Johnson v. Municipal Property Assessment Corporation, 2016 CanLII 45381

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: July 12, 2016

FILE NO.: WR 138689

Assessed Person(s): Gillian Patricia Johnson and Brian Michael Johnson

Appellant(s): Gillian Johnson and Brian Johnson

Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 19

Respondent(s): City of Hamilton

Property Location(s): 53 Redfern Avenue Unit 12

Municipality(ies): City of Hamilton

Roll Number(s): 2518-081-081-04232-0000

Appeal Number(s): 3102628 and 3156309 (deemed 2016 appeal)

Taxation Year(s): 2015 and 2016 (deemed appeal)

Hearing Event No.: 611530

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

Heard: January 11, 2016, in Dundas, Ontario

APPEARANCES:

Parties	Counsel/Representative
Gillian Johnson and Brian Johnson	Self-represented
MPAC	Tim Oberle
City of Hamilton	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 Persons and Appellants, Gillian Johnson and Brian Johnson in respect to the returned assessment of $407,000 for the subject property in the City of Hamilton for the 2015 taxation year.

BACKGROUND

2The subject property is a residential condominium, a town house, built in 2013. It has a total building area of 2,092 square feet (“sq. ft.”). The basement area is 1,372 sq. ft. The property benefits from a 3% adjustment for being an end unit.

3For the 2015 taxation year, the assessment was returned at $407,000. The current value assessment was determined by Direct Sales Comparison Approach.

ISSUE

4Tim Oberle, the assessor from MPAC, is of the view that the assessment of the subject property at $407,000 for the 2015 taxation year should be confirmed. He testified that this value was derived from the six selected sales comparables, close to the valuation date of January 1, 2012. He further testified that the market value of the subject property falls within a range of $363,000 - $481,000; therefore the current value of the subject property is supportable and reasonable.

5Gillian Johnson, one of the Appellants, took the position that the assessment is too high and urged the Board to consider a value of $374,000 less the percentage attributed to properties in Ancaster, as the estimated fair value of the subject property as of January 1, 2012.

6In 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

7The Board finds the current value of the subject property for the 2015 taxation year to be $394,000 (rounded). The 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.

8The Board orders that the assessment be reduced from $407,000 to $394,000 (rounded) for the 2015 taxation year.

REASONS FOR DECISION

Legislation

9Section 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 2015 taxation year, 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.

10Section 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.”

Current Value - Evidence and Analysis

11MPAC provided sales comparables as close to the valuation date of January 1, 2012 of similar properties in order to reflect the market conditions as of January 1, 2012. According to Mr. Oberle, these six sales are a similar style condominium complex known as “Garth Trails”, located approximately 6.8 kilometers from the subject property.

12The only sales evidence submitted to the Board in support of current value are the sales comparables provided by MPAC.

13The Appellants submit that although the sales comparables presented by MPAC are built by the same builder as the subject property, the properties are older, built in a well established area, and have a good landscape. Within the complex, there is a multimillion dollar club house, which is opened to all property owners to enjoy the amenities and consequently improving the value of these properties. Therefore they are not comparable to the subject property. Mr. Oberle made no objection to this fact.

14Conversely, the Appellants urged the Board to determine the current value of the subject property based on the assessment of similar properties located 6.9 kilometers from the subject property known as the “Bungalows of Ancaster”, built approximately 18 months before the subject property, built by the same builder, has the same model as the subject property, and in fact, is identical to the subject property. They presented the Board with five assessments of these properties. Under cross examination, the Appellant testified that there are no sales in or around the valuation date of January 1, 2012, consequently the Appellants did not provide any sales. The Board cannot establish current value on assessment only. It is difficult to establish current value on assessment only since this is not the true indication of the market.

15Ms. Johnson also advised the Board that their neighbours across the street at Unit 21, 53 Redfern Avenue, who gave them permission to mention their name and the nature of their appeal, also filed an appeal with the Board. In their appeal, they used the same comparables which they are currently using and they were successful in their appeal before the Board. No written decision of this appeal was provided by either party at the hearing and after the hearing. At the commencement of the hearing, the Board emphasized to the Appellants in its opening statement of the importance of providing evidence to prove that the current value assessment set by MPAC is incorrect.

16In reviewing the evidence submitted by MPAC in support of current value, the Board rejects the comparables by MPAC on the basis that it was clear from the evidence presented by the Appellants that the sale comparables from MPAC were part of a superior development with the existence of a multimillion dollar club house and its corresponding amenities within the Gath Trails vicinity. Whereas, the subject does not benefit from this, making it inferior to the Gath Trails. Sales D and F are not end units and are smaller than the subject property. MPAC has not provided any adjustment values for these sales. The sales value for Sales A, B, C, and E range from $390,000 - $481,000. The value of the subject property should be lower than this range, due to the existence of the multimillion dollar clubhouse within the vicinity of Gath Trails, to which the property owners have access to its corresponding amenities which potentially increases the value of these properties. The Board cannot measure or quantify the impact of this facility within this vicinity; however, it is reasonable that the subject property is inferior to these sales comparables.

17Mr. Oberle states in his valuation report in Exhibit 1 that:

the six selected sales are all considered to be to the subject with sale dates falling very close to the valuation date of January 1, 2012. When I account for the necessary adjustments, I would estimate the market value of the subject property to be within a range of value, from a low of $363,000 to a high end of $481,000.

He does not provide what these adjustments are but admits that there are adjustments. Some of the sales comparables are slightly larger or smaller than the subject property. There are no time adjustment sale prices for Sales C and D, which occurred in 2011 and 2013 respectively.

18The best evidence before the Board to determine the current value assessment for the subject property is the sale of the subject property on July 2014. Although the Board prefers sale of a subject property closer to the valuation date, in this case, the best evidence and only available evidence in support of current value assessment is the sale of the subject in July 2014. The Board has to defer to set the current value at the sale price. The subject property sold in July 2014 for $394,251.00

19Therefore, the Board sets the current value assessment of the subject at $394,000 (rounded).

20Ms. Johnson further urged the Board to set a current value and make a downward adjustment for location, since the comparables provided by the Appellants are all located at Ancaster which is more desirable than the location of the subject property in Hamilton. The Appellants did not provide the Board with evidence of any percentage deduction. The panel of this Board had again in its opening statement advised the Appellant that if they had a unique situation regarding their property, which they believe will impact their assessment they should inform the Board, however, evidence would be required to quantify or measure the impact of this situation against the assessed value. The Board can only make corrections to current value based on evidence showing the correction that is required. The Board cannot arbitrarily assign a negative or positive adjustment to value without quantitative evidence.

21The Board therefore finds that the current value of the subject property is $394,000 (rounded).

Equity Analysis

22Section 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.

23MPAC provided no evidence to establish equity.

24The Appellants provided the Board with the assessments of five properties. There were no sales provided by the appellants. No other evidence was presented to the Board that would indicate that an adjustment is to be made to the current value to make the assessment equitable with similar property in the vicinity. Therefore no further adjustment to equity is justified in these circumstances

CONCLUSION

25The Board finds that the assessment should be reduced from $407,000 to $394,000 (rounded) for the 2015 taxation year.

2016 DEEMED APPEAL

26An 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.

27Section 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.