James McConnell v. Municipal Property Assessment Corporation, 2016 CanLII 54956

Assessment Review Board / Commission de révision de l’évaluation foncière

ISSUE DATE: August 19, 2016

FILE NO.: WR 140642

Assessed Person(s): James McConnell

Appellant(s): James McConnell

Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 26

Respondent(s): Municipality of Lambton Shores

Property Location(s): 6376 Cottage Way Lane

Municipality(ies): Municipality of Lambton Shores

Roll Number(s): 3845-460-040-37200-0000

Appeal Number(s): 3123027 and 3159446 (deemed 2016)

Taxation Year(s): 2015 and deemed 2016

Hearing Event No.: 625651

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

Heard: May 16, 2016 in Grand Bend, Ontario

APPEARANCES:

Parties	Counsel+/Representative
James McConnell	Henry Godinho
MPAC	Don Mitchell Jane Sokol-Kennedy
Municipality of Lambton Shores	No one appeared

DECISION OF THE BOARD DELIVERED BY DAN WEAGANT

INTRODUCTION

1The subject property is a seasonal, single family dwelling with direct frontage of 44.34 feet on Ipperwash Beach on the shore of Lake Huron. The property has a depth of 310 feet, with a site area of 13,745 square feet (“sq. ft.”) and is improved with a two storey dwelling of 2,986 sq. ft. of living area. The subject dwelling was constructed in 2000 and is located just east of West Ipperwash Road, one of the three public roads that provide access to the waterfront in this area.

2For the 2015 taxation year, MPAC has determined a current value of $767,000, based on a valuation date of January 1, 2012 as prescribed by the Assessment Act, (“Act”). Upon the review resulting from a Request for Reconsideration filed by the Appellant, MPAC reduced the value by $11,000 to $756,000, reflecting an adjustment to the value of the existing porch. MPAC recommended $756,000 as the current value.

3The Appellant believes the recommended value is still too high and the correct assessment for the 2015 taxation year is $512,000.

4The Board must determine two things in this appeal. First, the Board must decide on the correct current value of the property, based on the evidence at the hearing. Once the current value is determined, the Board must also have reference to the assessments of similar properties in the vicinity of the subject property and if there is reason to do so, reduce the assessment to make it equitable.

DECISION

5The Board finds that the current value of the subject property is $756,000, in the residential property class.

6The Board also finds that when reference is made to the assessments of similar properties in the vicinity, the assessment is reduced to $729,000. Accordingly, the assessment of the property at 6376 Cottage Way Lane is reduced, from $767,000 to $729,000 for the 2015 taxation year. This same result is deemed for the 2016 taxation year.

LEGISLATION

7In making its determination of this appeal, the Board must consider the following sections of the Act:

8Section 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.

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. (1) 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 or 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

12Jane Sokol-Kennedy, an Assessor with MPAC, prepared a valuation study that compares the sale prices of six properties in the area with lake-frontage, to the subject property. The sale values of these six comparables were time-adjusted as a means of comparing them as though each sale occurred on January 1, 2012, the valuation day for the taxation year under appeal.

13Ms. Sokol-Kennedy summarized the six properties in her study as follows:

