Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: August 09, 2016

FILE NO.: WR 141542

Assessed Person(s): Carlos Bernal and Ourania Georgoulas

Appellant(s): Georgoulas Ourania and Carlos Bernal

Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 03

Respondent(s): City of Ottawa

Property Location: 1324 Morrison Drive

Municipality(ies): City of Ottawa

Roll Number(s): 0614-095-504-01801-0000

Appeal Number(s): 2865460 and 3104427

Taxation Year(s): 2011 and 2012

Hearing Event No. 625274

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

Heard: By Written Submissions - July 14, 2016

APPEARANCES:

Parties	Representative
Ourania Georgoulas and Carlos Bernal	No one appeared
MPAC	No one appeared
City of Ottawa	No one appeared

DECISION OF THE BOARD DELIVERED BY DONALD WHITEHURST

1This appeal has a long and acrimonious history. It originated in early 2011 when the Municipal Property Assessment Corporation’s (“MPAC”) representative met with the Appellants to discuss the subject property's ("SP") assessment¹. On that occasion MPAC's representative informed the Appellants that MPAC's records erroneously recorded a frontage of 40 feet for the SP; the correct frontage being 20.4 feet. MPAC offered to reduce the SP's 2011 taxation year returned assessment from $264,000 to $242,000. The Appellants rejected the offer and subsequently filed an appeal with the Assessment Review Board (the “Board"). The Appellants claim that MPAC acted in bad faith² and failed to inform them as to when and how the frontage error occurred³. The bad faith allegation stems from the fact that MPAC recommended two different assessment values ($218,000⁴ and $242,000⁵) and "MPAC's systematic uncooperative attitude in refusing to provide us with the information requested...⁶".

2On October 17, 2011⁷, the Appellants brought a Motion for Discovery before Member Jacques Laflamme. The Member rendered a decision (DM 113215) on January 6, 2012⁸ and the Appellants requested that the Board review the decision. On August 13, 2012, the Board denied⁹ the request for review. A hearing to adjudicate the SP's correct assessment for the 2011 and 2012 taxation years was set for August 24, 2015¹⁰ but was subsequently adjourned three times at the request of the Appellants¹¹.

ISSUE

3The SP is a 1,400 square foot freehold end unit townhouse. It was built in 1965 and is situated on a 2,040 square foot lot. The Appellants purchased the SP in July of 2010 for $250,000. MPAC returned the SP's assessment at $264,000¹² for the 2011 and 2012 years using the sales comparison approach to value. The Board received the parties written submissions on or about July 14, 2016 and will decide the matter based on the evidence contained therein and outlined in the attached Appendix A.

4MPAC, in their written submissions prepared by Ms. Liane Arcand, stated that the SP's returned assessment should be reduced to $242,000 and that value is reasonable and therefore correct¹³. She also stated that similar properties in the vicinity have been assessed lower than their current value. Therefore, "an equity adjustment may be warranted for the SP"¹⁴.

5The Appellants submitted a number of documents to support their request that the Board:

a) Determine "the right assessment value of the property throughout time due to MPAC's historical error and not only from 2008 forward as MPAC pretends. For this MPAC has to provide the Board with all the necessary information"¹⁵;

b) Make a "determination based on the evidence provided by the Appellants that shows that the mistake existed already in the Assessment Roll in the 1997 for the Taxation Year 1998"¹⁶ and,

c) "(D)etermine an approximate date when the error started based on the evidence"¹⁷.

6The Appellants also requested that the Board:

a) "(D)eclares that MPAC made an error in the frontage of the property;

b) (C)onduct its own analysis to determine the right assessment value considering the fact that MPAC did not determine when the error in frontage occurred;

c) (D)eclares that MPAC through its error has interfered with the rights and interest of the Appellants;

d) (R)etain a date and make a declaration determining when MPAC's error first occurred and;

e) (O)rder MPAC to compensate the Appellants for their economic losses and interference with their lives and well being;

f) (O)rder costs against MPAC, and

g) (A)ny other remedy the Board deems appropriate in the circumstances of this case"¹⁸.

7The Appellants did not offer an opinion as to the SP's correct value assessment for the 2011 and 2012 taxation years or whether an equity adjustment is required.

8The issue that the Board has to determine is the SP's assessment for the 2011 and 2012 taxation years. This came about because the Appellants appealed the SP's assessment under authority of s. 40(1)(a)(i) of the Assessment Act, R.S.O. 1990, c. A.31 (“Act"). That section allows an appeal if a person believes the current value of the person's land is incorrect. The Board's jurisdiction is defined and limited by the Act; that being s. 40(19), 40(22), 44(3) and 45.

9Section 40(19) states:

Board to make determination. - After hearing the evidence and the submissions of the parties, the Board shall determine the matter. (Emphasis added).

