Lane v. Municipal Property Assessment Corporation, 2016 CanLII 40915

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE:

June 30, 2016

FILE NO.:

WR 140242

Assessed Person(s):

Daniel John Lane, Judith Susan Lane and Terrance N. Clark Estate

Appellant(s):

Daniel John Lane, Judith Susan Lane and

Terrance N. Clark Estate

Respondent(s):

Municipal Property Assessment Corporation (“MPAC”)

Region 26

Respondent(s):

Municipality of Lambton Shores

Property Location(s):

6542 West Parkway Drive and

6538 West Parkway Drive

Municipality(ies):

Municipality of Lambton Shores

Roll Number(s):

3845-460-040-31100-0000

3845-460-040-31401-0000

Appeal Number(s):

3123981, 3123982, 3159474 and 3159422 (deemed appeals)

Taxation Year(s):

2015 and 2016 (deemed appeals)

Hearing Event No.:

620829

Legislative Authority:

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

Heard:

April 15, 2016 in Grand Bend, Ontario

APPEARANCES:

Parties

Counsel^+^/Representative

Judith Lane and Craig Lane

Self-represented

MPAC

Don Mitchell^+^

Municipality of Lambton Shores

No one appeared

DECISION OF THE BOARD DELIVERED BY DAN WEAGANT

INTRODUCTION

1The subject properties share a property line and are both waterfront properties in an area referred to as Ipperwash Beach. Owing to the similarity of the two properties, and the fact that Judith Lane is the Executor of the Terence Clark Estate, the parties agreed to have the appeals heard concurrently and further agreed to the Board rendering its decision together for both properties.

26542 West Parkway Drive (Lane property) has a lot area of 36,008 square feet (“sq. ft.”), with a waterfront measuring 75 feet. The property is improved with a single family dwelling measuring 1,380 sq. ft. on one level. The dwelling does not have a basement. It was constructed in 1977 and has a detached garage.

36538 West Parkway Drive (Clark property) has a lot area of 21,610 sq. ft., with a waterfront measuring 45 feet. The Clark property has a single family dwelling of 1,194 sq. ft. on one level and also includes a detached garage. The Clark property dwelling was constructed in 1971.

4For the 2015 tax year, MPAC has returned a current value assessment of $607,000 for the Lane property and $471,000 for the Clark property. Both valuations were determined by a valuation study prepared for and delivered at the hearing by Jane Sokol–Kennedy.

5Judith Lane and Craig Lane believe the current value assessment returned by MPAC is too high and that the current values are $480,000 for the Lane property and no more than $350,000 for the Clark property.

6The Board must determine two things at this hearing. The first is the current value of the subject properties, as of January 1, 2012, which is the valuation date for the 2015 taxation year under appeal. Secondly, the Board must also decide, when reference is made to the assessments of similar properties in the vicinity, if the assessment of the subject properties should be reduced from the current value determined, for the purposes of equitable assessment.

7In making these determinations, the Board must decide in part, what if any impact, recent activities in and around the Ipperwash Beach area and the neighboring Stoney Point and Kettle Point First Nation lands have on values of the properties under appeal.

DECISION

8The Board finds that the current value of 6542 West Parkway Drive is $555,000. The Board finds that the current value of 6538 West Parkway Drive is $471,000.

9The Board also finds that when reference is made to the assessments of similar properties in the vicinity, the assessments of both properties should be reduced as follows to be considered equitable:

• 6542 West Parkway Drive - $527,000

• 6538 West Parkway Drive - $447,000

10Accordingly, the assessment of 6542 West Parkway Drive is reduced from $607,000 to $527,000 in the Residential Tax Class for the 2015 taxation year. The assessment of 6538 West Parkway Drive is reduced from $471,000 to $447,000 in the Residential tax class for the 2015 taxation year.

LEGISLATION

11In making its determination of these appeals, the Board must consider the relevant sections of the Assessment Act (“Act”):

12Section 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.

13Section 19.(1) of the Act states:

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

14Section 40 of the Act states:

40.(1) Appeal to Assessment Review Board. Any person, including a municipality, a school board or, in the case of land in non-municipal territory, the Minister, may appeal in writing to the Assessment Review Board,

(a) on the basis that,

(i) the current value of the person’s land or another person’s land is incorrect,

(ii) the person or another person was wrongly placed on or omitted from the assessment roll,

(iii) the person or another person was wrongly placed on or omitted from the roll in respect of school support,

(iv) the classification of the person’s land or another person’s land is incorrect, or

(v) for land, portions of which are in different classes of real property, the determination of the share of the value of the land that is attributable to each class is incorrect; or

(b) on such other basis as the Minister may prescribe.

