Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: July 22, 2016

FILE NO.: WR 140793

Assessed Person(s): Nicholas Jolyon Leblovic, Diane Dorothy Leblovic

Appellant(s): Nicholas Leblovic

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

Respondent(s): City of Burlington

Property Location(s): 125 Birett Drive

Municipality(ies): City of Burlington

Roll Number(s): 2402-080-808-01500-0000

Appeal Number(s): 2970218, 3007318, 3085160 and 3153208 (deemed 2016 appeal)

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

Hearing Event No.: 620527

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

Heard: May 9, 2016 in Burlington, Ontario

APPEARANCES:

Parties	Counsel+/Representative
Appellant/Assessed	Nicholas Jolyon Leblovic
MPAC	John Cole
City of Burlington	No one appeared

DECISION OF THE BOARD DELIVERED BY ANTHONY LaREGINA

INTRODUCTION

1Nicholas Jolyon Leblovic is the owner of the property located at 125 Birett Drive in the City of Burlington.

2The property is located at 125 Birett Drive in the City of Burlington specifically in the Shore Acres neighborhood. This community is located on the shores of Lake Ontario and has some of the most unique houses in the area. This neighborhood is bound by New Street to the north and Walkers Line to the west, Appleby Line to the east and Burlington Beach or Lake Ontario to the south. The subject property consists of a single family detached two storey house not located on water which was built in 1968. The building structure is situated on a 13,939 square foot lot and has a total building area of 2,931 square feet of which 1,703 square feet is located on the first floor and 1,228 square feet is located on the second floor. The basement has a total building area of 1,703 square feet of which 1,000 square feet is finished space. The property also has an outdoor pool attached garage and a shed.

3The subject property was assessed at $1,222,000 for 2013 and $1,137,000 for the 2014 and 2015 taxation years and classified as Residential (RT).

ISSUES

4John Cole, representing MPAC, submits that based on the prices realized on the sales of four comparable properties, the assessment of the subject property should be reduced from $1,137,000 to $957,704 rounded to $957,000 as of January 1, 2012.

5Nicholas Leblovic, on the other hand believes that the comparable properties presented by MPAC are not directly comparable to his property. Mr. Leblovic argued that the best sale which he could find in the area was 148 Colonial Court which sold for $870,000 in July 2011 and that the subject property should be valued very much in line with 148 Colonial Court as it is very similar to the subject property.

6Mr. Leblovic argued further that the value of his home should be based on lot value because all the homes that have sold in his area are demolished for the construction of new homes. Mr. Leblovic believes that his property should be assessed at $850,000 which would be 13.48 percent higher than his 2008 assessed value of $749,000 and also in line with the sale of 148 Colonial Court

7The main issues for the Assessment Review Board (the “Board”) are to determine which of the comparable properties proposed by the parties provide a valid indicator of the subject property’s current value as of January 1, 2012, and whether a reduction to the assessment of the subject property is required in order to make it equitable with the assessment of similar lands.

DECISION

8The Board finds that the current value of the subject property as of January 1, 2012 is $957,000.

9Further, the Board finds that no adjustment to the subject property’s current value is required to make it equitable with the assessment of similar lands in the vicinity.

10The Board therefore, reduces the assessment from $1,222,000 to $957,000 for the 2013 taxation year and from $1,137,000 to $957,000 for the 2014 and 2015 taxation years and also deems the same value for the 2016 taxation year.

REASONS FOR DECISION

Determination of Current Value

11The initial task for the Board is to determine the current value of the subject property as required by s. 44.(3)(a) of the Assessment Act, R.S.O. 1990, c. A.31, as amended (“Act”), which in part states that “…the Board shall…determine the current value of the land.”

12Section 19.(1) of the Act states that “…the assessment of land shall be based on its current value…” and s. 1 of the Act defines current value as “…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 40. (17) of the Act stipulates that “…the burden of proof as to the correctness of the current value of the land rests with the assessment corporation.”

14The issue for the Board’s determination is the current value of the subject property as of January 1, 2012.

MPAC’s Evidence

15Mr. Cole has provided the Board with the sales of four properties as the basis for establishing the current value of the subject property. The details on these properties are found on Appendix “A” of Exhibit 1. All four properties are located between Lake Ontario and Lakeshore Road and all are in close proximity to the subject property. Three of the comparables are superior and one is inferior to the subject property all are of the same quality rating at 7.5.

16The comparable properties proposed by MPAC sold on the open market between February 2011 and March 2012 for $1,050,000 and $1,285,000 time adjusted to January 2012 at $1,108,070 and $1,348,962.