10Section 40(22) states:

Power to determine law and fact - The Assessment Review Board, as to all matters within its jurisdiction under this section, has authority to hear and determine all questions of law or of fact and a decision of the Board under this section is final and binding unless it is appealed under section 43.1.

11Section 44(3) states:

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. (Emphasis added).

12Section 45 states:

Powers and functions of Assessment Review Board

Upon an appeal with respect to an assessment, the Assessment Review Board may review the assessment and, for the purpose 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.

13Section 40(19) clearly states that the Board shall determine the matter. In this case, the matter to be determined is the SP's current value for the 2011 and 2012 taxation years. Once that task is completed, the Board must 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. After reviewing the provisions of the Act, the Board is of the view that it would be acting outside its jurisdiction to make a finding or determine matters not relevant to the SP's current value assessment (“CVA”) for the 2011 and 2012 taxation years. Consequently, the Board will not offer an opinion or comment on the Appellants’ request outlined in paragraphs [5] and [6] above that are not relevant to determining the SP's current value for the 2011 and 2012 taxation years. The cost request is addressed starting at paragraph [29] below.

DECISION

14The Board finds that the SP's current value is $225,000 and that amount is equitable with the assessments of similar lands in the vicinity. Consequently, the SP's returned assessment in the amount of $264,000 is reduced to $225,000 for the 2011 and 2012 taxation years.

REASONS FOR DECISION

The Legislation

15Section 1 of the Act defines current value as follows:

“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.

16Section 19.(1) of the Act states:

19.(1) Assessment based on current value. – The assessment of land shall be based on its current value.

17Section 19.2(1) of the Act states:

Valuation days

19.2 (1) 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.

Exception

(5) 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.

18Section 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,

(c) determine the current value of the land; and

(d) 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.

MPAC’s Position

19MPAC submitted a report (Exhibit 1 - See Appendix A) in support of their recommendation to reduce the assessment to $242,000. MPAC compared the characteristics of six sales comparables to that of the SP. Like the SP, all the comparables are townhouse residential properties and are located near the SP.

20MPAC concluded that the Board should accept their recommendation because the six sales comparables demonstrates that the "Current Value of $242,000 for the subject property is reasonable and therefore "correct" ... "¹⁹.

Appellants’ Position

21The Appellants submitted a report and supporting documentation (Exhibit 2 - See Appendix A). They requested that the Board determine the SP's current value but did not offer an opinion on current value or the equity of the assessment. They also made several other requests that are outlined in paragraphs [5] and [6] above and addressed by the Board in paragraph [13] above.

Board's Analysis - Current Value

22The best evidence of current value is the sale of SP on or near the valuation day. When no such sale occurs, the Board looks to the recent sale of similar vicinity properties to determine current value. The Board finds that the sale of the SP is not the best evidence of current value because it occurred some two and a half years after the valuation day²⁰. MPAC's comparable sales evidence²¹ which is time adjusted to the valuation day provides the best evidence of current value. The Board also considered six other townhouse sales comparables (Exhibit 2 - pp 66-67) but rejects them on the basis that they do not list two important details; that being number of bedrooms and whether or not the comparables are End Unit townhouses. These important details are shown in MPAC's evidence. When making a sales comparison to the SP, the Board prefers to utilize sales evidence that lists the most relevant information and exclude those that do not.

23Table 1 below lists the characteristics that the Board considers important in determining current value in this case. The characteristics are listed in descending order of influence on current value. The Board believes that in this case, an end unit has the greatest influence on current value and central air has the least influence. Several details such as year built, frontage, quality of construction and lot size are not listed because they are the same as the SP or fractionally different. For example, the frontage for the SP is 20.4 feet; the sale comparables' frontage range from 20.01 feet to 20.44 feet.

24The Board carefully examined the contents of Table 1 to ascertain whether the sale comparables are Inferior, Relatively Comparable ("RC") or Superior to the SP. The sales comparables' correlation to the SP as shown in the last column of Table 1, establishes the SP's current value range as illustrated in Figure 1 below.

