James David Parsons, Julie Anne Parsons v. Municipal Property Assessment Corporation, Region 3 and City of Ottawa, 2016 CanLII 4413

Assessment Review Board / Commission de révision de l’évaluation foncière

ISSUE DATE: January 25, 2016

FILE NO.: WR 136638

Assessed Person(s): James David Parsons, Julie Anne Parsons

Appellant(s): James David Parsons, Julie Anne Parsons

Respondent(s): Municipal Property Assessment Corporation, (“MPAC”), Region 3

Respondent(s): City of Ottawa

Property Location(s): 5539 Loggers Way

Municipality(ies): City of Ottawa

Roll Number(s): 0614-422-820-18617-0000

Appeal Number(s): 3051960 and 3070910

Taxation Year(s): 2014 and 2015

Hearing Event No.: 597637

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

Heard: November 9, 2015 in Ottawa, Ontario

APPEARANCES:

Parties	Counsel+/Representative
James Parsons, Julie Parsons	Self-represented
MPAC	David Lynch
City of Ottawa	No one appeared

DECISION OF THE BOARD DELIVERED BY LES NALEZINSKI

INTRODUCTION

1This appeal was originally under the purview of Member Terry Denison. Member Denison adjourned the hearing to allow the assessor the opportunity to do an inspection of the property and continue on with the proceeding at a later date. As evidence was presented, Member Denison was seized and should have presided at this hearing. Under the circumstances the parties were given the choice to either adjourn and reschedule the hearing with Member Denison or proceed afresh. Both parties agreed to proceed.

2The previous assessor at the hearing, Stephane Rozon did not appear at this hearing.

3From the onset, the appellants asked that the assessor, Mr. Lynch, be removed from dealing with the file as they considered him to be unprofessional and that no concessions were given by him in any of the years he has been involved. It was explained that the Board has no authority with regards to removing an assessor from any file per se and that those types of complaints or requests should be taken up with the proper officials at MPAC.

4The subject property is a single family detached residence located at 5539 Loggers way in the City of Ottawa. The property is adjacent to lands owned by Ontario Power Generation (“OPG”), which in turn fronts onto the Ottawa River. Although the lands are owned by OPG, the appellants enjoy unfettered access to the river. They enjoy the use of a personally owned dock on the OPG shoreline.

Background

5The assessment as returned by MPAC is $519,000 for 2014 and $477,000 for 2015. The assessor for MPAC, Mr. Lynch, has made a recommendation to reduce the assessment for the two years to $471,000. The reduction takes into account a market value adjustment of 8%, a reduction for two unfinished decks and a change in the condition of the structure from average to fair. The recommendation also included a value added for removing an “unfinished” allowance. The appellants have rejected this recommendation.

6Mr. Parsons laments the 56% increase in the assessment of his property. He suggests that the information received from Mr. Lynch with a list of 30 properties shows an average sale price of $342,000/$343,000. He also laments that the adjacent property at 5543 Loggers Way is assessed much less than his property. He is of the opinion that an assessment of $341,000 is fair and reasonable.

Description of Property

7The subject property is described by MPAC as a single family detached residence on water. The residence is a one-storey structure, built in 2006 on a lot with an effective frontage of 101 feet (“ft.”) and an effective depth of 149.50 ft. The lot size is 15,099.50 square feet (“sq. ft.”) The structure is considered to be a quality class 6.5 construction in fair condition with a total building area of 1,808 sq. ft. The dwelling has three bedrooms, two full bathrooms and one half bathroom. It is heated by a forced air furnace and includes central air conditioning. There is hydro to the building and plumbing services are a septic bed and private well.

8The appellants disagree with the total building area in MPAC’s Property Profile. Mr. Parsons feels that the property should be shown as having 1,711 sq. ft. per the original building plan/blue prints. It was explained to Mr. Parsons that MPAC’s standard practice is to take outside measurements of structures and these are the measurements used in property profiles. For the sake of argument, the assessor agreed to accept the 1,711 sq. ft. measurement. The Board will use a total building area of 1,711 sq. ft. in its analysis

ISSUE

9What is a correct and equitable assessment for the property for the 2014 and 2015 taxation years?

DECISION

10The Board reduces the assessment of 5539 Loggers Way from $519,000 to $471,000 for 2014 and from $477,000 to $471,000 for 2015.

11Further, the Board finds that the current value is equitable with other assessments of similar properties in the vicinity and an adjustment is not warranted.

The Legislation

12In adjudicating for the 2014 taxation year the Board must consider the following sections of the Assessment Act, R.S.O. 1990, c. A.31, as amended (“Act”).

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 1 of the Act defines “current value” as:

“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.

15Section 19.2 of the Act states:

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.

(5) Exception – 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.

16Section 44.(3) of the Act provides that:

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.

17Section 40.(17) provides that:

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.

18Section 40.(19) provides that:

40.(19) Board to make determination. – After hearing the evidence and the submissions of the parties, the Board shall determine the matter.

19While the legislature has directed in s. 19.(1) and 44.(3)(a) that assessments be based on current value, its final direction in s. 44.(3)(b) is that the assessment be equitable when compared with the assessments of similar lands in the vicinity. Therefore, even if the Board finds sufficient evidence supporting s. 19.(1), that the assessment as returned is reflective of market value, the Board must then ensure that its determination is equitable with the assessments of similar properties in the vicinity. If the Board determines that the current value is high, it must adjust the current value to make it equitable with the assessments of similar land in the vicinity.

