Assessment Review Board
Commission de révision de l’évaluation foncière
ISSUE DATE:
March 1, 2016
FILE NO.:
WR 136337
Assessed Person(s):
2197558 Ontario Inc.
Appellant(s):
Walid Samarah
Respondent(s):
Municipal Property Assessment Corporation (“MPAC”) Region 09
Respondent(s):
City of Toronto
Property Location(s):
1080 Weston Road
Municipality(ies):
City of Toronto
Roll Number(s):
1914-072-080-01800-0000
Appeal Number(s):
3106828
Taxation Year(s):
2015
Hearing Event No.
597929 and 609342
Legislative Authority:
Section 40 of the Assessment Act, R.S.O. 1990, c. A.31, as amended
Heard:
October 2 and October 28, 2015 in Toronto, Ontario
APPEARANCES:
Parties
Representative
Kisaya Samarah
Walid Samarah
MPAC
Okay Enenwali
City of Toronto
No one appeared
DECISION OF THE BOARD DELIVERED BY BERNARD COWAN
INTRODUCTION
11080 Weston Road is an 8,267 square foot (“sq. ft.”) commercial property on which the business of auto repairs and used car sales is operated from its 1,441 sq. ft. 1950s-vintage one-storey building.
2The subject property (“subject”) was assessed by MPAC at $897,000 for the 2015 taxation year utilizing its Automated Cost System whereby a land value is added to the depreciated replacement cost of the structural components. MPAC’s representative, Okay Enenwali, recommends a reduction in the assessment to $620,000. This is based on applying the $75 median sales price per sf (“psf”) of site area of four sold properties in his Exhibit 1 Report to that of the subject. He has done so in his conviction that the site area values for older commercial properties in this neighbourhood, which has been undergoing recent development, are the predominant factor in sales values, not the existing depreciated structures.
3Walid Samarah, the appellant, has researched the assessments for what he believes to be all of the automotive-related businesses in his area, and considers that his property is excessively assessed in comparison to these 15 other properties. Furthermore, he believes that the value of his property has been negatively influenced by a new zoning by-law enacted in May, 2013 that purportedly changed the zoning from commercial to residential, and by his Toronto-issued business licence for 2015-2016 that restricts the maximum number of cars for sale on the site at any one time to five, down from the 10-15 vehicles previously allowed. He accordingly urges me to reduce the assessment to about $450,000 based on his unsuccessful attempt in 2014 to sell the subject for $400,000 to $500,000.
ISSUE
4I must determine the subject property’s current value as of January 1, 2012 by evaluating the sales evidence, and then ensure that the result is equitable with the assessments of similar properties in the vicinity, if the subject’s assessment is excessive.
DECISION
5The assessment is reduced from $897,000 to $519,000 for the 2015 taxation year. No additional reduction is necessary to establish an assessment that is equitable with those for similar properties in the vicinity of the subject.
REASONS FOR DECISION
Background
6This hearing commenced on October 2, 2015. In preparation, Mr. Samarah recognized 9-10 garages and/or car lots for comparative purposes. He shared these with Mr. Enenwali, who incorporated two of these into his Report that compares four sold properties from which his recommended assessment reduction is derived.
7During the hearing on that day, in presenting his evidence, Mr. Samarah introduced as Exhibit 2 a listing of 15 properties believed to have an automotive-type use. Several of the properties on the list had been previously disclosed to MPAC, but most had not. Mr. Enenwali was good enough, in this circumstance, to allow this self-represented appellant to introduce the evidence of his choosing, provided that a brief adjournment was granted to enable the assessor to review this new circumstance.
8The requested adjournment was granted, and the hearing reconvened on October 28, 2015. At that time, on consent of both parties, Mr. Enenwali introduced Exhibit 3, being a detailed Property Report incorporating the 15 properties from Exhibit 2 chosen by the appellant, which sets out considerable added detail respecting building ages, assessed building values, sales dates and prices, assessment to sales ratios (“ASRs”), and values psf of site areas of both assessment and sales for each property. This document was consensually adopted as Exhibit 3 “from the appellant” to enable Mr. Enenwali to cross-examine Mr. Samarah on it.
9Exhibit 3 also included two separate lists; one being Mr. Enenwali’s selection from the 15 properties of the five “Comparables to the Subject”, and the other being his selection from the 15 properties of the four properties that he considered to be in the “Immediate Vicinity to the Subject.”
Current Value
10Section 19.(1) of the Assessment Act (“Act”) states:
19.(1) Assessment based on current value. – The assessment of land shall be based on its current value.