Table 1

Property	TAS Price22	End Unit	Total Square Feet.	Renovation	Bedrooms	Central Air	Inferior, RC or Superior to the SP
SP - 1324 Morrison	$250,00023	Yes	1,400	Yes	4	Yes
A - 1311 Cornell	$210,322	Yes	1,431	No	4	No	RC
B - 1326 Morrison	$200,774	No	1,400	No	4	No	Inferior
C - 1332 Morrison	$194,198	No	1,431	No	4	No	Inferior
D - 1336 Morrison	$193,724	No	1,260	No	3	No	Inferior
E - 1338 Morrison	$204,505	No	1,340	No	3	No	Inferior
F - 1318 Morrison	$213,790	Yes	1,370	No	4	No	RC

Figure 1

SP's Current Value Range Established by the RC Sales A & F ← $210,322 $213,790 →

25The Board would normally find that the SP's current value is located at the mid-point of the current value range established by the RC sales comparables. However, the Board notes that in this case the SP, unlike the RC comparables, was renovated in 2004 and has central air conditioning. This necessitates an adjustment to the current value amount established by the Mid-Point. This is achieved by determining the value of the missing items (Renovation and Central Air) and adding it to the Mid-Point amount ($212,061). The SP's property assessment information²⁴ provides the only evidence before the Board regarding the current value of the noted items. The 2004 renovation is valued at $10,220 and central air is valued at $2,900. The total ($13,120), when added to the Mid-Point amount, results in a current value finding by the Board in the amount of $225,181, rounded to $225,000.

Board's Analysis - Equity

26The Board reviewed the value at which similar lands in the vicinity are assessed and finds that an equity adjustment is not required for the SP. MPAC was the only party to make an equity submission. On page 17 of Exhibit 1, Ms. Arcand, stated that from her analysis an equity adjustment may be warranted having found that the sale of 30 properties in the vicinity of the SP have a median Assessment to Time Adjustment Sales (TASR) ratio of 0.94. The median was developed from vicinity residential sales comprising of seven "301" property coded properties (single-family residences) and 23 "309" property coded properties (townhouses). When the 301 code properties are removed from the selection, the median changes to 1.03. This is within the residential TASR range (five percent) that the Board usually finds acceptable and no equity adjustments are deemed necessary.

27The Appellant's evidence also includes two other equity studies that were prepared by MPAC. Those studies conclude that the SP was equitably assessed compared to similar properties in the vicinity²⁵. The first study of 39 properties includes some non "309" coded properties and produced a median TASR of 0.99. The second study of 30 properties provides the best equity evidence because it only includes properties that are most similar to the SP; that being "309" coded properties. Since the median TASR for the second study is 1.00, the Board finds that the SP's CVA in the amount of $225,000 is equitable with that of similar lands in the vicinity.

CONCLUSION

28The Board finds the SP's CVA to be $225,000 for the 2011 and 2012 taxation years and that it is equitable with the assessment of similar lands in the vicinity. Therefore, the SP's returned assessment in the amount of $264,000 is reduced to $225,000 for the 2011 and 2012 taxation years.

COSTS

29In order to award costs, the Board must find that a party acted unreasonably, frivolously, vexatiously, or in bad faith. The Board reviewed the evidence and finds that MPAC did not act unreasonably, frivolously, vexatiously, or in bad faith. The Board's rules pertaining costs are listed below.

30Rule 137 of the Board's Rules states:

Considerations by the Board

The Board in determining whether a party has acted unreasonably, frivolously, vexatiously, or in bad faith shall consider all of the circumstances, including, without limiting the generality of the foregoing:

(a) a party failing to attend a hearing before the Board or to send a representative when properly given notice, without contacting the Board and other parties to the hearing;

(b) a party failing to comply in a timely manner with a Procedural Order, case or appeal(s) management plan or direction of the Board where the result therefrom is undue prejudice or delay to another party or parties in the proceedings before the Board;

(c) a party failing to comply in a timely manner with the disclosure or discovery requirements set out in the Board’s Rules of Practice or order or direction of the Board, including, without limiting the generality of the foregoing, the disclosure requirements respecting documents, particulars, or constitutional issues, provisions of responses to undertakings given on discovery including document disclosure; or

(d) a party knowingly presenting false or misleading evidence.

31Rule 138 of the Board's Rules states:

When Costs may be Awarded

Where the Board finds that a party has acted unreasonably, frivolously, vexatiously, or in bad faith, the Board may order that party to pay the costs of another party or parties to the proceedings subject to Rule 139 respecting the amount of costs that may be ordered.

32The Appellants based their cost submission on three things. The first being the fact that MPAC recommended two different assessments²⁶ for the subject property, ($218,000 and $242,000). The Board is of the view that this does not amount to "Bad Faith" because estimating a property's current value assessment is not an exact science. It depends on many factors including the quality of evidence and the training and experience of the person offering the estimate. It is therefore not surprising that two different assessors came to different conclusions (11% difference).

33The second item consists of allegations that MPAC "doctored its own legal document, provided to the Board during the Motion for Discovery..." and was systematically uncooperative "in refusing to provide us with the information requested²⁷.” Since discovery issues were addressed by the Board in DM 113215 and the Chair refused to consider a request for review, this panel of the Board cannot comment or make a cost decision on Appellants' discovery allegations because Rule 141(2)(b) states that the Board will not review decisions on requests for review.