15Section 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.

MPAC’S EVIDENCE

16Ms. Sokol-Kennedy used the direct comparison approach to value when making her assessment of the current values of the two subject properties. She cited the same six comparable properties for her valuation analysis for both properties. The six comparable properties sold between September 2009 and November 2012. They are all properties that are within the Ipperwash Beach area, like the subject properties. To account for price changes over time in this market, Ms. Sokol-Kennedy applied a Time Adjustment Factor (“TAF”) to each of the six sales so that they could be compared to each other and the subject properties as though they had sold on the valuation date of January 1, 2012. These TAFs were derived from the price change trend generated from 480 sales of residential properties in the local area, within the time span represented by the six properties used for comparison. Table A compares the characteristics of the six properties in the MPAC study, and the two properties under appeal.

TABLE A

Sale Price

and Date

TAS Price

Lot Area/Lake Frontage

Living Area

Current Value

Assessment

6538 West Parkway Drive

21,610 sq. ft./

45 feet

1,194 sq. ft.

$471,000

6542 West Parkway Drive

36,008 sq. ft./

75 feet

1,380 sq. ft.

$607,000

Sale A

$375,000

$366,120

15,375 sq. ft./

71 feet

1,272 sq. ft.

$371,000

Sale B

$790,000

$776,547

20,028 sq. ft./

75 feet

1,841 sq. ft.

$512,000

Sale C

$510,000

$512,962

21,341 sq. ft./

75 feet

1,840 sq. ft.

$500,000

Sale D

$577,500

$616,672

34,380 sq. ft./

70 feet

1,594 sq. ft.

$566,000

Sale E

$431,100

$422,799

24,750 sq. ft./

50 feet

1,298 sq. ft.

$418,000

Sale F

$400,000

$414,853

121,532 sq. ft./

80 feet

1,621 sq. ft.

$352,000

17Ms. Sokol-Kennedy believes the most comparable property in her analysis for the Lane property is Sale D, located at 6530 West Parkway Drive. Sale D is older than the subject property, but has five cabins on site that provide additional living area. Ms. Sokol-Kennedy selected Sale D as most comparable owing to its similarity in lot size and length of waterfront, which she considers to be the most important aspects of property value for lakefront properties. Sale D sold in September 2009 for $577,500, with a TAS value of $616,672.

18Ms. Sokol-Kennedy also testified that adjustments to the value of the Lane property had been made to take into account its proximity to commercial lands adjacent, and a nearby public walkway. The total of these two adjustments is a reduction of 10 per cent of the property otherwise assessed, and is reflected in the value returned.

19Ms. Sokol-Kennedy also compares the Lane property to Sales B and C. Sale B is considered to be superior to the subject property. It has a similar lakefront and lot size, but has a larger living area (50 per cent larger) and is approximately 17 years newer. Sale B also has a second detached garage on the property. It sold in August 2012 for $790,000, with a TAS value of $776,547. Sale C, by contrast, is considered to be inferior to the subject property, with a sale price of $510,000 that occurred in October 2011. Sale C has a larger dwelling than the subject property, a similar lot size and lakefront and is newer than the Lane property.

20Ms. Sokol-Kennedy concludes that Sales B and C establish a reasonable range of value for the subject property, and that Sale D, being most comparable, the value of the subject property should fall within the range established and be at or near the value of the most comparable property in the analysis. She concludes that the returned value of the Lane property is therefore reasonable and correct.

21For the Clark property at 6538 West Parkway Drive, Ms. Sokol-Kennedy believes Sales C and E are the most comparable, and serve to provide a range of value for the subject property. Sale C has more lake-frontage and a dwelling with more living area than the subject property, and is approximately 16 years newer. Like the subject property, it has a detached garage with a similar lot area and 30 more feet of lake-frontage, which is a major contributor to value. Ms. Sokol-Kennedy considers Sale C to be superior in value to the subject property.

22Sale E, by contrast, has a similar dwelling and lot size when compared to the subject property with a slightly longer lakefront of 50 feet. It is 33 years older than the Lane property and is without a detached garage. Ms. Sokol-Kennedy considers Sale E to be inferior to the subject property.

