Kryworuk v. Municipal Property Assessment Corporation, 2016 CanLII 5571

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: February 5, 2016 FILE NO.: WR 138286

Assessed Person(s): Peter Kryworuk, Lucia Diane Janek and Mary Ann Kryworuk Appellant(s): Peter Kryworuk and Lucia Diane Janek Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 26 Respondent(s): Municipality of Lambton Shores

Property Location(s): Pinetree Drive Municipality(ies): Municipality of Lambton Shores Roll Number(s): 3845-460-090-54638-0000 Appeal Number(s): 3095229 Taxation Year(s): 2015 Hearing Event No.: 608634

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

Heard: January 11, 2016 in Lambton Shores, Ontario

APPEARANCES:

Parties	Representative
Peter Kryworuk and Lucia Janek	Peter Kryworuk
MPAC	Jane Sokol-Kennedy
Municipality of Lambton Shores	No one appeared

DECISION OF THE BOARD DELIVERED BY JOANNE LAWS

INTRODUCTION

1The subject property is a vacant lot located in a subdivision known as Huron Woods in the Municipality of Lambton Shores. Lake Huron, Pinery Provincial Park, the Village of Grand Bend and Highway 21 border Huron Woods.

2The parties agree that the lot was heavily wooded until July 2014 when a tornado damaged or destroyed many of the trees. The appellant, Peter Kryworuk, takes the position that the loss of the trees reduces the value of the subject property and he is seeking a reduction of the assessed value for the 2015 taxation year.

3Jane Sokol-Kennedy, representing MPAC, takes the position that the loss of the trees does not affect the current value. However, during the Request for Reconsideration (“RfR”) process, the assessment as returned of $209,000 was reduced to $194,000 to reflect corrections to the lot measurements. Ms. Sokol-Kennedy takes the position that $194,000 as of the January 1, 2012 valuation day is the current value and is equitable.

[4] From the evidence presented at the hearing, the Board must determine a. The current value of the subject property and b. Whether the assessment of the subject property should be reduced to make it equitable with that of similar properties in the vicinity.

DECISION

5The current value of the subject property is reduced from $209,000 to $194,000 in the residential tax class for the 2015 taxation year.

6No adjustment is required for the purpose of equity.

REASONS FOR DECISION

Legislation

7In determining the value at which land shall be assessed, the Board must have regard to the following provisions of the Assessment Act (“Act”):

8Section 19.(1) of the Act states:

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

9Section 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.

10In determining the value at which any land shall be assessed, s. 44.(3)(a) and (b) of the Act requires the Board to do two things:

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.

Evidence, Arguments and Analysis

11This is an appeal of the 2015 taxation year assessment.

12At the commencement of the hearing, Mr. Kryworuk stated he has no issue with MPAC’s valuation methodology or MPAC’s physical data regarding the subject property. His only issue is whether the loss of the trees on this vacant lot reduces its value.

13The subject property has an effective site area of 39,331.44 square feet (“sq. ft.”) with approximately 259 feet of frontage onto a public walkway called Pinetree Crescent and it is 152 feet deep. Pinetree Crescent is an unpaved public walkway used to access Lake Huron. MPAC has allocated a 5% reduction to the assessment for abutting a public walkway.

14Mr. Kryworuk owns an abutting property which is improved with a cottage. He and his sister purchased the subject property in the mid 1980s to add privacy and with the view to build on it at some later date.

15The parties agree that the subject property was affected by a tornado in the summer of 2014. Mr. Kryworuk submits that 32 mature trees, both deciduous and evergreen, along with many smaller trees were damaged or destroyed. He argues that the trees added value to the subject property, both for marketability and for privacy and that without the trees the value is diminished. He submits that fire, demolition or other damage to buildings would reduce the assessed value and argues that damage to trees also decreases the value.

16Mr. Kryworuk presented a book of photographs (Exhibit 4) showing the subject property after the tornado and during and after the removal of the damaged trees. The photographs show that the privacy between the improved abutting properties is diminished and that the re-planting of trees has occurred. Mr. Kryworuk also included photographs of neighbouring, undamaged properties to illustrate the density and privacy afforded by the woods.