Evidence and Analysis

(a) MPAC’s Case

20Mr. Lynch, representing MPAC, submitted as Exhibits 1a, 1b and 1c, his Valuation Report, Equity Analysis Report, exchange of correspondence regarding the change in assessment to $471,000, a statement concerning the status of the OPG land and a listing of the subject property dated February 12, 2010. The listing was for $468,000.

21He has included five properties and six sales in his Market Analysis. Two of the sales are of the same property and occurred in May of 2011 and May of 2012. All of the sales are within a reasonable time of the valuation day of January 1, 2012.

22It is MPAC’s position that properties are considered waterfront if they have direct access to a natural or man-made waterway. Properties separated from the waterway by a right-of-way or private road are still considered waterfront. There is nothing on file that would preclude that fact.

23Mr. Lynch having reference to s. 44.(3) of the Act, has submitted an Equity Analysis using a median Assessment to Time Adjusted Sale Ratio. The sales period within the subject properties vicinity and adjacent vicinity ranges from January 2008 to December 2012 for 30 sales of different types and sizes of properties showing a median Assessment to Sales Ratio (“ASR”) of 1.03. An ASR is a test by which MPAC’s assessment methodology may be tested after an open market sale of a property. The value of the property expressed in the marketplace, is compared to the current value of the property as returned by MPAC. An ASR of 1.00 indicates that the methodology is accurate. An ASR less than 1.00 indicates that the values returned by MPAC may be lower than the current value and an adjustment may be warranted pursuant to s. 44.(3)(b) of the Act.

24The Board has historically relied on assessment comparisons with properties closest to the subject property when possible as it has previously determined that common elements within the “vicinity” may impact market value.

25Although the Board is not entirely convinced that the data on the Equity Analysis Report satisfies the test of equity referenced in the Act as it includes properties that are not similar and not of the same general nature, character or function, in this instance the Board is taking into consideration the Equity Analysis submitted by MPAC in its decision. It is also noted that four of the five comparable properties used in the Valuation Analysis Report are included in the Equity Analysis Report.

(b) Appellants’ Case

26The Appellant, Mr. Parsons submitted Exhibits 2 “a” through “m”. These are correspondence with MPAC, photographs, MPAC notices, Property Profile, letter from OPG and a letter from the Ottawa Septic System Office.

27The Board has reviewed all of the documentation. Mr. Parsons did not submit any of his own comparable data but instead, chose to disseminate and critique the comparables forwarded to him by MPAC. The comparables are the same as the assessor has included in his submission and the Board will be providing its comments later in its decision. As to the issues concerning the negative influences affecting the value of the property, the assessor, supported by correspondence from MPAC, testified that these issues were taken into account and were part of the rationale to change the condition of the house from average to fair.

REASONS FOR THE DECISION

28Mr. Lynch submitted five properties he wished the Board to consider in its analysis. As one of the properties included sales in 2011 and 2012 there are two sales to consider. One of the properties, 230 Morris Island Drive is not considered comparable by the Board and will not be included in its analysis. This property has a larger lot size than the subject with a smaller total building size, a finished basement, a detached garage and is a higher quality construction in average condition. It is also considered to have a better shoreline or water frontage.

29The remaining five sales are considered to be the best evidence and will be used in its analysis. They are:

a. 5535 Loggers Way (2011)

b. 5535 Loggers Way (2012)

c. 312 Mississippi Drive

d. 256 Mississippi Drive

e. 5783 Loggers Way

30The sales information is within a reasonable period of the valuation day, January 1, 2012. Mr. Lynch made adjustments for time to come up with an adjusted sale amount. These adjustments are based on statistical information and are of questionable reliance. The actual sale amount is more in keeping with the amount of money transacted between a willing seller and a willing buyer and the Board will use the actual sale amount versus the adjusted sale amounts in its analysis.

31The Board has analysed the properties on the basis of their square foot value. The Board has taken the actual sale amount of each and divided that price by its total building area to derive a square foot value. Details are as follows:

Address	Date of Sale	Actual Sale Price	Total Building Area	Sq. Ft. Value
5535 Loggers Way	05/2012	$420,000	1,453 sq. ft.	$289.06
5535 Loggers Way	05/2011	$440,000	1,453 sq. ft.	$302.82
312 Mississippi Drive	01/2012	$423,000	1,263 sq. ft.	$334.91
256 Mississippi Drive	08/2012	$423,500	1,205 sq. ft.	$351.45
5783 Loggers Way	11/2010	$556,000	1,784 sq. ft.	$311.66
Average				$317.98

32The average sq. ft. value of the five comparable sales is $317.98. This value is considerably higher than the sq. ft. value of the subject property when using the recommended assessed value ($471,000 /1,711 sq. ft. = $275.28 per sq. ft.).

33Section 44.(3)(b) requires the Board to “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”.

34Mr. Parsons did not provide any evidence as to equity pursuant to the Act.

35Mr. Lynch, in his submission, did determine that 30 properties in the vicinity resulted in a median ASR of 1.03. This indicates that MPAC’s valuation methodology is producing assessed values slightly higher than comparable to sales values established in the market place. As the Act only allows for a downward adjustment in the event that ASRs are in an acceptable range below 1.00, an adjustment for equity is not warranted.

CONCLUSION

36In conclusion, the Board reduces the assessment of 5539 Loggers Way from $519,000 to $471,000 for the 2014 taxation year and from $477,000 to $471,000 for 2015 taxation year as recommended by the assessor.