23Sale C sold for $510,000 in $510,000 in October 2011, with a TAS value of $512,962. Sale E sold in September 2012 for $400,000, with a TAS value of $414,853. When the subject property is compared to these two properties, Ms. Sokol-Kennedy submits that the subject property’s value should fall between $414,853 and $512,962 and that the returned value of $471,000 is reasonable and correct.

APPELLANTS’ EVIDENCE

24Ms. Lane believes the assessments of the two properties are too high, for identical reasons. She summarized her family’s concerns with respect to the occurrences in December 2014 and 2015 that, in her opinion, create an atmosphere where the two subject properties have fallen in market value.

25In 2014, traffic barriers, similar to ones used on Provincial highways, were removed from the limits of Ipperwash Road, West Ipperwash Road and Army Camp Road, where these three public roads cross the Ipperwash Beach. It is Ms. Lane’s testimony that individuals connected with either the Kettle Point or Stoney Point First Nation were responsible. These barriers had been in place for a long time and served the area residents in that they provided a robust and visible, and in Ms. Lane’s view, effective ‘boundary’ between the public and private areas of the beach. The effects of the removal of these barriers, and their subsequent replacement with posts and rope were summarized by Ms. Lane:

• Beach users and boaters now spill over onto the private beachfront areas, including that of the two properties under appeal.

• Vehicles now have unfettered access to the private beach areas.

• The Ontario Provincial Police, who have jurisdiction in the Municipality are reluctant to clamp down on trespass incidents owing to the larger land claim/treaty issues at play in the Ipperwash Beach area.

• Placement of signage related to land claims in specific areas along the beach.

26These removals, according to Ms. Lane, are part of an ongoing land claim dispute between the First Nations communities and the Provincial and Federal governments. There is no evidence that the actions of the First Nations members are directed in any way toward the cottagers either individually or as a group. However, the complexity of the dispute has led to a few things of concern, according to Ms. Lane.

27In addition, the Army Camp Road and West Ipperwash Road lake access points have been taken over by the neighboring First nations communities, who subsequently began charging a fee for lake and beach use in these areas, including the launching of boats and other watercraft. This has directed the majority of lake access to Ipperwash Road, which is one property away from the Lane property, and is now the only free public access to the Lake along Ipperwash Beach. This has the following effects:

• There is far more boat and personal water craft traffic on the frontage of the subject properties.

• The area is much noisier than it was prior to 2015.

• Garbage left behind by the beach users has become a nuisance and a problem that is not being addressed by the local municipality.

• The owner’s private access to the lake is cut off by public beach users overflowing from the public access point.

• Activity along the frontage of the subject properties now starts at 6:30 a.m. and doesn’t end until after 11p.m., affecting the quiet enjoyment of their property.

28Ms. Lane also indicated that the location of the subject properties has an impact on value. Specifically, she cites the property immediately to the east, which is an unoccupied commercial property. It has been vacant for some time and is becoming unkempt. There is also commercial property across West Parkway Drive which operates as a restaurant and bar. It opens at 10 a.m. and closes late in the evening, with loud music playing over most of this time during the busy summer months.

29Lastly, Ms. Lane provided the Board with a real estate listing for a property known as 9669 Agnes Place, which is also a lakefront property in the Ipperwash Beach area.

Ms. Lane pointed out that 9669 Agnes has 95 feet of lakefront, and has four bedrooms on two storeys. It also has an additional bunkhouse on the property and is listed for $579,000. Ms. Lane considers 9669 Agnes to be superior to the Lane property. It has been listed for several months and has not sold, indicating that values have fallen in the area and that the assessment returned on both properties under appeal are too high.

30Ms. Lane concludes that with the property values in the area falling, owing to the land dispute issues and the increasing stigma associated with that, the adjacent derelict commercial properties and increased activity by public beach users at the subject properties, their respective assessments should be reduced to $480,000 for 6542 West Parkway Drive and $350,000 for 6538 West Parkway Drive.

ANALYSIS

6542 West Parkway Drive – Lane Property

31MPAC testified that after making allowances for proximity to commercial property and a public walkway, the subject property should be valued at $607,000. This would translate to a value of $674,000 before these adjustments (10 per cent reduction in testimony) were applied. This is the value that should be applied to the comparables in Ms. Sokol-Kennedy’s analysis, as none of the properties in that analysis have such a reduction applied.