11The Act establishes January 1, 2012 as the valuation date for 2015 taxation , and defines current value (“CV”) to mean:
“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.
12The marketplace is accordingly determinative of CV in this matter.
13In this regard, Mr. Enenwali introduced four property sales in his Report for my consideration, aside from the subject that was purchased in June 2009. These are all located on Weston Road at numbers 393, 1745-1749, 931 and 1295.
14He has formulated his recommendation for the assessment reduction by comparatively evaluating all properties in evidence, inclusive of those referred to above in Exhibit 3, on a psf of site area, because all of these properties’ structures are old and substantially depreciated. He has accordingly removed the assessed building values from the total sales values to indicate the site value for his calculation of CV psf.
15Mr. Samarah has not disagreed with this approach to comparative analysis. I endorse this approach to comparative analysis in this matter, as it is clear from the evidence that the site value is substantially higher than the depreciated building values for most of the properties in evidence. It is the “mirror image” of more conventionally evaluating most properties on a psf of building area when the structure is a predominant element in a property’s use and value in the marketplace.
16For each of the four sold properties, Mr. Enenwali has, at page 11 of his Report, calculated the ASR, arriving at a median of 1.00. Based on this result, he appears to have concluded that this ideal correlation validates the sales evidence, and he accordingly applies the median CV of $75 psf to the subject’s site area of 8,267 sq. ft., yielding his rounded recommended value of $620,000.
17I find that the sale of 1295 Weston Road is unsuitable for Mr. Enenwali’s determination of CV psf, as he has done, for two reasons. Firstly, it is a substantially newer property, having had its structure built in 1991, over 40 years after the subject’s. Secondly, a sales comparison based on CV psf of site area is unwarranted for this property because its site value ($257,953) represents only 49% of its $525,000 sale price. This far exceeds the subject’s 91% value attributed to its site by Mr. Enenwali, utilizing his recommended assessment. 1295 Weston Road’s sale price was more representative of its building’s value, and a comparison solely on its site area accordingly lacks merit.
18The three remaining property sales introduced in MPAC’s Report are suitable for inclusion in my sales analysis, as are the sales for “Comparables” 3, 4 and 5 in Exhibit 3. I make this determination, notwithstanding the range of sale dates (between April 2011 and March 2014) respecting the three accepted sales from Mr. Enenwali’s Report and between September 2010 and August 2013 respecting the three “comparable” sales from Exhibit 3. Neither party argued that the absence of time-adjustments was problematic. I am satisfied, on the balance of probability, that no consequential timing distortion has resulted, as the impact of pre-January 1, 2012 valuation date sales is likely substantially mitigated by the sales following that date. Mr. Enenwali argues that Mr. Samarah introduced no sales evidence of his own, and that I should consequently
restrict my sales analysis to the sales in MPAC’s Report. However, Exhibit 3 is in the evidence before me, and I would be remiss in not addressing it in my sales analysis.
19In determining the above six sales for my analysis, I have rejected the following sales transactions included in Exhibit 3, for the following reasons:
Comparable 6 is indicated by Mr. Samarah to be a vacant land parcel.
Comparables 2 and 14 are indicated on Exhibit 2 to be industrial properties. No automotive-related use is indicated by Mr. Samarah.
The sales of Comparables 1, 8, 9, and 11 were in 2006 or earlier, all dates too far removed from the statutory valuation date to merit any weight. As well, Comparable 1 is also indicated by Mr. Samarah to be an industrial property with a car dealership, and MPAC, by its property code, considers this property to be industrial.
The purchase of the subject property by the appellant in March 2009 is also too distant from the valuation date.
20I have prepared Schedule 1 to this Decision, setting out the salient details respecting the six sales to which weight is attributable for my determination of CV. In that regard, I have been unable to calculate the land as a percentage of CV for Comparables 4 and 5. Nevertheless. I am satisfied that, like most other sales in evidence that transacted near the valuation date, the merits of their inclusion outweighs their exclusion, as this provides a larger body of transactions for my CV determination. Their selling price (“SP”) and CV psf of site areas are substantially in accord with the other sales, and do not distort the derived median.
21Schedule 1 indicates the average and median SP to be $64.86 and $60.76 respectively. By applying the mid-point of $62.81 to the subject’s 8,267 sq. ft., yields my determination of CV for the subject is $519,000, rounded.
