject property abuts a gas pipeline at the rear of the property and a ravine which banks to a stream on the west side of the property. The estate area does not have any curbs or gutters and the subject property is on a septic bed with private well water. The description of the subject property was agreed to by Mr. DiVona as properly reflecting the characteristics of the property.

Case for the MPAC

7Mr. Verduci, representing MPAC, submitted in evidence Exhibits 1 and 3 comprising of a property report with the sales of three comparable properties, a map with the location of the comparables in relation to the subject, time adjustment factors, equity analysis, email communication between the parties, maps of the location of the pipeline from Trans Canada Pipelines and the transfer documentation for 50 Putting Green Crescent.

Table 1 – MPAC’s Comparable Sales

Subject Property

Sale A

Sale B

Sale C

Sale D

Address

240 Stephanie Boulevard

34 Rachelle Court

34 Rachelle Court

50 Putting Green Crescent

12301 Pine Valley Drive

Assessment $

874,000

1,037,000

1,037,000

963,000

1,132,000

Sale Amount $

1,128,000

960,000

955,000

1,200,000

Adjusted Sale $

1,141,000

1,062,915

1,131,000

Sale Date

2014/06

2007/12

2010/12

2012/08

Site Area in Acres

1.21

1.27

1.27

1.43

1.49

Frontage Ft.

140

229

229

210

170

Depth, Ft.

376

297

Year Built

1987

1988

1988

1976

1991

Building Area Sq. Ft.

2,116

3,548

3,548

2,145

4,345

Basement Total Area

1,235

1,864

1,864

2,062

3,373

Basement Finish Area

965

0

0

0

0

Central Air

Y

Y

Y

N

Y

Heating Type

FA

FA

FA

FA

FA

Bedrooms

3

5

5

3

4

Full Storey’s

2

2

2

1

2

Abuts Pipeline

Y

Y

Y

Y

Y

Abuts Ravine

Y

N

N

N

N

Comparability to Subject Property

Superior

Superior

Relatively Comparable

Superior

8Mr. Verduci made the following additional points pertaining to each of the comparable sales and their relationships to the subject property:

• Sales A-B, 34 Rachelle Court is located in the same estate area less than 500 meters from the subject property, has a similar lot size but a larger home and therefore is considered to be superior to the subject property. The property sold twice, once in 2007/12 for $960,000 and the second time in 2014/06 for $1,128,000. The average sale price at 2011/02, which is considered to the middle point of the two sales, was $1,044,000. Time adjusting this middle value to January 1, 2012 brings the time adjusted sale price to $1,141,000. Mr. Verduci points out that 34 Rachelle Court is located around the corner from the subject property and has all the same factors; it abuts a pipeline with all the same easements and rights of ways, has well water, a septic bed and does not have curbs or gutters and still has an adjusted sale substantially higher than the subject property’s assessed value of $874,000.

• Sale C – 50 Putting Green Crescent is considered to be relatively comparable. This comparable is a bungalow with similar building area and a slightly larger lot. This property sold in December 2010 for $955,000. The time adjusted sale value for this property is $1,062,915. Mr. Verduci concludes that a gas pipeline runs directly underneath 50 Putting Green Crescent and yet this property commands a sale value substantially higher than the assessed value of the subject property.

• Sale D – 12301 Pine Valley Drive has a larger lot, larger structure and is slightly newer and is therefore considered to be superior to the subject property. The time adjusted sale value for this property is $1,131,000 which is very similar to its CVA of $1,132,000. Once again this property has a gas pipeline running directly behind it and is commanding a sale value substantially above the assessed value of the subject property.

