1550062 Ontario Limited and Jacob Assif v. Municipal Property Assessment Corporation, 2016 CanLII 35413

Assessment Review Board

ISSUE DATE: June 7, 2016 FILE NO.: WR 138036

Assessed Person(s): 1550062 Ontario Limited Appellant(s): 1550062 Ontario Limited and Jacob Assif Respondent(s): Municipal Property Assessment Corporation ("MPAC") Region 16 Respondent(s): Township of Tay

Property Location(s): 81 Dock Lane Municipality(ies): Township of Tay Roll Number(s): 4353-050-001-00137-0000 Appeal Number(s): 3046716, 3087456 and 3155340 (deemed 2016 appeal) Taxation Year(s): 2014, 2015 and 2016 (deemed appeal) Hearing Event No. 602135

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

Heard: November 19, 2015 in Victoria Harbour, Ontario

APPEARANCES:

Parties	Representative
1550062 Ontario Limited and Jacob Assif	Paul Grosman
MPAC	Darren Manuel
Township of Tay	No one appeared

DECISION OF THE BOARD DELIVERED BY CRISTINA MARQUES

ISSUE

1The subject property is part of the Skyline Development of condominiums in Port McNicoll. The condominium is 3,829 square feet ("sq. ft.") with an unfinished basement of 2,389 sq. ft., and a detached garage. It is situated on a 14,086.84 sq. ft. lot, with an effective water frontage of 99 feet located on shores of Severn Sound.

2The assessment was returned at $1,645,000 for the 2014 and 2015 taxation years. Darren Manuel, the assessor appearing for MPAC, takes the position that the assessment as returned is at current value as required by s. 19.(1) of the Assessment Act, R.S.O. 1990, c. A.31, as amended ("Act").

3Paul Grosman, the representative for the appellant, believes the subject property is inferior to MPAC's suggested comparables in evidence before the Board. He is of the opinion that a better value for the property is approximately $1,100,000.

4The Assessment Review Board ("Board") must determine the correct current value for the 2014 and 2015 taxation years as of the legislated valuation day, January 1, 2012 and whether that value is equitable, having reference to the assessments of similar lands in the vicinity.

DECISION

5The Board finds that the correct current value of the property is $1,450,000 for taxation years 2014 and 2015 and that it does not require a further adjustment to make it equitable with the assessments of similar lands in the vicinity. Accordingly the Board reduces the assessment of the subject property from $1,645,000 to $1,450,000 for the 2014 and 2015 taxation years, and for the deemed 2016 taxation year.

REASONS FOR DECISION

Legislation

6The Board must have regard to s. 1, s. 19.(1), s. 19.2(1), s. 40.(19), s. 44.(3)(a) and (b), and s. 45 of the Act when determining if the assessment under appeal is correct.

7Section 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.

8Section 19.(1) of the Act states:

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

9Section 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.

10Section 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.

11Section 44.(3)(a) and (b) 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.

12Section 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.

Board's Analysis

Current Value

13The best indicator of current value is an arm's length and market-tested sale of the property on the valuation date, January 1, 2012, or close to it. Since the subject property did not sell, the Board relies upon the sales of similar properties in the vicinity on or close to the valuation day.

14Mr. Manuel testified that MPAC values properties like the subject property using the Direct Comparison Approach to Value. In support of the assessment as returned, the assessor presented Exhibit 1 consisting of a location and current value study map; current value study with three comparable sales; photographs of the subject property and of the suggested comparables; property profile; time-adjustment factors table; sales for price changes over time schedule and an equity analysis studies.

15Mr. Manuel identified three sales that are, in his view, similar to the subject property. They were chosen to demonstrate the relationship between MPAC's valuation and the sales in the marketplace, and to show the accuracy of MPAC's method of valuation through the Direct Comparison Approach to Value.

16Mr. Manuel submitted that the time adjusted sale prices for the three comparables provide an indication of likely values for the subject property. Details of each property on current value study are summarized in Table 1:

Table 1

Address	Assessment	Sale Date	Sale/ Time Adjusted Sale ($)	Building Size (sq. ft.)	Quality of Construction	Lot Size (sq. ft.)	Year Built
Subject Property (condominium)	81 Dock Lane	1,645,000	n/a	n/a	3,829	Q9	99 ft. frontage/ 14,086.84 sq. ft.
Sale A (condominium)	60 Waterfront Circle	1,117,000	Sep. 2009	1,148,000/ 1,172,281	2,836	Q8	80 ft. frontage/ 9,520 sq. ft.
Sale B (condominium)	93 Dock Lane	2,038,000	July 2010	3,000,000/ 3,071,835	4,216	Q9	125 ft. frontage/ 33,154,78 sq. ft.
Sale C (not a condominium)	314 Watson Road	2,851,000	June 2009	3,600,000/ 3,752,957	8,230	Q8.5	489.5 ft. Frontage/ 12.31 acres

17Mr. Manuel testified that the time adjusted sale prices of the three comparables provide a range of likely values for the subject property between $1,172,281 and $3,752,957. He relied on these sales to determine whether properties are assessed at or close to their current values.

