Boehm v. Municipal Property Assessment Corporation, 2016 CanLII 54953

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE:

August 19, 2016

FILE NO.:

WR 141746

Assessed Person(s):

William Ralph Boehm, Karl William Boehm and John Robert Boehm

Appellant(s):

William Ralph Boehm and Karl William Boehm

Respondent(s):

Municipal Property Assessment Corporation (“MPAC”) Region 31

Respondent(s):

Municipality of Huron Shores

Property Location(s):

58 Cameron Road

Municipality(ies):

Municipality of Huron Shores

Roll Number(s):

5724-000-008-11300-0000

Appeal Number(s):

3134963 and 3160612

Taxation Year(s):

2015 and 2016

Hearing Event No.

633175

Legislative Authority:

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

Heard:

July 12, 2016 in Iron Bridge, Ontario

APPEARANCES:

Parties

Representative

William Ralph Boehm, Karl William Boehm and John Robert Boehm

William Ralph Boehm

MPAC

Antonietta Romano-Bitonti

Municipality of Huron Shores

No one appeared

DECISION OF THE BOARD DELIVERED BY DAN WEAGANT

INTRODUCTION

1The subject property is a 39.38-acre parcel with 2,792 feet of frontage on the west end of Bright Lake. The property has year-round municipal road access. A significant portion of the frontage on Bright Lake is described as being ‘wet, swampy and low’.

2For the 2015 taxation year, MPAC returned a current value assessment (“CVA”) of $216,000 in the residential property classification. For the 2016 taxation year, this value was adjusted to $173,000 in the same classification. There is no dispute with regard to the classification of the property. For the 2015 taxation year, MPAC recommends a reduction in assessment to $173,000 in accordance with its findings resulting from the Request for Reconsideration process.

3William Ralph Boehm (the “Appellant”) believes the recommended value is still too high and that the correct assessment is approximately $40,000, based on differences in the area affected by the wet, swampy and low condition which extends well back into the property annually in the spring.

4In its consideration of these appeals, the Assessment Review Board (the “Board”) must determine the correct current value of the subject property, based on the evidence at the hearing. Once that value is determined, the Board must also have reference to the assessments of similar properties in the vicinity and, if necessary, reduce the assessment to make it equitable.

DECISION

5The Board finds that the current value of the subject property at 58 Cameron Road is $98,000. The Board also finds that there is no evidence to suggest a reduction in this value is required for the purposes of making the assessment equitable.

6Accordingly, for the 2015 taxation year, the assessment of the subject property is reduced from $216,000 to $98,000 in the residential property classification. For the 2016 taxation year, the assessment is reduced from $173,000 to $98,000, in the residential property classification.

LEGISLATION

7In making its determination of these appeals, the Board must consider the relevant sections of the Assessment Act (“Act”).

8Section 1 of the Assessment 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.

9Section 19.(1) of the Act states:

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

10Section 40 of the Act states:

40.(1) Appeal to Assessment Review Board. Any person, including a municipality, a school board or, in the case of land in non-municipal territory, the Minister, may appeal in writing to the Assessment Review Board,

(a) on the basis that,

(i) the current value of the person’s land or another person’s land is incorrect,

(ii) the person or another person was wrongly placed on or omitted from the assessment roll,

(iii) the person or another person was wrongly placed on or omitted from the roll in respect of school support,

(iv) the classification of the person’s land or another person’s land is incorrect, or

(v) for land, portions of which are in different classes of real property, the determination of the share of the value of the land that is attributable to each class is incorrect; or

(b) on such other basis as the Minister may prescribe.

11Section 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.

MPAC’S EVIDENCE

12Antonietta Romano-Bitonti represented MPAC in these appeals. She applied the direct comparison approach to value, whereby the sales of comparable properties are used to make a determination of the value of the subject property. Ms. Romano-Bitonti selected six sales that occurred in proximity to the valuation date of January 1, 2012 which applies to the years under appeal. Each sale value in the sample was adjusted to account for the change in prices over time. These time adjusted sale (“TAS”) values are a means of comparing the sales of the six comparable properties to the subject property as though those sales occurred at or near the valuation date.

13Five of the six sales in the sample have frontage on Bright Lake; the fifth (Sale E) fronts onto the nearby Little Basswood Lake. Two of the sales are for the same property (Sales C and D). Ms. Romano-Bitonti testified that the characteristics of the two lakes are similar. All six comparable sales are vacant lots in the residential property classification. The characteristics of each of the six properties in Ms. Romano-Bitonti’s analysis follow.

Subject Property

Sale A roll # 008-03900

Sale B roll # 008-04300

*Sale C roll # 008-04200

*Sale D roll # 008-04200

Sale E roll # 008-32206

Sale F roll # 011-01500

Lake Frontage (feet)

2,792

690

100

100

100

113

100

Lot Area (Acres)

39.38

23.38

0.46

0.46

0.45

0.52

0.50

Exposure Direction

east

south

south

south

south

west

south

Waterfront Type

Swamp / marsh

Lake

Lake

Lake

Lake

Lake

Lake

Shoreline Type

Weedy /Algae / shallow

Weedy / Algae

Gravel

Weedy / Algae

Weedy / Algae

Gravel

Gravel

Sale Date

N/A

May 2009

August 2008

April 2011

July 2010

January 2008

June 2008

TAS Value

N/A

$98,073

$29,667

$68,043

$56,793

$54,686

$41,697

*Sales C and D are the same property with two separate sale dates

14Sales B through F all have significantly smaller lake frontages and lot areas than the subject property. Ms. Romano-Bitonti considers these comparable properties to be inferior in value when compared to the subject property as a result. The TAS values of these five comparable properties range from $29,667 to $68,043. Sale A has a lake frontage of 690 feet with a lot area of 23.38 acres. Ms. Romano-Bitonti considers Sale A to be relatively comparable owing to the extended waterfront and the relatively large lot size.