• Sale A has a larger lake frontage and a larger lot than the subject property. It was built 37 years before the subject property and has no secondary structures. The dwelling on Sale A is substantially smaller than that of the subject property and has a lower quality rating. The time-adjusted sale (TAS) value of Sale A is $366,545. Ms. Sokol-Kennedy considers Sale A to be inferior in value when compared to the subject property.
• Sale B has a larger waterfront and lot area, but has a substantially smaller dwelling of similar quality and includes an attached garage. Sale B has a TAS price of $777,195. Ms. Sokol-Kennedy considers Sale B to be relatively comparable to the subject property, with particular emphasis on its similar waterfront location and quality rating.
• Sale C has a larger waterfront and lot size, with an older dwelling of substantially smaller size. Sale C includes a garage and has a lower quality class than the subject property. Ms. Sokol-Kennedy testified that this lower quality was the major determining factor of her opinion that this property is inferior to the subject property. The TAS price is $512,816.
• Sale D has a larger waterfront and lot area than the subject property. The dwelling is 80 years older than the subject property and includes five additional cabins that are revenue-generating from time to time. The main dwelling is 1,392 sq. ft. smaller than the subject dwelling. Ms. Sokol-Kennedy considers the TAS price of $614,630 to be inferior to the value of the subject property.
• Sale E has a larger water frontage and a larger lot than the subject property. The dwelling is 1,688 sq. ft. smaller than the subject property. Ms. Sokol-Kennedy considers Sale E to be inferior to the subject property, with a TAS price of $423,198.
• Sale F has a TAS price of $822,158. The water frontage and lot area are both larger than the subject property and the dwelling is two years newer than the subject property. It is 1,728 sq. ft. smaller than the subject property and has a garage. Ms. Sokol-Kennedy considers Sale F to be superior in value when compared to the subject property when their quality classes are considered.

14Ms. Sokol-Kennedy believes the most comparable property in the list of sales is Sale B, located at 6316 William Street, for the following reasons:

• Sale B occurred within eight months of the valuation date. Therefore, the sale price required a very small adjustment for comparison;
• The quality class, size and age of Sale B are the most similar to the subject property.

15On the matter of current value, Ms. Sokol-Kennedy believes her analysis shows that the value recommended is both reasonable and correct.

16With respect to equity of assessment, Ms. Sokol Kennedy provided the Board with a summary of an Assessment to Sale Ratio (ASR) study which compares the assessment of residential properties in the vicinity to their respective TAS prices. The total number of sales used in her analysis was 480 which occurred between January 2009 and December 2012. The median ASR of these 480 sales is 0.965 which indicates that, generally speaking, similar properties in the vicinity are assessed slightly below their TAS prices or, their current value.

APPELLANT’S EVIDENCE

17Henry Godhino represented the Appellant, Mr. McConnell. Mr Godhino intended to prove that the returned value for the 2015 taxation year is not correct for the following reasons:

• Events related to unrest between the local cottage owners and nearby First Nations during 2014 were not taken into consideration when determining the returned values;
• The legal uncertainty with respect to ownership of water frontage in the area was not taken into consideration by MPAC;
• The impacts of the removal of a permanent traffic barrier at West Ipperwash Road has not been taken into account in MPAC’s returned value.

18Mr Godhino is very concerned about the unrest in the neighbourhood, arising from a series of events with corresponding impacts on the use and, in his opinion, value of the subject property and others in the vicinity with similar challenges.

19He submitted a list of properties that have sold in the area since 2012. Mr. Godhino suggests by this summary of sales that values are going down in the area, to such an extent that by 2015, there were no new listings or sales, and that this condition suggests people recognize values are reduced and are not listing as a result.

20Mr. Godhino submitted a summary of Municipal Council minutes and a letter from the local OPP detachment, indicating that the local municipality has no authority over treaty of First Nations rights or claims in the area. Mr. Godhino submitted that this indicates that there is some dispute over the title of the subject property and that this rationally should lead to a reduction in value.

21Mr. Godhino provided the Board with a series of documents referring to a ‘historical trail’ that follows the waterfront, indicating that there may be some rights, referred to as a ‘Crown Reservation’ that follows the Lake Huron shoreline in the vicinity of the subject property, extending 7.0 metres back from the water’s edge.

22Finally, Mr. Godhino cited portions of the report on the Inquiry into the death of Dudley George, where the municipality suggests that properties in the vicinity of the land dispute in the 1990s should be re-assessed at less than 50% to account for the disruption in the value of properties in the area. He relied on this statement to support that property values should be reduced as a result of the occurrences in 2014, as related above.