Case for the Appellant

9Mr. DiVona, the Appellant’s representative, presented Exhibit 2 as his evidence package which includes:

• a written summary of his evidence and arguments

• property assessment detail reports from 2009 to 2016 taxation years

• minutes of settlement for the 2004 taxation year reducing value from $522,000 to $382,000

• MPAC’s request for reconsideration report

• aerial photograph of 240 Stephanie Boulevard

• letter from TransCanada Pipelines Limited

• photographs of pipeline construction

• maps demonstrating location of pipeline

• safety and damage prevention as it pertains to the proximity of the pipeline and relating to the pipeline itself

• survey showing the location of the pipeline in relation to the subject property

10Mr. DiVona argues that the subject property is atypical to the existing Kirby Estates community and is more typical to the average property in the City of Vaughan. The yearly increase of assessment for the average property was 6.61% while the subject property’s assessment was increased by 13.74%.

11Mr. DiVona filed an appeal on the same property in 2004 and the appeal was settled through Minutes of Settlement with MPAC. Mr. DiVona was successful in negotiating a settlement which saw the assessment reduced from $522,000 to $382,000. As a result of the settlement in 2004 MPAC assessed the property between 2004 and 2012 at 6.13% or .88% above the municipal average of 5.25%.

12Mr. DiVona claims that the negotiated settlement in 2004 resulted from three site specific factors which neither improved nor changed over the last 10 years.

13The three site specific factors which make the subject property atypical are as follows:

1. Residential Home is atypical in size, character and quality of construction. The home is not on city water, does not have curbs or sidewalks and abuts a utility box. The subject has a total building area of 2,116 sq. ft. with eight foot ceilings and an attached double garage. Mr. DiVona concluded that this home is one-quarter to one-half the building area of the other properties in the Kirby Estates.

2. Side yard naturalization/conservation lands. The home currently abuts a ravine on the west side with a bank and a running stream. This results in a 10 meter setback from the “top of the bank” reducing the subject property’s developable frontage from 140 feet to 107 feet. This reduces the flexibility for the Appellant to construct a new custom built home.

3. Rear yard abutting Trans Canada pipeline. Prior to 2012 the gas pipeline was located 90 feet from the rear property line. After 2012 the pipeline was moved and it was located only five meters or 16.5 feet from the rear of the property. Mr. DiVona argued that based on the 100 foot safety zone requirements enforced by TransCanada Pipelines this represents 27% of the entire property and that a potential buyer would factor this into their decision to purchase the property. Furthermore, the Municipality has a 7.5 metre or 25 foot setback from the rear of the property bringing the total to 33% of the rear of the property as unavailable to the owner for the purposes of construction, erection etc. In fact, Mr. DiVona also noted that in 2012 TransCanada Pipelines paid the Appellant $26,480 for the adverse effect to the property including the removal of a tree from the rear of the property.

14Mr. DiVona concluded that when taking all the setbacks into consideration, including the front yard setback, the building envelope on the subject lot is only 4,732 sq. ft. representing a 40 by 120 foot lot which is representative of one average lot in the municipality. Mr. DiVona requested that based on the three factors stated above the Board reduce the yearly increase in assessment from 13.74% to 6.61% reflecting that of an average property in the municipality.

15With respect to MPAC’s comparable properties, Mr. DiVona pointed out that 50 Putting Green Crescent is not relatively comparable for the following reasons:

1. The property is located nine kilometers away from the subject in Kleinburg which is a more desirable community to Woodbridge, location of the subject property, and therefore a greater value.

2. It has brick and stone exterior versus the subject which has stone and stucco.

3. It is a large style bungalow versus the subject which is a two storey.

4. It has a three car garage versus the subject with a two car.

5. It has two fireplaces versus one for the subject.

6. It is on municipal water versus the subject which is on well water. This represents a $35,000 additional value which the subject does not have and represents an additional $1,500 increase in home insurance costs for the subject because there are no water hydrants in the area.

