Folino v. Municipal Property Assessment Corporation, 2016 CanLII 1690

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE:

January 15, 2016

FILE NO.:

WR 134186

Assessed Person(s):

Sergio Folino

Appellant(s):

Sergio Folino

Respondent(s):

Municipal Property Assessment Corporation (“MPAC”) Region 15

Respondent(s):

Town of Oakville

Property Location(s):

181 Tilford Road

Municipality(ies):

Town of Oakville

Roll Number(s):

2401-020-010-11000-0000

Appeal Number(s):

2946760, 3006916 and 3083121

Taxation Year(s):

2013, 2014 and 2015

Hearing Event No.

593441

Legislative Authority:

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

Heard:

May 28, 2015 in Oakville, Ontario

APPEARANCES:

Parties

Counsel⁺/Representative

Sergio Folino

Self-represented

MPAC

Barinder Gill and Alim Shariff

Town of Oakville

Susan Price

DECISION OF THE BOARD DELIVERED BY SUBUOLA AWOLERI

INTRODUCTION

1The appeals before the Assessment Review Board (“Board”) are filed by the Assessed Person/Appellant, Sergio Folino, in respect to the returned assessments of $1,139,000 for the subject property in the Town of Oakville for 2013 taxation year and $1,105,000 for 2014 and 2015 taxation years.

2The Appellant had filed a Request for Reconsideration (“RFR”) for the returned assessment of $1,139,000 for 2013 taxation year and a recommended assessment of $1,105,000 was issued by MPAC. There was no communication by the Appellant to MPAC on whether he accepted this recommendation. Consequently, MPAC did not change the returned assessment for 2013 and automatically applied the recommended assessment to the 2014 and 2015 taxation years. The current value assessment was determined by MPAC’s Direct Sales Comparison Approach.

ISSUE

3The subject property is a single-family detached dwelling, built in 1955, located in South Oakville. It has a lot with a frontage of 150 feet, a depth of 150 feet for a total effective site area of 21,344.40 square feet (“sq. ft.”). It has a building total area of 1,437 sq. ft., a basement area of 1,437 sq. ft. of which 583 sq. ft. is finished, and a garage. The subject property benefits from a 5% negative adjustment for Urea Formaldehyde Foam Insulation (“UFFI”). It has an in ground swimming pool and a private cul-de-sac with a 1% adjustment.

4Mr. Folino took the position that the assessment is too high, and submits that the correct assessment should be $940,000. He compared the average sales of similar properties in his vicinity after deducting a 5% adjustment for UFFI on the sales comparables he provided, and he obtained an average sale of $865,000. He further urged the Board to consider the value of $940,000 as the subject property’s current value assessment as of the valuation date January 1, 2012.

5The Town of Oakville was represented by Susan Price.

6The Board has to decide:

• Whether the returned assessments of $1,139,000 for 2013 taxation year and the recommended assessment of $1,105,000 for 2014 and 2015 taxation years for the subject property is at current value as of the valuation date January 1, 2012; and

• Whether the value is equitable with the assessments of similar lands in the vicinity.

DECISION

7The Board finds the current value of the property for the 2013, 2014 and 2015 taxation years to be $1,003,000 (rounded).

8The Board also finds that the assessment at current value is equitable with the assessments of similar lands in the vicinity; hence no further reduction is required to achieve equity.

9The Board orders that the assessment be reduced from $1,139,000 to $1,003,000 for the 2013 taxation year and from $1,105,000 to $1,003,000 for the 2014 and 2015 taxation years.

REASONS FOR DECISION

Legislation

10The Board must have regard to s. 1, 19.(1), 19.2(1), 40.(17), 40.(19), 44.(3)(a) and (b) of the Assessment Act (“Act”) when determining whether or not the assessment under appeal is correct.

11Section 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.

12Section 19.(1) of the Act states:

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

13Section 19.2(1) of the Act provides:

Valuation days

19.2 (1) 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.

Exception

(5) Subsection (1) does not apply in respect of the valuation of land for a taxation year after 2004 if the Minister prescribes a different day as of which land is valued for that year.

14Section 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.

15Section 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.

