Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: July 12, 2016

FILE NO.: WR 140845

Assessed Person(s): Khursigara Sherazade

Appellant(s): Khursigara Sherazade

Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 15

Respondent(s): City of Mississauga

Property Location(s): 370 Queen Street South

Municipality(ies): City of Mississauga

Roll Number(s): 2105-120-004-22600-0000

Appeal Number(s): 3051528, 3085730 and 3152686

Taxation Year(s): 2014, 2015 and 2016

Hearing Event No.: 620445

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

Heard: November 09, 2015 and May 11, 2016 in Mississauga, Ontario

APPEARANCES:

Parties	Counsel+/Representative
Khursigara Sherazade	Self-represented
MPAC	L. Dewinter, K. Cole and T. Janeczek-Boyle
City of Mississauga	No one appeared

DECISION OF THE BOARD DELIVERED BY SUBUOLA AWOLERI

INTRODUCTION

1The appeal before the Assessment Review Board (“Board”) is filed by the Assessed Person and Appellant, Khursigara Sherazade, in respect to the returned assessment of $962,000 for the subject property in Mississauga for the 2014, 2015 and 2016 taxation years.

BACKGROUND

2The subject property is a residential property built in 1934, with an effective year built of 1985 with three self-contained units. Two of these units are used for residential purposes and the third is used as a commercial office. It is a corner lot with 4,975 square feet (“sq. ft.”) of building of which a 2,824 sq. ft. addition was made to the structure in 2000. It has a lot with 223 feet (“ft.”) of frontage, 160 ft. of depth, and a total building area of 4,975 sq. ft. The basement area is 811 sq. ft. and it is unfinished. The property benefits from a 5% negative adjustment for abutting a railway track and 2% negative adjustment for medium traffic.

3For the 2014, 2015 and 2016 taxation years, the assessment was returned at $962,000, of which $480,800 (49.97%) was apportioned to the residential tax class and $481,200 (50.03%) was apportioned to the commercial tax class. This current value assessment was determined by the Direct Sales Comparison Approach.

November 9, 2015 Hearing

4This appeal was scheduled for hearing on November 9, 2015. During the hearing, the Appellant advised the Board that MPAC’s measurement of the subject property was not accurate. The parties consented to an agreed measurement of 4,800 sq. ft., however; the hearing had to be adjourned in order for MPAC to provide a revised assessment based on the new agreed measurement of the subject property. The Board ordered the evidence closed and the Appellant was to provide further details about one of MPAC’s sales comparables.

ISSUE

5Laurie Dewinter, the assessor from MPAC, provided a revised current value assessment for the subject property at $941,000 based on the agreed square footage of 4,800 sq. ft. for the 2014, 2015 and 2016 taxation years and states that this should be confirmed. She testified that this value is as a result of the sales of three properties in close proximity to the subject property, which are inferior to the subject property due to their smaller square footage and these comparables are used for both residential and commercial purposes like the subject property. She submits that the assessment of the subject property at $962,000 revised to $941,000 is reasonable.

6The Appellant took the position that the revised assessment for the subject property is too high and urged the Board to consider a current value assessment between $725,000 to $750,000 for the subject property as of January 1, 2012, based on her own sale comparables, which she asserts as sales of recently sold properties that establish true market value.

7In addition to determining what the current value of the subject property is, the Board must determine if the assessment of the subject property is equitable with that of similar properties in the vicinity.

DECISION

8The Board finds the current value of the subject property for the 2014, 2015 and 2016 taxation years to be $941,000.

9The 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.

10The Board orders that the assessment be reduced from $962,000 to $941,000 for the 2014, 2015 and 2016 taxation years, apportioned as:

Residential (Full) $470,218

Commercial (Full) $470,782

REASONS FOR DECISION

Legislation

11Section 44.(3)(a) of the Assessment Act (“Act”) requires the Board to “determine the current value of the land.” Current value is defined in s. 1 as “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.” That is, for the 2014, 2015 and 2016 taxation years, the Board must determine what the subject property would have sold for in an arm’s length transaction on the January 1, 2012 valuation day set by the Act.

12Section 44.(3)(b) of the Act requires that the Board “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 land.”

Current Value - Evidence and Analysis

MPAC’s Position

13Ms. Dewinter presented three comparable sales used for both residential and commercial purposes. She asserts that these three sales are all considered inferior to the subject property, but are in close proximity to the subject property and that the time adjusted sale price per square foot for the three comparables is $278. One of the three selected sales which she considers the most comparable to the subject property sold at an adjusted sale price of $726,532. According to Ms. Dewinter, this property is older and smaller than the subject property and she submits that with an adjustment in square footage of this property, the current value assessment of the subject property at $962,000 is reasonable.

Appellant’s Position

14The Appellant submits that the following variables on her property reduces its value: the railway tracks close to her property, traffic, an easement on her property in favour of the municipality and another by Enersource Mississauga is about to be placed on her property, a gas station across the subject property and a bus stop in front of the subject property. She further submits that the sale comparables presented by MPAC are not affected by these variables; they are of better quality, in a more superior location and more valuable than subject property.

Board's Analysis - Current Value

15The Board believes that the best evidence of current value is the sale of the subject property on or near the valuation date of January 1, 2012. When no such sale occurs, the Board looks to the recent sale of other similar properties in the vicinity to determine current value.