7. The Kleinburg location has curbs and gutters versus none for the subject.

8. It has nine foot ceilings versus the subject at eight foot ceilings.

9. It has granite countertops versus the subject without granite.

10. It has a finished basement versus the subject’s which is only partially finished.

11. It has larger building area and principal rooms as opposed to the subject property.

12. It does not have side or rear yard restrictions as per the MLS® listing. If the property has restrictions they would be located at a considerable distance from the property as compared to the subject.

MPAC’s Summation

16Mr. Verduci submitted that the value of the subject property should be confirmed at $874,000 based on the sales comparables which he presented. Mr. Verduci pointed out that all of the sales he submitted were similar to the subject property, all abutting pipelines and all had adjusted sales values substantially higher than the subject property. Furthermore, Mr. Verduci pointed out that the adjusted sale values were in line with their assessments and therefore the assessments were representative of market value.

17Mr. Verduci submitted that there is no evidence to quantify the impact of the pipeline on the value of the abutting properties and that the market dictates the value of those properties as demonstrated in the comparable sales submitted by MPAC.

18Mr. Verduci submitted that in his opinion it was clear that the subject property was not an average property in that it is located in an estate area, it has a large estate lot on which the owner still has the ability to build an 8,000 sq. ft. home with a swimming pool. Mr. Verduci asserted that a 40 by 120 foot lot cannot accommodate these structures.

19Mr. Verduci submits that even though there is a buffer or safety zone established by the pipeline company on which building is restricted, it is clear from the Trans Canada Pipelines’s documentation submitted by Mr. DiVona in evidence that a property owner can build as long as they apply for approval to the pipeline company.

20With regards to Mr. DiVona’s assertion that the ravine on the side of the property requires a “top of bank” setback which negatively impacts the building envelope and therefore the value of the subject property, Mr. Verduci points out that there has been no quantitative evidence in support of this allegation. Normally, a greenspace or ravine adds value to a residential property.

21Mr. Verduci concludes that the Assessment Act (“Act”) has no provision for setting the assessed value of the property based on an average yearly increase as Mr. DiVona is suggesting. The Act under s. 19.1 requires that the assessed value be set based on current value and that means sales of similar properties in the vicinity. Mr. DiVona has not produced any sales to support his conclusions.

22Mr. Verduci requests that the Board confirm the assessment of the subject property at $874,000 for the 2013 and 2014 taxation years.

Appellants’ Summation

23Mr. DiVona submitted that the comparables presented by MPAC are all superior to the subject property and therefore should not be considered by the Board to establish the value of the subject property.

24Mr. DiVona submitted that over the last ten years there have not been any changes to the subject property other than the pipeline which was moved to within five metres or 16.5 feet from the rear of the property line as opposed to the original 90 feet.

25Mr. DiVona submitted that in 2004 there were Minutes of Settlement with MPAC that acknowledged that the property was only slightly above the average typical property in the municipality and therefore an increase of 6.13% was applied and the assessment adjusted accordingly. Mr. DiVona further submitted that this increase was applied by MPAC until the 2012 valuation.

26Mr. DiVona concluded that the three original factors affecting the property, cited on page 2 of Mr. DiVona’s evidence, have not changed since the 2004 agreement with MPAC and therefore the same yearly increase should still apply resulting in an assessed value of $713,000.

27Mr. DiVona requests that the Board reduce the assessment of the subject property from $874,000 to $713,000 for the 2013 and 2014 taxation years.

Legislation

28The Board must have regard to s. 1, 19.(1), 19.2(1), 40.(19) and 44.(3)(a) (b) of the Act when determining whether or not the assessment under appeal is correct.

29Section 1 of the 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.

30Section 19.(1) of the Act states:

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

31Section 19.2(1) 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 2013 to 2016, land is valued as of January 1, 2012.

32Section 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.

33Section 44.(3) of the Act states:

44.(3) Same, 2013 and subsequent years. – For 2013 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.

Board’s Analysis and Conclusions

34The thrust of the Act is to rely on current value as the basis for assessed value. 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.”

