Tari v. Municipal Property Assessment Corporation, 2016 CanLII 45378

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: July 15, 2016

FILE NO.: WR 140803

Assessed Person(s): Christina Tari

Appellant(s): Christina Tari

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

Respondent(s): Township of Ramara

Property Location(s): 7420 Island View Street

Municipality(ies): Township of Ramara

Roll Number(s): 4348-020-006-40400-0000

Appeal Number(s): 2996991, 3022631, 3087604 and 3155409 (deemed 2016 appeal)

Taxation Year(s): 2013, 2014, 2015 and 2016 (deemed appeal)

Hearing Event No.: 625581

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

Heard: May 31, 2016 in Brechin, Ontario

APPEARANCES:

Parties	Representative
Christina Tari	Christina Tari
MPAC	David Zhao
Township of Ramara	No one appeared

MEMORANDUM OF ORAL DECISION DELIVERED BY VINCENT STABILE ON MAY 31, 2016

INTRODUCTION

1The subject property is a seasonal/recreational dwelling – first tier on water. Municipal Property Assessment Corporation (“MPAC”) suggests that the lot has an effective frontage of 50 feet (“ft.”) and an effective depth of 227.88 ft. Christina Tari, (the “appellant), argues that the depth should be 170 ft. The cottage was built in 1959 with an original building area of 578 square feet (“sq. ft.”). In 1996 there was an addition of 460 sq. ft. bringing the total building area to 1,038 sq. ft. and an effective year built to 1984. It is a single-storey without a basement. It has one full bathroom.

2For the 2013, 2014 and 2015 taxation years it is assessed at $338,000. The assessor stated that a 10% reduction had been applied for the 2008 cycle and carried forward. There was no clear evidence for the reason of the 10% reduction.

3The appellant rejects the assessment arguing that the comparable properties relied upon by MPAC are not comparable as the subject property is in much worse condition. Further, one of the comparable properties relied upon, 7424 Island View Street, is owned by the appellant, purchased by her in June 2012, is also under appeal at this hearing. Further, that the other comparable properties are in much better condition and have greater water frontage.

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 $284,500.

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

(iii) The assessment for the 2013, 2014 and 2015 taxation years is reduced from $338,000 to $284,500.

MPAC’s Position

6Tammy Woods (“assessor”) testified for MPAC. Her Valuation Report was filed and marked Exhibit 1. She stated that she used the Direct Sales Comparison Approach to value.

7The assessor proposed sales of three comparable properties in her Market Analysis (Appendix “A” of Exhibit 1). They are all on the same street (7424, 7430 and 7452). All of the sales had been time adjusted based on 310 sales of residential properties from the same and adjacent neighbourhood(s) as the subject property from June 2010 to December 2012. The study formed part of Exhibit 1. The study showed an overall increase in the market of approximately 6.11 %.

8The evidence is that two of the comparables, 7424 and 7430 have comparable waterfront lots. She made some distinction in respect to the size and condition of the structures, noting that 7424 was built in 1958 with only a building area of 620 sq. ft. and no renovations. It was purchased by the appellant in June 2012 for $297,000. 7452 has a water frontage of 76.68 ft. and only 111.71 ft. in depth. It has a frame structure of 516 sq. ft. built in 1973 with no renovations. It sold in July 2012 for $245,000. The third comparable property, 7430, has a similar lot size as the subject property. It was built in 1971 with a structure of 649 sq. ft. The structure was raised at some point (date unknown). It now has a full basement (unfinished) and a walkout. In addition it has a 350 sq. ft. deck. This property sold in June 2010 for $390,000 time adjusted to January 1, 2012 at $399,300.

9The assessor states that the assessed value of the subject property falls within the range of the sale prices of the proposed comparable properties. She submits that the assessment of $338,000 as returned is correct.

10On cross-examination the assessor was challenged on her personal knowledge of the depth of the lots, both of the subject property as well as the proposed comparable properties. The assessor was presented with a copy of a survey which supported the appellant’s position that the effective depth of the lots of each of the properties were actually similar at 170 ft.

11Moreover, the assessor was challenged as to her personal knowledge of the condition of the comparable properties. It became clear that the appellant had direct firsthand knowledge of the proposed comparable properties and improvements that each had received over time, pointing out that the subject property would require substantial expense to upgrade various aspects to be reasonably comparable.

12The assessor also acknowledged that water frontage was a significant factor when determining value, especially when assessing seasonal properties.

Appellant’s Position

13The appellant agreed with the Direct Sales Comparison Approach to value. Her documentary evidence consists of a binder marked as Exhibit 2 (document brief), which contains a site map, various photographs of the subject property, the proposed comparable properties relied upon by MPAC as well as photographs of 7430 Island View Street which sold in June 2010 for $390,000.

14She testified that she was very familiar with the condition of the comparables relied upon by the assessor and submits that the subject property would require substantial improvements and upgrades to be remotely comparable to those properties. She argues that the effective lot frontage, on the water side, is a significant factor in establishing value. She submits that 7452 is not a reasonable comparable since the lot on that property, on the water side, is greater than 50% larger than the subject property.

15The photographs of 7430, in Exhibit 2, are quite instructive as to the general condition both of the interior and exterior of the property. The photographs support the appellant’s position that the subject property would require significant improvements to make it remotely comparable to 7430.

16In respect to 7424, this was the other property under appeal at the same hearing. The appellant testified that she purchased that property in June 2012 for $297,000 out of concern that if not sold, the owner, an older woman, intended to rent the property. To avoid that prospect, the appellant purchased the property realizing that she was purchasing at above market value. In that appeal, I confirmed the assessment, having considered the test applied by the Board as well as the legal principles set out in Viva v. Ontario Property Assessment Corporation, Region No. 10 [2001] O.J. No. 273, a decision of the Divisional Court that stands for the proposition that the correct current value is the actual purchase price paid by the assessed person.

17The appellant testified that she had obtained quotes from independent contractors as to expenses required to upgrade the subject property to attempt to make it comparable to the properties relied upon by MPAC. Set out below are the anticipated expenses:

Deck $15,000 to $30,000 Dock $ 5,000 to $ 8,000 Roof $ 5,000 to $10,000 Insulation $ 8,000 Siding $ 5,500 Gravel/Landfill $15,000 Total $53,500 to $76,500

The appellant was challenged on cross-examination. Her evidence was not displaced.

The Legislation

18The 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.

19Section 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.

20Section 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.

21Section 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.

22Section 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

23The 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.

24The 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 linear foot on water for those residential/recreational properties fronting on water. The subject property is one of those properties. Although no specific evidence was heard as to the actual value on a linear foot basis, the Board accepts that it is a significant factor considered by purchasers when purchasing a seasonal property on water.

Current Value

25The appellant agreed with the approach but challenged the proposed comparable sales. She did not challenge the time adjustment study.

26Although no other comparable sales evidence was presented by the appellant, I am satisfied that considerable improvements would be required to elevate the condition of the subject property to make it comparable to the properties relied upon by MPAC. The best evidence received in that respect was from the appellant. I am satisfied that the anticipated expenses are reasonable.

27Accordingly, the assessment of $338,000 will be reduced by $53,500 resulting in a current value of $284,500.

Equity

28Having 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.

29The 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.

30I did not receive any evidence on the issue of equity from either side. I made inquiries as to the ASRs of the proposed comparable sales, however they were of little assistance, given the small sample three. Under the circumstances, there will be no further adjustment for equity.

CONCLUSION

31The assessment for the 2013, 2014 and 2015 taxation years is reduced from $338,000 to $284,500.

2016 DEEMED APPEAL

32An 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.

33Section 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.