15Ms. Romano-Bitonti summarized her evidence by indicating the subject property should have a value that is higher than those properties she considers inferior to the subject property. When a comparison is made to Sale A, the most comparable property sale in the sample, Ms. Romano-Bitonti submits that the recommended value of the subject property falls within a reasonable range. She added that the weedy waterfront was taken into account when making the determination of value at $173,000.

APPELLANT’S EVIDENCE

16William Boehm represented the Appellants in this appeal. Mr. Boehm identified himself as a co-owner of the subject property. He characterized the property as family-owned. He testified that neither he nor his family have any plans to develop the property and in any case the local planning documents restrict development of the property owing to its site characteristics. He cited a government directive (no document was submitted) indicating that Bright Lake was at its capacity for development and future development is subject to very strict controls.

17In 2013, the property was severed and approximately 15 acres was given to Mr. Boehm’s cousin. The subject property is the residual land left after that severance. Mr Boehm testified that due to the weeds and aquatic vegetation of the lake front and shallowness of the shoreline, there is no opportunity for the placement of docks or any other boat access to the lake.

18Mr. Boehm also described a flooding event in September 2013 which caused Bright Lake to rise to a level sufficient to wash out a portion of Dayton Road, which the subject property also has frontage on. The flood waters effectively crossed the subject property in order to create this washout. Mr. Boehm contends that this event demonstrates that a good portion of the property is not usable for any purpose and, by submitting an aerial photo of the property, indicated that approximately half of the subject lot is impacted by what he refers to as swamp or bog.

19When asked by Ms. Romano-Bitonti if a building permit could be issued for development of the property, Mr. Boehm submitted that any building permit would be subject to a septic system requirement, which in all likelihood would be denied owing to the development capacity issues at Bright Lake. He further submitted that Bright Lake currently has ‘blue-green algae’ issue that restricts the use of the lake, its future development potential and ongoing enjoyment of the property.

20Mr. Boehm submitted three properties for comparison to the subject property for the purposes of determining its value. Property 1 is a 66-acre vacant parcel with 4,500 feet of frontage on Bright Lake and frontage on Dayton Road. It has a 2012 CVA of $97,000. Property 2 is a 141.5-acre property, also on Bright Lake with lake frontage of 1,000 feet. Property 2 has a 2012 CVA of $112,000. Property 3 is a 70-acre parcel, also on Bright Lake with 1,200 feet of shoreline. The 2012 CVA of Property 3 is $135,000.

21Mr. Boehm submitted that the swamp/bog area of his property, which comprises approximately half, is similar to his comparable Property 2 at a CVA rate of $794 per acre. His submitted further that the remaining area of his property should be assessed based on the average CVA of the three comparable properties in his sample, which is $1,397 per acre. Mr. Boehm summarized by submitting a value derived from the above at approximately $40,000.

ANALYSIS

22With regard to current value, the Board only has the evidence of MPAC, as Mr. Boehm’s documentary submissions essentially relate to equity of assessment when the subject property’s assessment is compared to the assessments of similar properties in the vicinity. The Board disregards Sales B through F of MPAC’s valuation analysis. Properties of approximately 100 feet of lakefront and 0.50 acres are not suitably comparable for the purposes of determining the current value of the subject property which has 2,792 feet of frontage and covers over 38 acres.

23The Board finds that the remaining sale submitted by MPAC is the best indicator of current value for the subject property, at $4,194.74 per acre. However, the Board is swayed by Mr. Boehm’s testimony with respect to the condition of the subject land and accepts that only 50% of it should be subject to this figure. For the remaining 50% of the land area, the Board applies the lowest per acre value indicated in evidence, that being the CVA of the Appellant’s Property 2, which also fronts on Bright Lake, with similar characteristics. The remaining 50% of the subject lands, the Board finds, is valued at $794 per acre.

24The result of the application of these rates is: 19.69 acres at $4,194.74 or $82,594 plus 19.69 acres at $794 or $15,634, for a total of $98,228 or $98,000, rounded.

25MPAC did not submit evidence with respect to equity of assessment. The Appellant provided the 2012 CVA of three properties in the vicinity of the subject property. The purpose of the equity review in the Act (s. 44.(3)b) is to insure that similar properties in the vicinity are equally or at least closely assessed when compared to one-another. This is a comparison that requires a larger sample than what is before the Board. Comparing the value of the subject property to the assessments of only three other properties does not fulfill the requirement, particularly when there is no sale information on the three properties in evidence. Accordingly, the Board finds that is has no evidence before it to suggest a further reduction in the current value determined is necessary to achieve equity of assessment for the subject property.

CONCLUSION

26The Board finds that the current value of the property at 58 Cameron Road is $98,000. The Board also finds that there is no evidence to suggest a reduction in this value is required for the purposes of making the assessment equitable.

27Accordingly, for the 2015 taxation year, the assessment of the subject property is reduced from $216,000 to $98,000 in the residential property classification. For the 2016 taxation year, the assessment is reduced from $173,000 to $98,000, in the residential property classification.