32The Board did not receive any documentary evidence or hear any testimony from the Appellants that spoke to quantification of the impact to current value resulting from events in 2014 and 2015. The Board has no doubt that the concerns of the Appellants and their neighbours are very real. There is also uncertainty with respect to the future. Ms. Lane’s photographic record of the use of the beach in front of the subject properties indicates that public beach goers are occupying this area in large numbers. But these conditions are not enough to qualify as evidence impacting on current value. Neither Ms. Lane, nor Mr. Lane was able to point to any specific evidence related to the dollar value impact of the changes in their neighbourhood on the value of their property. Ms. Lane did include, as Appellants’ Exhibit 4, a real estate listing, dated April of 2016. The Board gives this evidence very little weight in making a determination of the current value for the subject property. There is no evidence as to why this property has not sold, except the assertion by Ms. Lane that properties are generally falling in value. This may be true, but in the final analysis, a single listing is not enough to direct a finding for another property, which is what Ms. Lane is asking the Board to do.

33In contrast, Ms. Sokol-Kennedy provided a sales analysis of six properties that sold in the vicinity of the subject property. Her comparison sought to place the subject property in a range of values by making reasonable adjustments to the comparable properties to make them directly comparable to the subject property for the purpose of determining its current value. The sales information was adjusted to equate these sale values as though they occurred on the valuation date applicable to the 2015 taxation year, which is January 1, 2012. This approach assists the Board in making a decision that meets the requirements of the Act.

34Ms. Sokol-Kennedy seeks to compare the property at 6530 West Parkway Drive (Sale D) with the subject property, and makes a reasonable argument that, among the six properties in her analysis, it most closely matches the characteristics of the subject property. The Board agrees to a point. The Board notes that this comparison was made after a downward adjustment was made to the subject property because of its proximity to commercial and public access land uses. As a result, the Board finds the subject property, before adjustments, is equivalent to the value of Sale D. The Board further finds that the adjustment, when applied, results in a current value for the subject property of $555,000.

6538 West Parkway Drive – Clark Property

35In the absence of documentary evidence from the Appellant, as was the case for the Lane property, the Board relies on the submissions of MPAC to determine the correct current value of the Clark property.

36Ms. Sokol-Kennedy refers to Sales C and E as the most comparable to the subject property in determining its value. These two properties have TAS values of $513,000 (rounded) and $423,000 (rounded) respectively. She testified that the current value of the subject property should lie between these two values. Based on the evidence at the hearing, the Board agrees and notes that the mid-point between these two values is $468,000, which is very close to the value returned for the 2015 taxation year of $471,000 and as a result, the Board confirms the assessment.

37With respect to equity, the Board has only the evidence of MPAC regarding the six, similar properties included in the valuation study, applied to both properties. When the assessments of these six properties are compared to their time adjusted saleTAS prices, the resultant Assessment to Sale Ratios (“ASR”) range from 0.66 to 1.01, with a median of 0.95. This result indicates that similar properties in the vicinity are generally assessed below their sale or market values. While MPAC did not make a specific submission with respect to equity of assessment in this case, this does not absolve the Board from making a determination on equity. The Board must use the best evidence available at the hearing for the purpose and uses the information available to do so.

38Accordingly, the Board finds that the current value determined above is reduced by a multiplier of 0.95 to reflect the median ASR from the evidence available at the hearing, to reflect equitable assessment, when reference is made to the assessments of similar properties in the vicinity.

DECISION

39The Board finds that the current value of 6542 West Parkway Drive is $555,000. The Board finds that the current value of 6538 West Parkway Drive is $471,000.

40The Board also finds that, when reference is made to the assessments of similar properties in the vicinity, the assessments of both properties should be reduced as follows to be considered equitable:

• 6542 West Parkway Drive - $527,000

• 6538 West Parkway Drive - $447,000

41Accordingly, the assessment of 6542 West Parkway Drive is reduced from $607,000 to $527,000 in the Residential Tax Class for the 2015 taxation year. The assessment of 6438 West Parkway Drive is reduced from $471,000 to $447,000 in the Residential tax class for the 2015 taxation year.

2016 DEEMED APPEAL

42An 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 appeals before March 31, 2016. For that reason, this decision also applies to the 2016 taxation year.

43Section 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.