17Mr. Kryworuk complained that MPAC did not use sales of properties affected by tornado damage to determine the subject property’s current value. The sales used by MPAC occurred close to the January 1, 2012 valuation day. The Act provides that assessments for the 2015 taxation year reflect the current value as of January 1, 2012 so it is reasonable that MPAC’s sales evidence focus on sales that occurred near that date rather than near the tornado date, some two-and-one-half years later. However, Mr. Kryworuk’s issue has merit and should be explored. Do trees on a residential property have value? Ms. Sokol-Kennedy acknowledges that the subject property received substantial damage from the tornado but testified she could find no data or sales indicating that the loss of trees on residential land reduces value. She testified that MPAC’s data for sales after a 2011 tornado affected nearby Goderich do not indicate a value reduction from tree losses. MPAC’s position is that Mr. Kryworuk did not lose the use of the land and that there is no value attached to factor exceptionally treed and wooded residential lots.

18When asked by the Board what value he was seeking, Mr. Kryworuk stated that, in his opinion, the loss of the trees is worth 20-25%. Unfortunately, he provided no evidence such as sales or appraisal reports and he called no witnesses in support of his opinion. The only evidence Mr. Kryworuk presented was the photographs.

19In support of her recommended assessment of $194,000, Ms. Sokol-Kennedy presented six sales of vacant lots in the Huron Woods subdivision (Exhibit 1, Appendix A). The sales occurred close to the valuation day of January 1, 2012. Each of the properties, including the subject property, is described as ‘exceptionally treed/wooded’. None of the suggested comparables abut a public walkway. The lots range in size from 20,527 to 39,152.70 sq. ft. Of these sales, I find that three are relatively comparable to the subject property based upon their site area.

20Sale B (Roll 3845-460-090-54506-0000) has an effective lot size of 39,152.70 sq. ft. It is located farther from Lake Huron than the subject property. It sold for $180,000 in July 2011, which MPAC time-adjusted to the January 1, 2012 valuation day at $182,542 or $4.66 per square foot. Due to its location, I consider it to be slightly inferior to the subject property.

21Sale C (Roll 3845-460-090-54600-0000) has an effective lot size of 31,165 sq. ft. It is a corner lot and it is located farther from Lake Huron than the subject property. It is assessed as a waterfront on a river however the waterfront is qualified as weedy, swampy and with algae. It sold in September 2012 and the time-adjusted sale price is $195,786 or $6.28 per square foot. On balance, I consider it to be comparable the subject property.

22Sale F (Roll 3845-460-090-54641-0000) has an effective lot size of 38,361.60 sq. ft. It is located very near the subject property. It sold in October 2010 and the time-adjusted sale price is $226,386 or $5.95 per sq. ft. Based on the above, I consider it to be comparable to the subject property.

23MPAC recommends an assessment of $194,000 or $4.93 per sq. ft. Ms. Sokol-Kennedy argues that the recommended assessment is the current value as it falls within the range of her comparable sales values, it includes a 5% reduction, which the other properties do not have, and the subject property has significantly more frontage (259.30 feet) than the comparables (85 ft., 115 ft and 88.80 ft., respectively).

24I am not persuaded that the value of the subject property has decreased due to the loss of trees. Mr. Kryworuk has lost privacy from the perspective of his abutting cottage property. This may decrease that property’s value, but not necessarily the subject property’s. Mr. Kryworuk argues that the subject property has lost its marketability however he presented no supporting evidence. He submits that one of the reasons he and his sister purchased the lot was to develop it. One might argue that the value has increased because it will be less expensive to build upon now that it is cleared. In any event, it is reasonable to conclude that a substantially un-treed lot has more value or is more desirable to a larger number of prospective purchasers. The value of the wooded lot has limited value to a limited market, that is, those who own abutting cottages and want the wooded lot for privacy. Finally, I received no evidence from either party indicating that the trees added value or that the lack thereof reduced the value.

25Based upon the evidence presented, I find that the recommended assessment of $194,000 is the current value of the subject property for the 2015 taxation year. This value is supported by the three preferred sales and reflects a reduction of the subject property due to the abutting walkway.

Equity

26MPAC provided an equity analysis showing an assessment to sales ratio for 30 properties within 1.52 kilometres of the subject property. This analysis shows a range of ratios from 0.77 to 1.36 with a median of 1.00 which indicates that assessments of residential properties in the vicinity correspond well to the market value of those properties. While it shows some properties are under assessed, it shows an equal number that are over-assessed.

27The evidence before me is that there is no consistent under assessment of similar property in the vicinity. As such, I do not find that any adjustment is necessary to make the assessment of the subject property equitable with that of similar properties in the vicinity.

CONCLUSION

28In conclusion, the current value of the subject property is reduced from $209,000 to $194,000 for the 2015 taxation year.

29No adjustment is required for the purpose of equity.