34The last item is the fact that the returned assessment is based on inaccurate frontage information. The Board also rejects this "Bad Faith" allegation because the evidence indicates that MPAC first detected the error and informed the Appellants of it. MPAC then attempted to correct the error by offering to reduce the SP's returned assessment. MPAC's action with respect to the "wrong frontage" allegation cannot in any way be described as acting in bad faith. The Board is of the view that MPAC acted professionally when they informed the Appellants of the frontage error after discovering their records were inaccurate.

35Consequently, the Appellants’ request for costs is denied.

“Donald Whitehurst”

DONALD WHITEHURST MEMBER Assessment Review Board A constituent tribunal of Environment and Land Tribunals Ontario Website: www.elto.gov.on.ca Telephone: 416-212-6349 Toll Free: 1-866-448-2248

Appendix A

MPAC's Exhibit 1

Page(s)	MPAC's Evidence - Description
1	MPAC's Affidavit of Service
2-3	Unsigned note addressed to B. Carlos & G. Ourania dated June 23, 2016.
4-7	Valuation Report prepared by L. Arcand.
8-9	Appendix A: Market Analysis.
10	Market Analysis Map.
11	Price Changes Over Time.
12	Table 1: Time Adjustment Factors.
13-16	Appendix B: Sales for Price Change Over Time.
17-18	Equity Analysis for the Subject Property.
19	Property Assessment Details (Prior to Correction) for the Subject Property.
20	Property Assessment Details for the Subject Property.
21-22	Rejected Request for Reconsideration for the 2011 Tax Year.
23-24	Land Transfer Application dated July 16, 2010 for the Subject Property
25-26	Land Transfer Tax Statements for the Subject Property - Reg # OC1135702
27	1997 Plan of Survey for Block "E" Registered Plan 447761
28	Diagram - Zoning Residential
29-31	ELTO letter dated August 13, 2012 to O. Georgoulas and C. Bernal.
32-35	Ontario Assessment Review Board decision by I. Birnie DM 209

Appellant's Exhibit 2

Page(s)	Appellant's Evidence - Description
1-8	Appellant's Affidavit dated June 15, 2016.
9-13	Appellant's Submissions Supporting Appeal # 3104427.
14	Exhibit A - 2011-12 Property Assessment Notice for 1324 Morrison Dr.
15	Exhibit B - MPAC Request for Reconsideration form for the Subject Property.
16-20	Exhibit C - Property Assessment Details for 1324 Morrison Drive
21	Exhibit D - Rejected revised assessment for 2011.
22-41	Exhibit E - MPAC's Valuation Report prepared by A. Matthews.
42-43	Exhibit F - Documents Requested since February 17, 2011.
44-50	Exhibit G - MPAC letter dated October 7, 2011.
51-69	Exhibit H - FOI Records
70-72	Exhibit I - Assessment Roll dated June 25, 1998.
73-82	Exhibit J - MPAC letter dated July 20, 2015 & attachments for 1324 Morrison Dr.
83-97	Exhibit K - MPAC's Valuation Report prepared by L. Arcand
98-101	Exhibit L - Ottawa Tax Bill, Property Assessment Details & Profile

Footnotes

1. 1Exhibit 2 at pp. 1, 9 and 69.
2. 2Ibid at p. 11.
3. 3There are several references to this and like statements in the appellant's submission. See Exhibit 2 at pp 1-13.
4. 4Exhibit 2 at p. 24; Ms. A. Matthews' assessment report for the SP.
5. 5Ibid at p. 83; Ms. L. Arcand's assessment report for the SP.
6. 6Ibid at p. 11.
7. 7Ibid at p. 10.
8. 8Exhibit 1 at p. 29.
9. 9Exhibit 1 at pp. 29-31.
10. 10Hearing Number 589829.
11. 11Hearing Numbers 597638, 612732 and 625274.
12. 12Exhibit 2 at p. 14.
13. 13Exhibit 1 at p. 7.
14. 14Ibid at p. 17.
15. 15Exhibit 2 at p. 12.
16. 16Ibid
17. 17Ibid..
18. 18Exhibit 2 at pp. 12-13.
19. 19Exhibit 1 at p. 7.
20. 20January 1, 2008 is the Valuation Day for the 2011 and 2012 taxation years.
21. 21Exhibit 1 at pp. 8-9.
22. 22The Comparables' Sale Price Time Adjusted to the valuation date of January 1, 2008.
23. 23Not time adjusted to the valuation date.
24. 24Exhibit 1 at p. 19 and Exhibit 2 at p. 16.
25. 25Exhibit 1 at pp. 30-38.
26. 26Exhibit 2 at pp 24 & 86.
27. 27Exhibit 2 at pl 11.