Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: June 3, 2016

FILE NO.: WR 133386A

AMENDED DECISION ISSUED ON: June 23, 2017

Assessed Person(s): 1490804 Ontario Limited

Appellant(s): 1490804 Ontario Limited and Angie Cormpilas

Respondent(s): Municipal Property Assessment Corporation ("MPAC") Region 15

Respondent(s): Town of Halton Hills

Property Location(s): 156 158 Guelph Street

Municipality(ies): Town of Halton Hills

Roll Number(s): 2415-020-002-04200-0000

Appeal Number(s): 3098430, 3098431, 3098432 and 3069220

Taxation Year(s): 2014 and 2015

Hearing Event No.: 587535

Legislative Authority: Sections 33, 34 and 40 of the Assessment Act, R.S.O. 1990, c. A.31, as amended

Heard: June 25, 2015 in Halton Hills, Ontario

APPEARANCES:

Parties	Counsel+/Representative
1490804 Ontario Limited	Angie Cormpilas
MPAC	Frank Shea+
Town of Halton Hills	Elizabeth van Ravens

DECISION OF THE BOARD DELIVERED BY MARGARITA OKHOVATI AND DAN WEAGANT

INTRODUCTION

1The subject property is a neighbourhood shopping plaza. It is located in the Town of Halton Hills ("Town") on the south side of Guelph Street just west of the intersection of Mountainview Road South and Guelph Street. The area generally consists of a mixture of both old and new commercial and industrial uses, as well as some residential properties.

2The property was assessed as a neighbourhood shopping plaza with a site of 30,200 square feet ("sq. ft."). The construction on the property was initiated in 2012, on two separate buildings. The buildings' net leasable area is 9,360 sq. ft.

3For the 2014 taxation year (valuation day of January 1, 2012) the assessment was returned at $1,065,000 in the Commercial Vacant Land tax class. There was no appeal before the Assessment Review Board ("Board") in relation to this assessment.

4In November of 2014 MPAC issued an omitted assessment under s. 33 of the Assessment Act ("Act") in the amount of $1,495,000 in the Commercial tax class (New Construction) (Full) and a supplementary assessment under s. 34 of the Act in the amount of $82,000 in the Commercial tax class (New Construction) (Full) as a result of construction and partial occupancy of the site. With these additional assessments, the total assessment value became $2,642,000.

5Currently, the building is not fully occupied. There are two physically separate structures on site – 156 Guelph Street, which has 4,680 sq. ft. and remains completely vacant and 158 Guelph Street, which has 4,678 sq. ft. and is partially occupied.

6The balance of the occupancy in the plaza, which is 8,162 sq. ft. was returned for the 2014 and 2015 taxation years with a 20% unfinished allowance.

7The first tenant leased 1,198 sq. ft. of the area in the newly constructed plaza and opened its business on July 13, 2014.

8Ian Thow is a property valuation analyst with MPAC. Mr. Thow inspected the subject property on February 18, 2015 and reviewed the income of the property. He used the income approach to determine the current value of the subject property for the 2015 taxation year.

9Mr. Thow recommends that the assessed value of the subject property for the 2015 taxation year be reduced from $2,642,000 in the Commercial tax class (New Construction) to $2,146,000, apportioned as follows: $1,150,100 in the Commercial (New Construction) tax class and $995,900 in the Commercial (New Construction) (Excess Land) tax class.

10Mr. Thow states that this change reflects a revised opinion of the finished Fair Market Rent with a 20% downward adjustment as an allowance for the building not being completely finished or occupied.

11In addition, Mr. Thow classified the unoccupied building in the New Construction Excess Land Subclass.

ISSUE

12There were four appeals advanced by the Appellant including appeals under s. 33, s. 34 and s. 40 of the Act as follows:

• Appeal 3069220 - s. 40 appeal for 2015 taxation year (current value)
• Appeal 3098430 - s. 33 appeal for 2014 taxation year (omitted assessment)
• Appeal 3098431 - s. 33 appeal for 2014 taxation year (omitted assessment)
• Appeal 3098432 - s. 34 appeal for 2014 taxation year (supplementary assessment)

13Prior to hearing evidence on the matters in dispute, the parties jointly submitted their agreement with respect to the recommended assessed values of the subject property for 2014 and 2015 taxation years. The parties submitted further that the only outstanding issue between them is the commencement date of the s. 33 omitted assessment under appeal 3098431.