18Mr. Manuel provided MPAC's analysis of 240 sales in the neighbourhood of the subject property between January 2009 and December 2012, and stated that the area experienced an overall increase in real estate values of approximately 6.59% over that time frame. Time adjustment factors for each month during the study period were provided together with the data for the 240 sales analyzed. He submitted that the assessment as returned for the subject property at $1,645,000 is within the range, and for that reason the assessment as returned is reflective of current value.

19Mr. Grosman disagreed with Mr. Manuel: in his view the sales presented by MPAC are not comparable to the subject property. He argued that MPAC fails to recognize that the subject property is modest in comparison to the suggested comparables, because they are all of much better quality and in one case not a condominium property.

20Mr. Grosman, in support of his position that the subject property is over-assessed, presented Exhibit 2 including photographs of the subject property; a news release about the development of the condominium project; and five MLS® listings of suggested comparable properties.

21He also called Jenny Belcourt as a witness. She testified that she was employed as a real estate administrator for Skyline International Development between 2008 and 2014, and Mr. Manuel agreed she is qualified to express opinions in regards to the subject property.

22Ms. Belcourt testified that Port McNicoll was envisioned, planned and designed as a large development that did not become reality. The planned Yacht Club, Marina and parks were not constructed. The lots that were sold in 2008 for $550,000 are being marketed in 2016 for $378,000. Out of the few lots that were sold even less have been built up on. As such the subject property's potential value was not realized, and the marketability of the subject property is considerably reduced.

23The subject property has been on the market since 2009, and is currently listed at $1,399,000. In 2015 there was only one offer of purchase for $1,100,000 including the existing furniture and décor. The sale was not concluded because upon inspection of the subject property, deficiencies were found, and the purchasers lost interest.

24In regards to MPAC's suggested comparable at 93 Dock Lane, Ms. Belcourt testified that it is a superior property in relation to the subject property because it is surrounded on three sides by deep water, versus the subject property' which only has water on one side and it is not deep water, and because it is a much larger dwelling.

25Mr. Grosman presented five MLS® listings of properties in Tiffin by the Bay, in Midland, Exhibit 2, and asked Ms. Belcourt to comment on their comparability to the subject property. She stated that the properties in Midland are similar to the subject property because they are located on similar developments with access to water, and these four properties were marketed for considerably lower values than the subject property's assessment.

26The Board did not include the properties suggested as comparables by Mr. Grosman in its analysis because the MLS® listings have limited information, and details such as lot, building size and year built were not provided.

27For the purpose of a current value analysis the Board also rejects as good comparables the following MPAC sales: Sale B because it has a larger lot, it has a 1,900 sq. ft. residence above the detached garage, and it sold for $3,000,000, a good indication that it may be a considerably superior property to the subject property. Sale C is also rejected because it is a free hold property in comparison with the subject property which is a condominium property, and because it is an 8,000 sq. ft. home located on a 12 acre lot.

28A major factor in the value of recreational properties situated on water is their linear frontage. The Board has accepted the property located at 60 Waterfront Circle, which sold for a time adjusted sale value of $1,172,281, or $14,653 per linear foot of waterfront, as the best evidence of current value. The Board can adjust the value of the subject property by applying the value per linear foot of waterfront of the comparable accepted by the Board, that being $14,653. This value per linear foot applied to the subject property results in a CVA of ($14,653 x 99) = $1,450,000 (rounded).

29The Board determines the current value of the subject property to be $1,450,000.

Equity

30Section 44.(3)(b) mandates and directs that after determining current value, the Board shall have reference to the value at which similar lands in the vicinity are assessed. The Assessment to Sales Ratio ("ASR") is a tool often used to determine if an equity adjustment is required. An ASR is determined by dividing the assessment as returned with the time adjusted sale price. 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.

31Mr. Grosman did not present any equity evidence. MPAC relied on the sales of 30 properties, all within 1.14 kilometres of the subject property, to determine whether properties are assessed at or close to their current values, as listed in the Equity analysis of Exhibit 1. The median ASR for the sold properties is 1.03, which is within MPAC's acceptable range of ASRs between 0.95-1.05. This result satisfies the Board that generally speaking, MPAC's valuation methodology is achieving values similar to those determined in the marketplace and no further equitable adjustment is warranted.

CONCLUSION

32The Board determines the current value of subject property to be $1,450,000, and that it does not require a further adjustment to make it equitable with the assessments of similar lands in the vicinity. The Board reduces the assessment of the subject property from $1,645,000 to $1,450,000 for the 2014 and 2015 taxation years.

2016 DEEMED APPEAL

33An appeal for the 2015 taxation year is presently before the Board. Section 40.(26) of the Assessment Act 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 2015 appeal before March 31, 2016. For that reason, this decision also applies to the 2016 taxation year.

34Section 40.(26) of the Act directs:

Deemed appeals, 2009 and subsequent years

(26) 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.