22I make no downward adjustment to this finding of CV attributable to a licencing issue introduced by Mr. Samarah. He introduced a copy of his Toronto business licence as of April, 2015, which restricts the number of cars for sale on the property at any time to no more than five. He believes this to result from a purported change in zoning from commercial to residential. His testimony, that the reduction in numbers of vehicles is at least double that number, is not challenged by Mr. Enenwali. Mr. Enenwali does point out that use prevails over zoning in MPAC’s property coding process. His Report hints that a diminishment in value may be addressed by MPAC for the zoning and parking restrictions, when it indicates that “Other than the map and other zoning literature, owner has provided no other concrete evidence of zoning change …or good evidence of …parking restriction…” In the evidence before me,
23I concur that Exhibit 5 from Mr. Samarah, Zoning By Law No. 569-2013 enacted in May 2013, is not definitive. It states that the by-law “…has been appealed under section 34(19) of the Planning Act.” There is no indication as to the outcome of the appeal. Contrary to Mr. Enenwali’s Report, however, I do have the business licence in evidence. This evidence and Mr. Samarah’s testimony of the licence change and possible zoning change may indeed have an influence on the subject’s value. Or they may not. There is no evidence to quantify their impact, if any, on my finding of CV.
24Another issue was addressed by Mr. Samarah. He seeks a reduction in his assessment to about $450,000, presumably based on his attempt in 2014 to sell his property for between $400,000 - $500,000 in 2014. His testimony is that no sale transpired because no bank would finance the transaction, as the subject was formerly a gas station.
25No weight is given to this information, as it is anecdotal. Another gas stations is included in MPAC’s Report, without challenge by Mr. Samarah. Additionally, faced with actual sales transactions in evidence, the non-sale of the subject property merits little consideration.
Equity with Assessments of Similar Properties
26Section 44.(3) of the Act states in part:
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.
27As stated in my comments at the opening of the hearing, “vicinity” is the minimum area necessary to recognize a handful of similar properties, whereby “similar” relates to such items as design, size, age, construction, and so forth.
28Addressing the similarity, I have no basis in evidence to differentiate in quantifiable terms between the subject and others whose design and construction are indicated by MPAC’s property code to be purpose built, and those not. This, together with the recognition that the property sales upon which I have determined CV are properties whose values are very substantially site determinative due to their structures being old and substantially depreciated, lead to my primary focus on lot size as the primary indicator of similarity, as opposed to building ages and sizes.
29I find that all of the properties in Exhibits 1 or 3 merit inclusion as being in the same vicinity as the subject, because of a lack of evidence to merit exclusion for their location, and because my mandate to address similar properties, in this particular instance, requires a reference to a broader group of properties. This is so because there is not specific descriptive or photographic evidence to assist in determination of which sites have similar attributes.
30While Mr. Enenwali maintains that several properties in Exhibits 3 are not on Weston Road and some on Weston Road are distant from and in a less desirable section of that street, he has not presented any empirical evidence in this regard, but appears, at least to a degree, to hint at added value for a recently-opened rapid transit station near the subject. His contention is countered by Mr. Samarah’s testimony that the subject’s location is a poor one from a business standpoint. There is ongoing high crime in the area, and it is in a “dead” area due to the high traffic of intersecting high-traffic streets also in close proximity to his property. Again, in this regard, there is no empirical evidence to address comparative values.
31Schedule 1 hereto also sets out the 12 properties in evidence that I find to be the similar lands in the vicinity, as incorporated in the column headed Total CV PSF of Land. This determination includes all of the properties in evidence, with exceptions that I will address below. The result incorporates what I consider to constitute those properties that sustain automotive-related businesses that on the balance of probability are more closely aligned to the subject in their nature, character or function than the excluded ones.
32The properties excluded by me as being most probably dissimilar to the subject are as follows:
Comparables 1, 2, 6 and 14 for the reasons stated in paragraph 19 above.
1295 Weston Road (Comparable 12) for the reasons stated in paragraph 17above.
Comparable 13, because its lot size of 23,929 sq. ft. is substantially greater than all others in Schedule 1, the largest being 11,969 sq. ft., and the subject being 8,267 sq. ft.
33I find from my reference to these 12 similar properties’ assessments that the subject property’s assessment at $519,000, or $62.81 psf, is compatible with them. Accordingly, no further reduction to the subject’s assessment is merited to achieve an equitable result.
34Schedule 1 indicates the average and median lot area of the 12 similar properties to be 8,448 sq. ft. and 8,612 sq. ft. respectively; both very similar to the subject’s 8,267 sq. ft. site. The median and average assessments of $59.52 and $69.18, applied to the subject’s assessments indicate an equitable assessment for the subject to be in the range of $492,000 to $572,000. The subject property’s CV of $519,000 falls within this range, indicative that no further equity-based reduction is demonstrated.