17By applying the average time adjusted sale price per square foot of the four comparable sales of $326.75 to the subject property building area of 2,931 square feet, Mr. Cole’s submits that the subject property’s resulting value should be $957,704 and therefore requests that the current value of the subject property be set at $957,000.

18Mr. Cole requests that the assessment of the subject property should be further reduced to $957,000 with no additional adjustment required to make it equitable with the assessments of similar properties in the vicinity.

19During cross-examination, Mr. Cole agreed with Mr. Leblovic that the older homes in the area were being purchased either for major renovations or to build completely new homes. Mr. Cole disagreed with Mr. Leblovic that the value of the older homes are based on lot value alone rather a combination of lot value and the value of the existing structure regardless of age.

20Mr. Cole also agreed with Mr. Leblovic that the comparable properties which he selected were not identical to the subject property. Mr. Cole stated that there was some variation in building area to the subject property but all had similar lot sizes, quality levels and were located in the same vicinity even though they were not in the same locational neighborhood. Mr. Cole submitted that while the comparable sales were either superior or inferior to the subject property the average adjusted sale value per square foot of the four comparable sales at $326.75 is a good indicator of the correct value for the subject property.

Appellant’s Evidence

21Mr. Leblovic presented the following information in Exhibit 2:

1. ARB decision regarding the 2008 Current Value Assessment (“CVA”)
2. documentation supporting change in geographic area
3. Barbara Beers’s opinion regarding average sale prices
4. 2012 property profile and photo of subject property
5. 2008 and 2012 property profiles for Leblovic comparable properties
6. 2008 and 2012 property profiles for MPAC comparable properties
7. chart containing data relating to items 4, 5 and 6
8. summary of cost to cure

22Mr. Leblovic presented the Minutes of Settlement for the 2008 current value assessment showing a reduction from $910,000 to $749,000.

23Mr. Leblovic also presented in Tab 2 of Exhibit 2 that the comparables presented by MPAC were outside of the subject property’s homogeneous neighborhood C82 and therefore skewing the 2012 valuation to a higher level.

24Mr. Leblovic presented an opinion letter from Barbara Beers, a real estate broker, indicating that the average sale price increase between January 1, 2008 and December 31, 2012 in Area 2 is 6.18% higher than Area1, which is the area the subject property is located. Mr. Leblovic pointed out that the only comparable property which MPAC presented in the C82 homogenous area is 4480 Lakeshore Road while the other three properties namely 2408 Lakeshore Road, 145 Breckondale Court and 165 Nicholson Court are in C50 and C68 which is part of Area 2. Ms. Beers did not appear at the hearing.

25In Tab 7 of Exhibit 2, Mr. Leblovic pointed out that the average increase in current value assessment between 2008 and 2012 of the comparables he presented was 13.4 per cent as opposed to the comparables presented by MPAC which showed an increase of 38.7 per cent. Mr. Leblovic also pointed out on page 2 of Tab 7 that the effective site area and the building area of three of the four comparable properties submitted by MPAC were substantially larger than the subject property and therefore not directly comparable.

26Mr. Leblovic also presented a Summary of Cost to Cure in Tab 8, Exhibit 2 showing a total cost of $286,000. Mr. Leblovic believes that this work will be required on the property to bring the property to a January 1, 2012 standard. Mr. Leblovic admitted in cross-examination that a number of these items have been completed before January 2012 and furthermore a number would be part of normal maintenance required of any property.

27Mr. Leblovic admitted that the only sale he could find that was similar to his property was the sale of 148 Colonial Court which occurred in July 2011 for $870,000. Mr. Leblovic believes that this sale is very indicative of the current value of the subject property as they are very similar in terms of building area and lot size and both are located within 0.6 kilometers of each other in the same area.

MPAC’s Summation

28Mr. Cole submits that he has presented four comparable sales that are identical in quality to the subject property at a 7.5 rating. Mr. Cole submits further that they are similar properties in terms of lot size and location to the subject property. Mr. Cole believes that while there may be some differences in lot size and building area between each comparable, the average adjusted sale value per square foot of building area of $326.75 is a very good indicator of the value of the subject property. Mr. Cole requests that based on applying $326.75 per square foot to the total building area of the subject property of 2,931 square feet the current value of the subject property as of January 1, 2012 should be $957,000. Mr. Cole requests that the CVA of the subject property should be reduced from $1,122,000 for 2013 and $1,137,000 for 2014 and 2015 tax years to $957,000 with no adjustment for the assessment of similar properties in the vicinity. Mr. Cole also requests that the 2016 appeal be deemed at the same value.

