Strong v. Municipal Property Assessment Corporation, 2016 CanLII 2588

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: January 20, 2016

FILE NO.: WR 137736

Assessed Person(s): Doreen Margaret Mary Strong Nelson Frank Luigi Strong

Appellant(s): Nelson Frank Strong Doreen Mary Strong

Respondent(s): Township of Springwater Municipal Property Assessment Corporation (“MPAC”) Region 16

Property Location(s): 1794 Phelpston Road

Municipality(ies): Township of Springwater

Roll Number(s): 4341-030-003-09900-0000

Appeal Number(s): 3045162 and 3087795

Taxation Year(s): 2014 and 2015

Hearing Event No.: 599030

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

Heard: October 20, 2015 in Springwater, Ontario

APPEARANCES:

Parties	Representative
Nelson Frank Strong	Nelson Frank Strong
Doreen Mary Strong
MPAC	Chris Miller
Township of Springwater	No one appeared

MEMORANDUM OF ORAL DECISION DELIVERED BY VINCENT STABILE ON OCTOBER 20, 2015

INTRODUCTION

1The subject residential property was built in 1900. It was renovated in 1950. The MPAC records indicate that it was further renovated in 2010 by an addition of 835 square feet (“sq. ft.”). A further major renovation was done in 2011 at which time the first floor was gutted a second floor, a new roof and new windows were added. New electrical wiring with a panel was also added. Further, a new furnace was installed and a new half bath (sink and toilet) was created. The original kitchen and bath remain. It now comprises 2,346 sq. ft. of building area. It has a detached garage comprising 605 sq. ft. built in 1973. The quality class according to MPAC’s rating system is 6.5. Many of the elements remain unfinished. The property is occupied by the owners/appellants.

2For the 2014 taxation year it is assessed at $167,000 and for the 2015 taxation year it is assessed at $157,000.

3Nelson Frank Strong and Doreen Strong (“the appellants”) reject the assessment and submit that the assessment should remain at $105,000 as set by the Assessment Review Board (“Board”) in a previous decision relating to the 2008 assessment cycle. At that time the Board evidently allowed a reduction of 34% for the poor state of the property.

ISSUES

4The issues to be determined are:

(i) The current value of the subject property as of January 1, 2012, being the “valuation day”.

(ii) Whether an assessment at current value is equitable with that of similar lands in the vicinity.

DECISION

5For reasons delivered orally, and summarized below, I find:

(i) The current value for the subject property as of January 1, 2012 is $157,000.

(ii) The assessment at current value is equitable with the assessments of similar lands in the vicinity.

(iii) The assessment is reduced for the 2014 taxation year from $167,000 to $157,000.

(iv) The assessment is confirmed for the 2015 taxation year at $157,000.

MPAC’s Position

6Chris Miller testified for MPAC. His Valuation Report was filed and marked Exhibit 1. He stated that he used the Direct Sales Comparison Approach to value. He reviewed the history of renovations that have been undertaken since the Board’s last decision in 2009 relating to the subject property.

7Mr. Miller stated that only 51% of the renovation elements have been completed, acknowledging that 49% of the elements remain unfinished.

8Mr. Miller proposed sales of four comparable properties in his Market Analysis (Appendix “A” of Exhibit 1). He stated that all four comparable properties were superior to the subject property since the subject property remains “unfinished”. His evidence is that that the market value of the subject property has first been determined as a completed structure. He testified that the value has then been adjusted with a negative adjustment for the unfinished components. A further negative adjustment of $5,000 has been applied for a deck at the rear of the house he stated which has limited accessibility. Additionally, “an overall 34% negative adjustment to the entire property has been carried forward from the previous base year ARB decision in 2009”. The property had been assessed at $167,000 for the 2014 taxation year. However, once he completed his analysis, as set out in Exhibit 1, Mr. Miller recommended that the assessment be reduced to $157,000. That value was implemented by MPAC for the 2015 taxation year.

9Two of the proposed comparable properties, “A” and “D”, are renovated. They range in value $138.46 – $164.38 per sq. ft. Two are new, never renovated, “B” and “C”. They range in value $148.67 – $192.47 per sq. ft.