Section 44.(3)(a) and (b) of the Act state:

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 - Evidence and Analysis

MPAC’s Position

16Barinder Gill, the assessor from MPAC in support of the assessment as returned, presented Exhibit 1 and 1A. Exhibit 1 is a Valuation Report of the subject property, which includes a Market Analysis of four sales comparable, Market Analysis Map, Property Profile of each sales comparable including the subject property and time adjustment factor table. Exhibit 1A is the equity analysis.

17Details of each property on Current Value Study are summarized in Table 1:

Table 1

Address

Assessment ($)

Sale Date

Time/Adjusted Sale ($) with 1% Adj. for cul-de-sac*

Sale Amt.

Effective Site Area

Year Built/ EYB

Building Size (sq. ft.”)

Subject Property

181 Tilford Road

1,139,000 Recommended 1,105,000

N/A

N/A

N/A

21,344.40

1955

1,437

Sale A

224 Tilford Road

924,000

May 2011

991,687 (property has cul-de-sac

950,000

14,810.40

1955/ 1995

1,489

Sale B

162 Westdale Road

1,173,000

Aug. 2009

1,202,000*

999,000

20,908.80

1956/ 1980

1,773

Sale C

207 Westdale Road

1,195,000

July 2010

1,157,000*

1,100,000

15,246.00

1955

1,404

Sale D

241 West Lynn Road

1,119,000

Sep. 2012

948,236*

1,010,000

22,651.20

1955

1,656

18Ms. Gill, in presenting her evidence, stated that of these sales comparables, Sales A and B are considered superior to the subject property, while Sales C and D are considered relatively comparable to the subject property. She emphasized that all the comparable sales are in the same homogenous neighbourhood “A35” as the subject property. She further presented the Board with a Market Map Analysis in Exhibit 1 to corroborate this fact.

19She submits that the subject property is located in a transitional neighbourhood mostly under construction. She stated that the current value assessment of the subject property as recommended during the 2013 RFR of $1,105,000 is reasonable, having considered the fact that the time adjusted sales of the comparables range from $948,236 - $1,202,000 after a 1% adjustment for cul-de-sac not including a value of $45,000 for the assessment of swimming pools since none of the sale comparables have swimming pools. Furthermore, in addition to this, she urged the Board to also consider the fact that the subject property has a private cul-de-sac, an in ground swimming pool, a large effective site area, the largest effective frontage and it is in a prime location for redevelopment. She submitted that all the comparable sales establish the reasonableness of the current value assessment of the subject property.

20Ms. Gill further stated that in reviewing sales for the period of January 2009 to December 2012, house prices increased approximately 47.5% over this time frame in the subject property’s vicinity. That the time adjustments were determined by comparing the sale prices and 2012 current value assessment for 480 sales of residential properties in the area over the sales period.

21The Appellant urged the Board to exclude, the property profile for Sale A in Exhibit 1 since it was not provided to him by MPAC 21 days before the hearing in accordance with the Board’s Rules of Practice and Procedures (“Rules”). Ms. Gill submits that for Sale A, renovation was done after the sale and that the new property profile was only for the purpose of showing the measurement of the building total area prior to renovation, which was 1,489 sq. ft. similar to the subject property at 1,437 sq. ft. She stated that she provided this information at the hearing in order to advice the Board that she is not making up the figures. Ms. Gill further provided the Board with the assessment value of Sale A before and after renovation. She also emphasized that the original structure had a construction quality of 6.5 which is also very similar to the subject property. The Board made a ruling to exclude this evidence on the basis that it had not been produced in accordance with the Board’s Rules. However, Ms. Gill made the adjustment at the hearing in Exhibit 1- Appendix A: Market Analysis, by changing the building total area for Sale A from 1,854 sq. ft. to 1,489 sq. ft., which is the building total area prior renovation. This was not opposed by the Appellant. The Board notes that Ms. Price, the representative of the Town of Oakville, interjected by stating that this difference in measurement for Sale A was argued before the Board in a prior hearing for the same appeal in 2013, which was adjourned.