Appellant’s Summation

29Mr. Leblovic submits that MPAC increased his assessment by 51% from 2008 to 2012 while the comparables he presented only had a 13.4% increase. Mr. Leblovic submitted that the CVA of $1,137,000 is too high for his property and that the correct CVA for the subject should be $850,000 based on a 13.4% increase in assessment from 2008 to 2012. This value is also supported by deducting the cost to cure of $286,000 from the $1,137,000 CVA which also comes to $851,000 as well as the sale of 148 Colonial at $870,000. Mr. Leblovic requests that the Board reduce the CVA to $850,000 for the 2013 to 2016 taxation years.

Board’s Findings

30The thrust of the Act is to rely on current value as the basis for assessed value. 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.”

31The best evidence of current value is the sale of the subject property on or close to the valuation day of January 1, 2012. If, as in this case, no such sale occurred, the sales of similar properties in the vicinity will be considered to establish current value of the subject property.

32Both MPAC and the Appellant have presented evidence to support the subject property’s current value using the Direct Sales Comparison approach. This valuation methodology identifies similar properties sold on the open market to support a current value of the subject property.

33MPAC presented the sale of four comparable properties of which two were in a different homogenous area to the subject property but all were in the general vicinity within a few kilometers of the subject property. They were all single family homes of the same quality type with similar size lots. While Mr. Leblovic argued that there were substantial differences in the properties and they were located in different homogeneous areas the board is in agreement with MPAC, that based on the average of the four sale value per square foot of $326.75, it appears that the current value of the subject property at $957,000 is within reason and substantially lower than the initial value of $1,222,000 and $1,137,000.

34Mr. Leblovic presented the sale of 148 Colonial Court at an unadjusted value of $870,000 and concluded that the value of the subject property should be very much in line with this sale.

35In fact if the sale of 148 Colonial Court which occurred in July 2011 is time adjusted to January 1, 2012, it would result in an adjusted sale value of $894,360. A further adjustment of $32,000 to compensate for the fact that this property does not have a pool as compared to the subject property increases the total adjusted sale value of 148 Colonial to $926,360. Further considering that 148 Colonial is a corner lot with a medium traffic variable and a 7.0 quality rating of construction as compared to the subject property which is a 7.5 quality rating, has no corner lot and no traffic variables, it is clear that the subject property is superior to 148 Colonial Court. The Board therefore concludes that the sale of 148 Colonial Court entered by the appellant at 870,000 further supports a current value of $957,000 for the subject property as being quite reasonable.

36Based on the best available evidence, the Board will therefore set the current value at $957,000 based on a January 1, 2012 valuation day.

37Mr. Leblovic also entered into evidence a list of items under summary of cost to cure with a total value of $286,000. Subtracting this value from the 2014 and 2015 assessment value of $1,137,000, Mr. Leblovic claimed the value of the property should be $851,000. The Board will not accept this evidence as conclusive in nature. The items on the list for the most part are regular maintenance items that are the responsibility of any home owner and are not normally taken into consideration when determining current value. Furthermore, these items are estimates listed by Mr. Leblovic with no supporting documentation. Finally, many of these items were already completed before January 1, 2012. Therefore, the Board concludes that no further adjustment to current value can be made for the cost to cure component as presented by Mr. Leblovic in Tab 8 of his report.

38Mr. Leblovic also concluded in his summation that the value of the homes in his area should be based on lot value alone because most of the properties sold are being replaced with new homes. This conclusion is also rejected by the Board as the evidence submitted by the parties in support of current value consisted of comparable properties which included both house and lot. The subject property is also a property which consists of both and therefore it is reasonable to set the current value of the subject property based on the comparable sales provided by the parties.

Determination of Equity

39Once current value has been established, the Board must determine whether a reduction should be made to lower the assessment below current value in order to make it equitable with the assessments of similar lands in the vicinity.

40Section 44.(3)(b) of the Act states that:

…the Board shall…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.

41MPAC provided the sale of 30 properties within 0.66 kilometers of the subject property which sold between January 2011 and December 2012. Based on the adjusted sale value of each property the median Assessment to Sale Ratio or ASR of the 30 properties is 1.02.

42Mr. Leblovic picked out the larger properties in the sample of 30 properties and concluded that the larger properties were for the most part over assessed. Mr. Cole agreed but further added that overall the sample of 30 properties produced a median ASR of 1.02 which included all the sales within 0.66 kilometers and therefore much more indicative of the assessed values in the area as they relate to the market.

43Based on the equity study presented by MPAC indicating a 1.02 ASR, the Board will make no further adjustment to the current value as determined above in support of equity.

44The Board will therefore reduce the CVA for the subject property for the 2013, 2014 and 2015 taxation years from $1,222,000 and $1,137,000 to $957,000 and deem the same value for the 2016 taxation year.

2016 DEEMED APPEAL

45An 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.

46Section 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.