10The 2015 assessment of the subject property is at a rate of $66.92 sq. ft. Accordingly, Mr. Miller submits that the assessment of $157,000 is reasonable in the circumstances.

11In his Valuation report, Mr. Miller also included an Equity Study consisting of sales of 30 properties, with a median Assessment to Sales Ratio (“ASR”) of 0.99. He stated that ASR studies are a principal tool for objectively measuring assessment performance. He also stated that MPAC standards indicate that for residential properties the median ASR should fall between 0.95 – 1.05. Since the median ASR of the study relied upon in these appeals falls within that range he submits that no further adjustments should be made.

Appellants’ Position

12Mr. Strong testified. His documentary evidence consists of the Grad Report received from MPAC, marked as Exhibit 2 and three groups of photographs depicting the interior and exterior of the house, which were marked as Exhibits 3, 4 and 5.

13He confirmed that he too was using the Direct Sales Comparison approach to value, but provided no evidence as to sales of other properties.

14He stated that since 2010 they have spent the sum of $200,000 on renovations. However, his evidence is that not all renovations have been completed. The basement height remains low at six feet, plumbing and electrical work remain to be done, the foundation remains an issue, and they have no hot water. Mr. Strong stated that he now has to contend with a new building code, in force since 2010. He submits that the assessment should remain the same as in 2008, at $105,000. This is with the 34% reduction allowed by the Board in its previous decision.

The Legislation

15The Board’s jurisdiction to make corrections to an assessment is found in the Assessment Act (“Act”). Section 19.(1) of the Act provides that the assessment of a property must be based upon its current value:

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

16Section 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.

17Section 19.2(1) of the Act provides:

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.

18Section 44.(3) of the Act states:

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.

19Section 45 of the Act states:

45. Powers and functions of the Assessment Review Board. – Upon an appeal with respect to an assessment, the Assessment Review Board may review the assessment and, for the purposes of the review, has all the powers and functions of the assessment corporation in making an assessment, determination or decision under this Act, and any assessment, determination or decision made on review by the Assessment Review Board shall be deemed to be an assessment, determination or decision of the assessment corporation and has the same force and effect.

Analysis

20The best evidence of value is the sale of the subject property. There is no recent sale of the subject property to inform the Board. Thus the Board looks to the sales of similar properties in the vicinity to determine current value.

21The Board accepts the Direct Comparison approach to value as a valid approach. The Board also accepts a determination of current value based upon the sale values per square foot of valid sales of comparable properties.

Current Value

22The approach and resulting calculations of the assessor are not seriously challenged. The comparables proposed by Mr. Miller are the best evidence received. The sale prices, per square foot from those sales, result in a median sales value per square foot of $151.42 for renovated homes and $170.57 for new non-renovated homes.

23The 2015 assessment of $157,000 for the subject property is at a rate of $66.92 sq. ft. The best evidence, which I accept, is that the renovations are 51% completed. The 2015 assessed value per square foot is well below the median sales price per square foot for either renovated or non-renovated homes. Accordingly, I find that the assessment proposed by the assessor is supported by the sales evidence presented and takes into account the unfinished state of the property.

24I therefore find that the current value of the subject property is $157,000 for the 2014 and 2015 taxation years.

Equity

25Having established the current value of the subject property, the final issue for the Board to determine is whether an adjustment should be made to the assessment of the subject property in order to make it equitable with the assessments of similar properties in the vicinity.

26The Act requires the Board to lower an assessment below current value if required to make the assessment equitable with the assessments of similar properties in the vicinity.

27On the issue of equity, the onus rests with the appellant to satisfy the Board that equity has not been achieved.

28The Board received an Equity Analysis from MPAC, referred to above in these reasons. Mr. Strong did not challenge that study.

29Accordingly, the Board accepts the evidence from MPAC and finds that there is no evidence before it to support a reduction in the assessment below current value.

CONCLUSION

30The assessment for the 2014 taxation year is reduced from $167,000 to $157,000 and the assessment for the 2015 taxation year is confirmed at $157,000.

31This finding covers the entire assessment cycle therefore there are no deemed appeals.