35The best evidence of current value is the sale of the subject property on or close to the valuation day of January 1, 2012. If, as in this case, no such sale occurred the sales of similar properties in the vicinity will be considered to establish current value of the subject property.

36The only sales evidence submitted to the Board is the comparable sales provided by MPAC. When analyzing those sales the Board is in agreement with Mr. Verduci that while the sales are not identical to the subject property they are similar in nature and all have the same elements in that they are abutting the gas pipeline. The adjusted sale range of the three comparable properties is between $1,062,915 and $1,141,000 which demonstrates that the market value of these properties is substantially higher than the assessment of the subject property at $874,000.

37Mr. DiVona has not produced any sales or market related evidence in support current value.

38Mr. DiVona has asserted that the comparable sales submitted by MPAC are superior to the subject property. The Board acknowledges that if this is correct it is also reflected in the fact that the adjusted sales range is so much higher than the assessment of the subject property. It is the Board’s conclusion from analyzing the various elements of the comparable sales that these properties are similar in nature and all located in the same vicinity as the subject property. The comparables are approximately the same age, have similar lot sizes and all abut a gas pipeline. With regards to the building area of 34 Rachelle Court and 12301 Pine Valley Drive both have larger building areas than the subject property but both also have CVAs substantially higher than the subject property. 34 Rachelle Court’s CVA is 18.6% higher and 12301 Pine Valley’s CVA is 29.5% higher than the assessment as returned for the subject property. The building area of 50 Putting Green Crescent is almost identical to that of the subject property and, again, the assessed value of 50 Putting Green Crescent is 10% higher than the assessment as returned for the subject property. Also, the adjusted sale value of 50 Putting Green Crescent at $1,062,915 is almost 22% higher than the assessment as returned for the subject property. It is the Board’s finds that 50 Putting Green Crescent is the best comparable to the subject property. Even if Mr. DiVona’s assertion that this property is somewhat superior to the subject property is correct, the differences are more than accounted for in the differences in value between the two.

39The Board will therefore set the current value of the subject property at $874,000 for the 2013 and 2014 taxation years.

40Mr. DiVona has also submitted that the subject property is negatively affected by the setback requirements for the gas pipeline at the rear of the property and the top of bank on the side of the property relating to the ravine. Mr. DiVona has not produced any quantitative evidence to support this conclusion, therefore the Board will make no downward adjustment to current value for setbacks in relation to the ravine or gas pipeline.

41Mr. DiVona is requesting that the Board rely on the agreement made between MPAC and the Appellant in 2004 which establishes the subject property as an average typical property and apply the same agreement for the 2012 valuation reflecting the average increase for the municipality. The Board is in agreement with Mr. Verduci that the subject property is not an average typical property in an average area. The subject is located in a rural estate area with larger lots and, clearly based on the sales of comparable properties, commands a premium to that of an average 40 by 120 foot lot. The owners purchased this property as it stands today and have not attempted to build any additional structures and therefore have no evidence to prove that the factors cited by Mr. DiVona have a negative impact on the value. Finally, the owners continue to enjoy the benefits of a large lot area and the natural open spaces of a rural estate. These are not features found in an average typical property.

42The Board is required by the Act to:

a) determine the current value of the land;

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 land.

Current Value

43The Board will set the current value of the subject property at $874,000 for the 2013 and 2014 taxation years.

Equity

44Mr. Verduci submitted an equity analysis as part of his exhibits indicating that the median assessment to sales ratio is 1.0 based on 30 sales of similar properties in the vicinity.

45For the purposes of s. 44.(3)(b), based on the equity analysis provided by MPAC, the Board finds that the current value, as determined above, does not require any further adjustment to make it equitable with the assessments of similar lands in the vicinity.

46The decision of the Board, therefore, is to confirm the assessment of the subject property for the 2013, 2014 and deemed 2015 taxation years at $874,000.

2015 DEEMED APPEAL

47An 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.

48Section 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.