22On cross-examination, Ms. Gill admitted that Sale C is superior since it abuts a green space and has a 5% adjustment. However, she stated that the time adjusted sale amount accounts for this adjustment by excluding it, and including a 1% adjustment for cul-de-sac to make it comparable to the subject property.

23In reviewing the sales evidence by the assessor, the Board accepts all four comparable sales for being relatively similar to the subject property in so far as age, building size, effective site area, frontage and depth. The Board notes that some are superior to the subject property and for two of the sales there is a difference in age but in all other aspects they are all relatively comparable to the subject property and suitable in establishing the range of current value of assessment of the subject property. The four sales have on average an effective site area of 18,404.1 sq. ft., a total building area of 1,580.5 sq. ft., and they are all located in the same homogenous neighbourhood as the subject property with the same construction quality of 6.5 as the subject property. This is compared to the subject with an effective site area of 21,344.40 sq. ft., a building area of 1,437 sq. ft., built in 1955.

Appellant’s Position

24Mr. Folino presented Exhibits 2 and 3. These are comparable property reports. Exhibit 2 contains nine properties of which Mr. Folino asked the Board to consider only five properties as his sales comparable. Exhibit 3 consists of six properties, which Mr. Folino used for his equity analysis. In his submissions he added Property 4 in Exhibit 2 and Sale D from MPAC as part of his equity analysis for a total of eight properties.

25Details of the Appellants comparable property report on Current Value are summarized in Table 2:

Table 2

Address

Assessment ($)

Sale Date

Time / Adjusted Sale ($) with 1% Adj. for cul-de-sac*

Sale Amt.

Effective Site Area

Year Built/EYB

Building Size (sq. ft.”)

Subject Property

181 Tilford Road

1,139,000 Recommended 1,105,000

N/A

N/A

N/A

21,344.40

1955

1,437

Property 2

216 Tilford Road

994,000

July 2012

977,470

1,030,000

18,295.20

1955

1,581

Property 4

224 Tilford Road (same as SALE A- MPAC

924,000

May 2011

991,687 (property has cul-de-sac)

950,000

14,810.40

1955/ 1995

1,489

Property 7

251 West Lynn Road

853,000

May 2013

N/A

880,000

16,117.20

1959

1,377

Property 8

276 Westwood Drive

878,000

Sept. 2011

908,353.6*

880,000

18,295.20

1957/ 1959

1,916

Property 9

2014 Lakeshore Road West

1,004,000

Sep. 2012

817,097.07*

869,900

22,215.60

1952/ 1982

1,612

26In presenting his evidence, the Appellant also used Sale D from MPAC (in Table 1 above) in his current value analysis and provided the Board with a value of $891,000 for Sale D after making a 5% negative adjustment for UFFI.

27In his submission, the Appellant utilized MPAC’s time adjusted factors in Exhibit 1 to adjust sale values in his evidence. However, time adjustment factors were not available for Property 7, which sold on May 2013. For this sale, the Appellant relied on the assessment value of $853,000, and further made a 5% negative adjustment for UFFI to arrive at $810,000 (rounded) to make this property similar to the subject property. Ms. Gill opposed the use of this sale by the Appellant, stating that time adjustment factors beyond December 2012 for valuation date of January 1, 2012 does not exist and that the Appellant cannot utilize the assessment value in his evidence. The Board agrees with Ms. Gill’s submission and rejects this sale for this reason. In reviewing the entire sale comparables from MPAC and the Appellant, Property 8 has the largest total building area of 1,916 sq. ft. when compared to the subject property at 1,437 sq. ft. It is also not within same homogenous neighbourhood as the subject property. During cross-examination of the Appellant, Ms. Gill directed the Board’s attention to the fact the location of Property 8 in “A28” neighbourhood is inferior for assessment purposes. The Board does not accept this sale.

28Property 9 has a smaller frontage of 112.50 sq. ft. and a larger lot. This property has an impact of medium traffic pattern, which according to MPAC benefits from a 7% negative adjustment. The subject property does not benefit from this negative adjustment. For these reasons the Board does not accept this sale.

29Mr. Folino further made a 5% negative adjustment for UFFI for each of his comparable sales in order to make them comparable to the subject property. He submits that the average using these adjusted values from his sale comparables is $865,000, and consequently this indicates that the assessment for the subject property is incorrect.