16The Appellant submits that there are variables on her property which reduces its value. MPAC testified that the fact that the subject property abuts a railway track and prone to medium traffic has already been taken into consideration in its assessment. The Board agrees with MPAC as a corresponding (5%) and (2%) negative adjustment for abutting a railway track and medium traffic were made by MPAC. The Appellant purchased the subject property in 1999, with the first easement on the property. MPAC further testified that an adjustment for easement would only be made if the piece of the property was sold to the City and Enersource Mississauga. If this was the case, Ms. Janeczek-Boyle testified that MPAC would have recalculated the lot size and made the corresponding adjustment to the current value assessment of the subject property and that currently, the subject property is solely in the name of the Appellant. The Board agrees with MPAC, if the Appellant has to sell the subject property it would be sold with the easement on it and in fact she purchased it with an easement on it. Neither party provided the Board with evidence to show how the presence of these easements will affect the value of the property. Regarding the other variables on the subject property, such as the presence of a bus stop in front of the subject property and a gas station across the subject property, the Appellant did not provide the Board with any evidence to quantify the impact of these variables on the value of the subject property. The Board cannot arbitrarily assign a negative or positive adjustment to value without quantitative evidence.

17The sales comparables presented by the parties are considered inferior to the subject property. Table 1 below shows what the Board considered in determining the current value of the subject property:

Table 1

	Sale Price	Sale Date	TAS Price	Eff. Site Area	Quality	Building Size Sq. Ft.	Year Built/Eff. Year Built	Inferior, Relatively Comparable or Superior to the Subject Property
Subject Property				15,159.00	7.0	4,800	1934/1985
(A) 365 Queen Street South	885,000	Dec/2011	888,287	29,620.80	6.0	2,906	1868	Inferior
(B) 350 Queen Street South	650,000	June/2010	726,532	12,632.40	6.5	3,800	1867/?	Inferior
(C) 215 Broadway Street	750,000	Dec/2012	712,432	9,977.23	6.0	2,485	1946	Inferior
(D) 322 Queen Street South	950,000	July/2013	N/A	N/A	N/A	3,093	1959	Inferior
(E) 312 Queen Street South	855,000	April/2013	N/A	N/A	N/A	2,486	1892/1944	Inferior
(F) 362 Queen Street South	745,000	April/2012	727,865	N/A	N/A	2,012	1920/1927	Inferior
(G) 82 Queen Street South	800,000	Oct/2015	N/A	N/A	N/A	1,926	1923	not accepted

18The Appellant presented evidence in Exhibit 7 which shows that MPAC’s Sale B - 350 Queen South was renovated and the building square footage for this property is 3,800 sq. ft. contrary to MPAC’s evidence of 2,997 sq. ft. The time adjusted square foot sale of Sale B is $191. This cannot be applied to the subject property due to the difference in size. Under cross-examination, MPAC admitted that there was no record in their system of a renovation for this sale. This property may be relatively comparable to the subject property but it is still inferior to the subject property in terms of size, age and quality. If the rate per square foot of $191 of Sale B is applied to the subject property’s building area of 4,800 sq. ft. the value is $916,800 which is within 2.5% of MPAC’s revised value of $941,000. The difference can easily be accounted for in terms of quality, the lot area of the subject property is 2,527 sq. ft. larger and the subject property’s building size is 1,000 sq. ft. larger than this sale.

19For Sales D and E, there is no time adjusted sale price provided by the Appellant and these sales are inferior to the subject property in terms of size and year built.

20The Board rejected Sale G, which was also presented by the Appellant since this sale is far removed from the valuation date of January 1, 2012.

21The Board used Sales A, B, C, and F, in order to determine the current value sales range for the subject property. All these comparables are still inferior to the subject property in terms of size, year built and quality. Figure 1 shows the current value sales range as determined by the Board.

Figure 1

Sale A, B, C & F Inferior Comparables → $712,432 $888,287 ←

Subject Property’s Current Value Range → $712,432 $888,287 →

22The subject property’s current value range is located after the high end of the time adjusted sale price of the inferior comparables ($888,287). Given that the subject property is superior to the four Comparables (A, B, C and F), in terms of size, quality and year built, the Board is of the view that MPAC’s revised assessment ($941,000) is fair and reasonable. The Board reduces the subject property’s returned assessment from $962,000 to $941,000 for the 2014, 2015 and 2016 taxation years.

Equity Analysis

23Section 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 Sale Ratio (“ASR”) is a tool often used to determine if a reduction in the assessment below current value is required to make an assessment equitable with the assessments of similar lands in the vicinity. The ASR is determined by dividing the assessment as returned by the time-adjusted sale price.

24Ms. Dewinter presented an equity analysis of 30 residential sales within 0.54 kilometers of the subject property with a median ASR of 0.96. She 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 0.90 – 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. Dewinter further 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.

25The Appellant has not provided the Board with any evidence in this regard. The only equity evidence before the Board is from MPAC. The ASR evidence 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.

CONCLUSION

26Based on all of the evidence, the Board determines the current value to be $941,000 and finds this value to be fair and equitable. Consequently, the Board reduces the subject property’s returned assessment from $962,000 to $941,000 apportioned $470,218 to the Residential (full) tax class and $470,782 to the Commercial (full) tax class for the 2014, 2015 and 2016 taxation years.