Assessment Review Board
Commission de révision de l’évaluation foncière
ISSUE DATE: February 2, 2016
Assessed Person(s): Nemato Composites Inc.
Appellant(s): Atlantic Coated Papers Ltd.
Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 13
Respondent(s): Town of Whitby
Property Location(s): 1605 McEwen Drive
Municipality(ies): Town of Whitby
Roll Number(s): 1809-040-030-09810-0000
Appeal Number(s): 3035311
Taxation Year(s): 2014
Hearing Event No. 571658
Legislative Authority: Section 40 of the Assessment Act, R.S.O. 1990, c. A.31, as amended
Heard: November 7, 2014 in Whitby, Ontario
APPEARANCES:
Parties
Representative
Atlantic Coated Papers Ltd.
Chris Ratnasingham
MPAC
Aaron Glover
Town of Whitby
Janet Battersby
DECISION OF THE BOARD DELIVERED BY SANDRA DRIESEL
INTRODUCTION
1The Appellant purchased the subject property in 2013 for $1,600,000.
2This property, classified as industrial, is located in the Town of Whitby. Situated on a 5 acre lot, it is a steel frame building with a metal cladding exterior. The single storey 54,775 square foot building includes an office space, a warehouse with two mezzanines and a freight elevator.
3Mr. Glover used the Cost Approach to determine that as at January 1, 2012, the value of the building is $2,585,560 and the value of the land is $936,440, resulting in a total current value assessment of $3,522,000.
4Mr. Ratnasingham submits the best evidence as to a correct value of the subject property is the actual sale. He believes that a time adjusted sales value from September 2013 to the valuation date of January 1, 2012 would be $1,504,000. He argues that this is a valid sale that meets the test of an arm’s length sale between a willing seller and a willing buyer. He notes that this property was on the market for 9½ months. It was originally listed for $2,499,000 and subsequently reduced to $2,000,000 before selling at $1,600,000.
5The Appellant has submissions to support a low sales value as being due to the poor condition of the subject property. He called upon the owner and purchaser of the subject property, David Granovsky, to confirm that he negotiated the sale price while considering the condition of the subject property. An independent engineering report also suggests that the property required considerable repairs and that this situation would clearly impact the value of the subject property.
6The Appellant also questioned the value attributed to the apportioned value considered excess land. Currently, $170,000 is classified as excess land. Mr. Glover notes that for the 2015 and 2016 taxation years, MPAC has changed the value of the property from $3,522,000 to $3,515,000 through a minor correction of the records. Also, the excess land is to be valued at $230,000. The Appellant did not argue against this adjusted value for the excess land.
7Mr. Glover rejects the sale as being valid. He submits that a sale approximately 50% lesser than MPAC’s opinion of value is questionable. Further to this he argues that his analysis of four sales of comparable properties in the vicinity and a test of equity supports a correct current value of $3,522,000.
ISSUES
8MPAC argues that the sale on the subject property is not valid as it is too low.
9The parties disagree on the approach to valuing the subject property. MPAC argues that in the Town of Whitby, all properties of this type are valued using a “Cost Approach”. The Appellant argues that a valid sale on the subject property is the best evidence of the value of the property.
10The Board is to find a correct current value for the subject property for the 2014 taxation year that is equitable with the assessment of similar lands in the vicinity.
DECISION
11The Board finds that the current value of the subject property is $1,600,000 for the 2014 taxation year. This is to be apportioned as:
a. Industrial = (from $3,522,000) to $1,370,000
b. Excess land = (from $ 170,000) to $ 230,000
12The Board finds that the evidence does not support a finding that the assessment of the subject property should be reduced below the current value to make it equitable with the assessments of similar properties in the vicinity.
REASONS FOR DECISION
The Legislation
13The Board is directed by the following sections of the Assessment Act (“Act”):
14Section 19.(1) of the [Act](https://www.canlii.org/en/