Tests of the CV as Determined and It’s Equity
35It is noted that both parties used 1295 Weston Road in their presentations. I attributed no weight to this property in my determination of CV and in my equity reference, for the reasons stated above. Nevertheless, in this circumstance, I am prepared to test my conclusions against the evidence for this property in two ways.
36Firstly, 1295 Weston Road is considered by Mr. Enenwali, in his Report to be “the most comparable property to the subject… in terms of lot size, building area and a $70 per square foot value…” Indeed, its 7,525 sq. ft. lot and 2,742 sq. ft. floor area are the closest to the subject’s 8,267 sq. ft. lot and 1,441 sq. ft. floor area. Mr. Enenwali evaluates these appropriately in relation to the other three property sales in his Report. He then proceeds to acknowledge that 1295 Weston Road “…has a superior floor area and less depreciation in building value due to its 1999 year built. These superior benefits coincide with the added $5 per square feet used in arriving at the subject’s $75 per SQFT revised current value…” Mr. Enenwali has, I believe, equated the $5 psf added features to 1295 Weston Road’s $70 psf sale price in rationalizing his $75 psf recommended assessment.
37In my view, if 1295 Weston Road is superior to the subject, any value comparison of the two should start by deducting $5 psf from that property’s sale price. Doing so indicates a comparative value of $65 psf (not $75 psf) for the subject. This value is less than 3.5% above the subject’s $62.81 psf CV that I have determined, notwithstanding the 41 year differential in age and related depreciation, and accordingly does not indicate my determined CV for the subject to be excessive compared to Mr. Enenwali’s “most comparable” sale, which I admittedly excluded from my sales analysis.
38Secondly, MPAC’s report indicates that 1295 Weston Road’s assessment and sale price are both $525,000. Mr. Enenwali readily confirms that the assessment value shown has been adjusted by MPAC’s reconsideration process to correspond to the property’s sale price. He advises that the initial CV as returned was $929,000, which indicates an initial ASR of 1.77. Applying this ratio to the subject’s initial assessment of $897,000 yields a rounded value of $507,000, by my calculation ($897,000/1.77). Admittedly, the one error in assessing one property, 1295 Weston Road, is not a basis to determine any other property’s CV or its equity with other properties’ assessments. However, this test yields a value differing from the CV I have determined for the subject property by less than 3%.
39Neither of my two tests of the CV determined by me, in relation to the sale and to the initial assessment of 1295 Weston Road demonstrates an inequity.
CONCLUSION
40The CV for the subject property is found to be $519,000 for the 2015 taxation year. This value is equitable with the assessments of the properties that I have determined to be similar lands in the vicinity of the subject.
“Bernard Cowan”
BERNARD COWAN
MEMBER
Assessment Review Board
A constituent tribunal of Environment and Land Tribunals Ontario
Website: www.elto.gov.on.ca Telephone: 416-212-6349 Toll Free: 1-866-448-2248
Schedule 1
1080 Weston Rd
Sales and Assessment Data
Assessed
Assessed
Land as %
Total SP
Total CV
Address
Comp #
Sale Price
CV
Sale Date
Lot Area
Building Value
Land Value
Of CV
PSF of Land
PSF of Land
1080 Weston Rd - Subject
- 620,000
Mar-09
8,267
54,337
565,663
91
75.00
(* per MPAC recommendation)
MPAC Sales - Exhibit 1
393 Weston Rd
630,000
632,000
Apr-11
5,880
89,765
542,235
86
107.14
107.48
1745-1749 Weston Rd
482,000
682,000
May-12
11,181
142,962
539,038
79
43.11
61.00
931 Weston Rd
857,500
811,000
Mar-14
10,000
180,678
630,322
78
85.75
81.10
Added Sales - Ex 3
1587 Jane St
3
385,000
537,000
Apr-11
11,969
81,201
455,799
85
32.17
44.87
1359 Weston Rd
4
360,000
464,000
Sep-10
8,448
unknown
42.61
54.92
1311 Weston Rd
5
515,000
611,000
Aug-13
6,569
unknown
78.40
93.01
Average
64.86
Median
60.76
Additional Assessments for s. 44 (3)(b)
1384 Weston Rd
7
540,000
5,499
98.20
1660 Weston Rd
8
341,000
5,875
58.04
1622 Weston Rd
9
514,000
8,775
58.58
1345 Weston Rd
10
322,000
9,033
35.65
1698 Weston Rd
11
596,000
10,951
54.42
691 Old Weston Rd
15
636,000
7,675
82.87
Average of 12
8,448
69.18
Median of 12
8,612
59.52