14MPAC's and the Appellant's agreement is as follows:

• Appeal under s. 40 of the Act (Appeal no. 3069220) – the assessed value is reduced from $2,642,000 in the New Construction Commercial tax class to $2,146,000, apportioned as follows, $1,150,100 in the Commercial (New Construction) tax class and $995,900 in the Commercial (New Construction) (Excess Land) tax class, for the 2015 taxation year.
• Appeal under s. 33 of the Act (Appeal no. 3098430) – This appeal proposing an omitted class change from Commercial (Vacant Land) (COM CX) to Commercial (New Construction) Full (COM XT) in the amount of $1,065,000 is cancelled.
• Appeal under s. 34 of the Act (Appeal no. 3098432) – a supplementary assessment of $82,000 is confirmed in the Commercial (New Construction) tax class, effective July 13, 2014.
• Appeal under s. 33 of the Act (Appeal no. 3098431) – The parties agree that the assessment value of $1,495,000 in the Commercial (New Construction) Full (COM XT) tax class is reduced to $999,000 in the Commercial (Vacant Land) (COM CX) tax class for the 2014 taxation year.

DECISION

15In relation to appeal number 3098431, the Board finds that the effective date of the s. 33 omitted assessment is January 1, 2014.

Amended pursuant to Rule 130 of the Assessment Review Board's Rules of Practice and Procedure, effective April 1, 2013

16On consent of the parties:

a) the Board reduces the s. 40 assessment of the subject property from $2,642,000 to $2,146,000 apportioned as follows at $1,150,100 in the Commercial (New Construction) tax class and at $995,900 in the Commercial (New Construction) (Excess Land) tax class, for 2015 taxation year.

b) Appeal under s. 33 of the Act (Appeal no. 3098430). This appeal proposing an omitted class change from Commercial (Vacant Land) (COM CX) to Commercial (New Construction) Full (COM XT) in the amount of $1,065,000 is cancelled.

c) the Board confirms the s. 34 assessment of $82,000 in the Commercial (New Construction) tax class for the 2014 taxation year.

d) Appeal under s. 33 of the Act (Appeal no. 3098431) – The parties agree that the assessment value of $1,495,000 in the Commercial (New Construction) Full (COM XT) tax class is reduced to $999,000 in the Commercial (Vacant Land) (COM CX) tax class for the 2014 taxation year.

MPAC's Evidence - Effective date

17Mr. Thow submits that in October 2014, MPAC was notified by the Town of Halton Hills regarding the omissions in the tax roll of the subject property. MPAC visited the site and conducted a full investigation and valuation of the New Construction. In November 2014, MPAC issued two omitted and one supplementary assessments. As a result, the classification of the subject property changed as mentioned above.

Amended pursuant to Rule 130 of the Assessment Review Board's Rules of Practice and Procedure, effective April 1, 2013

18Mr. Thow submits that in 2011, the Town of Halton Hills issued the following building permits for the construction of the subject property (Exhibit 3).

• permit 2011-103896 for 156 Guelph Street
• permit 2011-103898 for 158 Guelph Street
• permit 2011-104151 for servicing/plumbing

19Mr. Thow submits that while the occupancy of the subject property commenced on July 13, 2014, the structure of the building existed prior to the end of 2013. Therefore, the effective date of the omitted assessment under appeal 3098431 must be January 1, 2014.

Appellant's Evidence – Effective Date

20Angie Cormpilas, the Assessed Person/Appellant argues that the effective valuation date of the omitted assessment must be July 11, 2014, which is the day the Town granted permission for occupancy in the subject property.

21Ms. Cormpilas states that the first occupancy in the plaza occurred on July 13, 2014 and MPAC made an error by suggesting that the effective date has to go back to January 1, 2014.

22Ms. Cormpilas testified that a building permit was issued in November 2011. The construction of the site started late 2012 and it continued into 2014. She stated that upgrading the services was delayed and in 2014 the building was only dry-walled – gutters and curbs were not done yet and it was not until June 2014 that electricity, heating, ventilation and air conditioning was installed in the buildings and the site work was completed.

23In short, Ms. Cormpilas believes that the appropriate commencement date for the additional value of the omitted assessments returned by MPAC is July 11, 2014, which is the date that the site was safe for access, ready for her tenant and all upgrades for its use were complete. She believes that the Town's letter indicating the July 11, 2014, as the approved date for occupancy is sufficient evidence to suggest that the value reflected by the omitted assessment returned by MPAC cannot be earlier than this date as the additional value of that omitted assessment is for New Construction.

24Ms. Cormpilas stated that in her opinion, the property has to be fully usable for commercial purposes in order to be taxable. She submits that the subject property was not ready until July 11, 2014 and it was July 13, 2014 when the first tenant opened for business.

25Elizabeth van Ravens representing the Town of Halton Hills did not testify or offer submissions in the hearing.

Analysis

26In making its determination, the Board must consider s. 33 of the Act which states in part:

33.(1) Change re land omitted from tax roll – The following rules apply if land liable to assessment has been in whole or in part omitted from the tax roll for the current year or for all or part of either or both of the last two preceding years, and no taxes have been levied for the assessment omitted:

1. The assessment corporation shall make any assessment necessary to correct the omission.

2. If the land is located in a municipality, the clerk of the municipality shall alter the tax roll upon receiving notice of the change, and the municipality shall levy and collect the taxes that would have been payable if the assessment had not been omitted.