ANALYSIS

23The Board notes that the sales per sq. ft. of the six comparable properties in evidence have a median of $307 and an average of $313. If these figures were to be applied to the subject property, the value determined would be approximately $900,000. By using the three most comparable properties in evidence, Sales B, C and F, and using their respective living and finished basement areas, the median is $298 and the average is $293, resulting in a value when applied to the subject property of approximately $875,000. Neither party suggests that either of these values is correct, but they do indicate that all of the sales comparisons are valued differently than the subject property. The Board notes further that the glaring difference between the subject property and five of the comparables is lake-frontage. Only Sale E has a similar lot frontage, with the rest of the comparables having a much larger frontage. Sale E by contrast, is a smaller and much older single-storey dwelling which, when compared to the subject property, is the least comparable in all other respects.

24Comparing the average per sq. ft. sale value of all six sales shows that the subject property, with a smaller lot frontage, is reasonably valued when compared to the comparables.

25The Board finds that the Appellant’s submissions and documents were not specific with respect to the impact on property values. Mr. Mitchell, in his cross- examination of Mr. Godhino was able to refute each of the Appellant’s assertions by:

• indicating that the events of 2014 are in fact representative of events that have been ongoing in the Ipperwash Beach area for many years;
• The specific reduction in value owing to the presence of provincial, federal or First Nations ‘reservations’, easements or any other encumbrance are not supported with any documentary evidence and are based on conjecture, and on statements from people on the community who were not present at the hearing;
• The sales summary presented by the Appellant actually shows that prices in the area rose from 2008 to the valuation date of January 1, 2012;
• No connection between these events, past or distant past, have been made to the specific value of the property under appeal.

26Mr. Godhino did not submit any documentary evidence with respect to how the conditions in the greater neighbourhood impact the value of the subject property. The Board has no doubt that the situation is of concern, but without a quantification of the impact of the situation, the Board has no ability to use the narrative to amend the value.

27Instead, Mr. Godhino selected one of the comparable properties used by MPAC in their valuation study, submitting that Sale C at 6324 William Street is the most comparable of the six properties in MPAC’s study and therefore is the best indicator of the value of the subject property. In doing so, Mr. Godhino did not make any adjustments to the value of Sale C as it compares to the subject property with respect to age, style of building, overall size, location or amenity features within the two structures.

28In contrast, MPAC used six sales comparables that created a reasonable range of value for the subject property by making adjustments for size, age, location, condition and amenities among all of the properties in the valuation study. Specifically, Ms. Sokol-Kennedy cites Sale B, 6316 William Street as the most comparable to the subject property, indicating that the quality class, size and age all contribute to her submission that Sale B and the subject property have a similar value. The time-adjusted sale value of Sale B is $777,195.

29Mr. Mitchell submitted that without documentary evidence of a lower value from the Appellant, the Board would have to speculate as to any impact of the social situation in the neighbourhood on the subject property’s value and in doing so would come up with a value that is neither correct nor reasonable by any measure. The Board agrees with Mr. Mitchell on that point and finds that the best evidence of current value is that of MPAC’S, based on the per sq. ft. sale values of the comparables in evidence and a reasonable adjustment for a narrower lot frontage on Lake Huron that exists at the subject property.

30With respect to equity of assessment, the Board heard that the assessments of similar properties in the vicinity are regularly assessed at a value of 96.5 per cent of the time adjusted sale values for those same properties. For this reason, the Board finds that it is fair and equitable to apply this ASR to the current value found.

DECISION

31The Board finds that the current value of the subject property is $756,000, in the residential property class.

32The Board also finds that when reference is made to the assessments of similar properties in the vicinity, the assessment is reduced to $729,000. Accordingly, the assessment of the property at 6376 Cottage Way Lane is reduced, from $767,000 to $729,000 for the 2015 taxation year. This same result is deemed for the 2016 taxation year.

2016 DEEMED APPEAL

33An 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.

34Section 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.