30In reviewing the Appellant’s evidence the Board accepts the sale of Property 2 and 4 for being relatively comparable to the subject property in so far as building size, effective site area, frontage and depth and for being in the same homogenous neighbourhood as the subject property. The Board had earlier indicated its acceptance of Sale D from MPAC.

31On cross-examination, Mr. Folino admitted that UFFI is not listed as a variable under each of the five sale comparables he provided and therefore he cannot confirm the presence of UFFI on these properties. However, he reiterated that the property profile of the subject property presented by MPAC also does not list UFFI as a variable but the subject property still benefits from a 5% negative adjustment for UFFI, consequently in order to make the sale comparables similar to the subject property, he made an adjustment for UFFI for each of the sales. The Board notes that Mr. Folino had indicated at the hearing, that he had presented MPAC with information regarding the presence of UFFI on the subject property, which resulted in the adjustment. Mr. Folino could not confirm under cross-examination whether UFFI affects only a property structure and not the lot.

32Furthermore, Mr. Folino admitted under cross-examination that in presenting his evidence, he did not make adjustments for other data elements listed under each of the sale comparables he presented in Exhibit 2, such as 1% cul-de-sac, 7% negative adjustment for medium traffic pattern, 1% negative adjustment for corner lot, since the current value assessment already includes these adjustments. He also admitted that he did not add the assessed value of $45,000 for the in ground swimming pool to the sale comparables to make them similar to the subject property. According to him, the 32 year old swimming pool is more of a liability. That the age and condition of the pool should be considered and should not be added to the sale comparables. None of the sale comparables presented by MPAC and the Appellant have an in ground swimming pool. Ms. Gill did not add the assessed value of $45,000 for an in ground swimming pool to the sale comparables. The Appellant has also not added this value to his sale comparables.

The Board's Analysis and Decision

33In reviewing all the evidence, the Board finds that:

• A 5% negative adjustment for UFFI cannot be made on the five comparable sales presented by Mr. Folino, as he could not confirm under oath that these properties had a problem with UFFI and should benefit from this adjustment.

• Ms. Gill in her evidence made 1% adjustment for cul-de-sac on the time adjustment sale for Sales B, C, and D and not 5% negative adjustment for UFFI, to make these properties comparable to the subject property. Conversely, the Appellant only made a 5% negative adjustment for UFFI on his sale comparables, excluding all the other data elements listed under the property profile of each comparable sale. MPAC has admitted under oath that the subject property benefits from a 5% negative adjustment for UFFI. The Board therefore accepts a 1% adjustment for cul-de-sac on MPAC’s sale comparables and 5% negative adjustment for UFFI on “only” the subject property. Furthermore, the Board was not presented with any expert evidence from either party with respect to the presence of UFFI on structures and not on lots, the Board therefore cannot make any determination on this matter.

• MPAC did not provide any evidence to support its view as to the value of the in ground swimming pool located on the subject property. The Appellant, on the other hand, submitted that the pool has little or no value. Consequently, the Board is in no position to add the value of the pool to the 2012 current value assessment.

• Finally, the Board finds that the five sales presented by MPAC and the Appellant are the best evidence in this matter. Sale A, B, C, D were presented by MPAC and Property 2 and 4 were presented by the Appellant (property 4 is the same as sale A presented by MPAC, which was also used by the Appellant as part of his evidence). These five comparable properties have on average a total effective site area of 18,382.32 sq. ft., a total building area of 1,580.6 sq. ft., and with an average ASR of 1.05. This is compared to the subject property with a total lot size of 21,344.40 sq. ft., a total building area of 1,437 sq. ft., built in 1955. The Board finds that on average these five comparable properties are reasonably comparable to the subject property in terms of location, structure, building size and lot size. The time adjusted sale values for these sales range from $948,236 to $1,202,000. The subject property falls within this range. The Board notes that when compared to these sale comparables, the subject property has the largest frontage, a large effective site area and an in ground swimming pool. The average of the time adjusted sales (including the 1% adjustment for cul-de-sac) for these properties is $1,055,278.6. The Board further makes a 5% negative adjustment for UFFI which gives an assessment of $1,003,000 (rounded).