3. If the land is located in non-municipal territory, the Minister shall alter the tax roll upon receiving notice of the change, and shall collect the taxes that would have been payable if the assessment had not been omitted.

27Mr. Thow, by making reference to s. 33.(1)1. indicated that once MPAC is notified by municipality respecting omissions in the tax roll, it is their duty to take action and make any necessary corrections.

28The Board finds that MPAC acted according to s. 33.(1) of the Act which states that if land liable to assessment has been in whole or in part omitted from the tax roll for the current year or for any part or all of either or both of the last two preceding years, and no taxes have been levied for the omitted assessment, the assessor shall make any assessment necessary to rectify the omission. The Board is satisfied that all of the pre-conditions for the s. 33 omitted assessment are present and the amended assessment is properly made.

29Mr. Thow indicated that by responding to s. 33.(1) of the Act, MPAC realized that land liable to taxation for 2014 had been omitted. Therefore, they returned an omitted assessment with a commencement date of January 1, 2014, believing that the structure of the buildings existed at that time and the characteristics of the property were in keeping with a New Construction Commercial tax class.

30Mr. Thow testified that the shell of the plaza was completed during 2013. In support of his evidence, he presented several photographs taken from mid-2013 depicting the enclosed buildings (Exhibit 3, Tab D). He testified further that the photographs taken in February 2015 of the subject property (Exhibit 3, page 9) shows inside of the 156 Guelph Street building, which has walls and is partitioned and page 10 shows that one of the units is finished.

31Mr. Thow further explained that, while the structures present are assessable, even without being occupied, his 20% reduction on the overall assessment for the 2014 and 2015 taxation years serves to mitigate the fact that the units are not occupied. He also submitted that if the subject property is vacant, the Appellant has recourse through the Municipal Act, 2001, with an application for vacant unit rebate.

32The Board considered the reasons stated by Ms. Cormpilas respecting the commencement date of the omitted assessment and finds it unreasonable when she argues that a property has to be fully usable for commercial purposes in order to be assessed. She did not present any evidence in support of her opinion.

33Frank Shea, counsel for MPAC, drew the panel's attention to several Ontario court cases regarding s. 33 and 34 of the Act. The Board is persuaded by the following court decisions:

34District Court of Ontario decision on Arcway Welding (1972) Ltd. v. Burlington (City) [1988] O.J. No. 932 (Ont. Dist. Ct.) (The Arcway case) states in part,

....Further, I find no ambiguity in the wording of section 32.1 of the Act. In the case at bar I find that unassessed enlargement of the building on the subject property constituted "omitted land". The Act contemplates if any land liable for assessment has been in whole or part omitted from the collector's roll, the assessor can rectify the omission for the current year and the two preceding years. The most reasonable construction of the section leads me to conclude that reasons for the omission are irrelevant."

35Superior Court of Justice decision on Badder Funeral Homes Ltd. v. Municipal Property Assessment Corporation and Municipality of Chatham Kent, December 7, 2004, states in part,

....It must be conceded that the process by which the reassessment was done was quite slow – after all, the building permit was issued on September 1, 2000, and the new work was apparently finished sometime in early 2002 – but the reassessment procedure set out in s. 33.(1) only addresses the issue of timeliness in one way, namely, it says that the reassessment may go back two years and no further.

36The Board finds MPAC's statement that the structure in the Appellant's plaza existed since mid-2013 and that a building or structure can be properly assessed whether or not it has commenced to be used for any purpose, to be most compelling.

CONCLUSION

37The Board finds that the effective date of the omitted assessment under appeal 3098431 is January 1, 2014.

38On consent of the parties:

a) the Board reduces the s. 40 assessment of the subject property from $2,642,000 to $2,146,000 apportioned as follows at $1,150,100 in the Commercial (New Construction) tax class and at $995,900 in the Commercial (New Construction) (Excess Land) tax class, for 2015 taxation year.

b) Appeal under s. 33 of the Act (Appeal no. 3098430). This appeal proposing an omitted class change from Commercial (Vacant Land) (COM CX) to Commercial (New Construction) Full (COM XT) in the amount of $1,065,000 is cancelled.

c) the Board confirms the s. 34 assessment of $82,000 in the Commercial (New Construction) tax class for the 2014 taxation year.

d) Appeal under s. 33 of the Act (Appeal no. 3098431) – The parties agree that the assessment value of $1,495,000 in the Commercial (New Construction) Full (COM XT) tax class is reduced to $999,000 in the Commercial (Vacant Land) (COM CX) tax class for the 2014 taxation year.