34Based on all of the above evidence, the Board determines the current value to be $1,003,000 (rounded).

Equity Analysis

35Ms. Gill advised the Board that equity is not an issue in this appeal and therefore she will not be making any submissions on equity, even though she has prepared an equity analysis to present to the Board. The Board advised Ms. Gill of the Board’s obligation in s. 44.(3)(b) of the Act, which mandates the Board to first have reference to the value at which similar lands in the vicinity are assessed and thereupon make an adjustment if this reference provides sufficient evidence to show that the current value is inequitable. Ms. Gill consequently presented her equity analysis marked as Exhibit 1A and served it on the Appellant at the hearing.

36Ms. Gill presented an equity analysis of 30 residential sales within 0.58 kilometers of the subject property with a median ASR of 1.02. Ms. Gill further submits that MPAC standards indicates that for residential property, the median ASR should fall between 0.95 – 1.05., which is in line with the International Association of Assessing Officers (“IAAO”) standards, which state that the median ratio should fall between .90 – 1.10. If the median ratio falls within this range, this reveals that the current value assessments are reflective of sales prices in the vicinity. Ms. Gill submits that similar properties in the vicinity have been assessed at their current values and are equitable, consequently, there is no need for an equity adjustment. However, in the same vein, she urged the Board to adjust the current value it determines, if different from her recommended value of $1,105,000 and multiply it by the median ASR of 1.02 in order to achieve equity. In the Board’s view, this is an incorrect application of the ASR, as it would result in a 2% increase. Only ASR’s below one can be utilized for equity.

37In support of equity, Mr. Folino presented Exhibit 3, a Comparable Property Report with six properties and in his evidence he added two more properties, Property 4 at 224 Tilford Road and Sale D (from MPAC) – 241 West Lynn Road. Ms. Gill argued that the Appellant’s six comparables are not located in the same homogenous neighbourhood as the subject property, some are two storeys, they all have an adjustment for medium traffic pattern and are located in an inferior neighbourhood compared to the subject property and that she is not sure how this is an appropriate sample size for equity. Mr. Folino submits that this shows properties similar in nature in the vicinity that have a lower assessment than the subject property.

38The comparable properties utilized by Mr. Folino’s equity analysis has no sales, no time adjustments and the properties provided by him is too small a sample in order for the Board to make any determination on this issue. These six properties have a lower construction quality of 6.0 than the subject property. All the properties are not within the same homogenous neighbourhood as the subject property, in fact they are all located in an inferior neighbourhood when compared to the subject property. Mr. Folino argued that he had read a decision of the Board that states that half more or less in construction quality has no effect on assessment; however, he did not cite what case he is referring to in his submissions. The other two properties used by Mr. Folino, Property 4 at 224 Tilford Road and Sale D (from MPAC)– 241 West Lynn Road, both have an average ASR of 1.04, which is still within the acceptable range. Consequently, the Board accepts Ms. Gill’s evidence and argument that these six properties are not similar enough to the subject property for direct comparisons of their assessments.

39The best evidence for equity is the ASR analysis provided by MPAC showing that the general level of assessment is reasonably close to the level of sales. The median ASR of 1.02 falls within the acceptable range, which indicates that the current assessment value is relative to the sales price in the vicinity. An ASR falling below 1.0 is an indication that MPAC’s valuation methodology may be resulting in assessments below values determined in the market place. Conversely, an ASR falling above 1.0 is an indication that MPAC’s valuation methodology may be resulting in assessments above values determined in the market place.

40Mr. Folino’s evidence in this regard does not lead the Board to the conclusion that the assessment of the property should be reduced below its current value to make it equitable with the assessments of similar lands in the vicinity.

41For 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.

CONCLUSION

42Based on all of the evidence, the Board determines the current value to be $1,003,000 (rounded) and finds this value to be fair and equitable. Therefore, the Board reduces the returned assessment from $1,139,000 to $1,003,000 for 2013 taxation year and from $1,105,000 to $1,003,000 for 2014 and 2015 taxation years.