Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: September 2, 2016 FILE NO.: WR 139151

Assessed Person(s): Edward Liptay Appellant(s): Edward Liptay Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 15 Respondent(s): City of Burlington

Property Location(s): 3504 Lakeshore Road Municipality(ies): City of Burlington Roll Number(s): 2402-070-715-03800-0000 Appeal Number(s): 2936035 Taxation Year(s): 2012 Hearing Event No. 616130

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

Heard: February 22, 2016 in Burlington, Ontario

APPEARANCES:

Parties	Representative
Edward Liptay	Robert Baranowski
MPAC	John Cole
City of Mississauga	No one appeared

DECISION OF THE BOARD DELIVERED BY CRISTINA MARQUES

INTRODUCTION

1The subject property’s 2,907 square foot (“sq. ft.”) residence was built in 1983. It is described as a two storey dwelling with a 2,364 sq. ft. basement of which 995 sq. ft. are finished, and has a quality class 7.5. For the taxation year 2012, it was assessed at $2,191,000 based on an effective site area of 35,283.6 sq. ft. with 195 feet of water front.

2The Appellant rejects the assessment, and submits that for the 2012 taxation year the assessment should be $1,095,000 based on the average sale price per square foot of a nearby property.

ISSUES

3The issues to be determined are:

(i) The current value of the subject property as of January 1, 2008, being the “valuation day.”

(ii) Whether an assessment at current value is equitable with that of similar lands in the vicinity.

DECISION

4For reasons set out below, we find:

(i) The current value for the subject property as of January 1, 2008 is $2,191,000 (rounded).

(ii) An assessment at current value is equitable with the assessment of similar lands in the vicinity.

Legislation

5The Assessment Review Board’s (“Board”) jurisdiction to make corrections to an assessment is found in the Assessment Act, R.S.O. 1990, c. A.31, as amended (“Act”). Section 19.(1) of the Act provides that the assessment of a property must be based upon its current value:

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

6Section 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.

7Section 19.2(1) of the Act provides:

19.2(1) Valuation days. – Subject to subsection (5), the day as of which land is valued for a taxation year is determined as follows:

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.

8Section 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.

9Section 45 of the Act states:

45. Powers and functions of the Assessment Review Board. – Upon an appeal with respect to an assessment, the Assessment Review Board may review the assessment and, for the purposes 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.

Board’s Analysis

Current Value

10The best indicator of current value is an arm’s length and market-tested sale of a property on the valuation date, January 1, 2008 or close to it. Since the subject property did not sell, the Board relies upon the sale of similar properties in the vicinity on or close to the valuation day.

11John Cole, appearing for MPAC, testified that properties like the subject property are valued using the Direct Comparison Approach to Value. In support of the assessment as returned, the assessor presented Exhibit 1 consisting of two sets of comparable sales, photos of the subject property, and Maps locating the subject property and the suggested comparables, supporting his position to the valuation attributed to the subject property.

12The assessor identified two sales that are, in his view, similar to the subject property. They were chosen to demonstrate the relationship between MPAC’s valuation and the sales in the marketplace, and to show the accuracy of MPAC’s method of valuation through the Direct Comparison approach to value.

13Mr. Cole submitted that the time adjusted sale prices for the two comparables provide an indication of likely values for the subject property. Details of each property on Current Value Study are summarized in Table 1:

Table 1

	Address	Assessment	Sale Date	Sale/ Time Adjusted Sale ($)	Building Size (sq. ft.)	Quality of Construction	Lot Size (sq. ft.)	Year Built
Subject Property	3504 Lakeshore Road	2,191,000	n/a	n/a	2,907	Q7.5	195 ft. frontage/ 35,283.6 sq. ft.	1983
Sale A	2240 Lakeshore Road	1,822,000	Oct-2007	2,000,000/ 2,035,878	4,807	Q8	81 ft. frontage/ 28,314 sq. ft.	1984
Sale B	2414 Lakeshore Road	1,796,000	Sep-2007	1,850,000/ 1,896,798	2,783	Q7	100 ft. frontage/ 16,552.8 sq. ft.	2004

14Mr. Cole testified that the time adjusted sale prices of the two comparables provide a range of likely values for the subject property between $1,896,798 and $2,035,878. He relied on these sales to determine whether properties are assessed at or close to their current values. The assessor gave details on MPAC’s analysis of sales in the neighbourhood of the subject between January 2007 and December 2008, and stated that the area experienced an overall increase in real estate values of approximately 17.64% over that time frame. Time adjustment factors for each month during the study period were provided together with the data for the 240 sales analyzed. He submitted that the assessment as returned for the subject property at $2,191,000 is slightly higher than the range of the comparables because the subject property is a considerably larger lot and larger lake frontage, and for these reasons the assessment as returned is reflective of current value.

15Mr. Cole also presented the sales of two vacant land properties illustrating that vacant land sales were marketed at a higher value than the subject property’s assessment per linear foot of waterfront. Details of each property on Current Value Study are summarized in Table 2:

Table 2

	Address	Assessment	Sale Date	Sale/ Time Adjusted Sale ($)	Building Size (sq. ft.)	Quality of Construction	Lot Size (sq. ft.)	Year Built
Subject Property	3504 Lakeshore Road	2,191,000	n/a	n/a	2,907	Q7.5	195 ft. frontage/ 35,283.6 sq. ft.	1983
Sale A Vacant land	3156 Lakeshore Road	n/a	Jun-2007	1,300,000/ 1,386,171	n/a	n/a	100 ft. frontage/ 27,442.8 sq. ft.
Sale B Vacant land	123 Avondale Court	n/a	Nov-2008	1,650,000/ 1,499,428	n/a	n/a	99 ft. frontage/ 27,442.8 sq. ft.

16Mr. Cole testified that the time adjusted sale prices of the two vacant land comparables provide further evidence that the subject property is not over assessed. The two sales with smaller lots sold with values ranging between $13,862 and $15,146 per linear foot of waterfront, versus the subject property that is assessed at $11,236 per linear foot of water.

17Robert Baranowski, appearing for the appellant, disagreed with the assessor. In his view the sales presented by MPAC are not the most comparable properties to the subject property.

18Mr. Baranowski in support of his position that the subject property is over-assessed presented Exhibit 2 consisting of a comparable property report with one sale, and an MPAC 2012 base year Market Model Report for the City of Burlington.

19Mr. Cole opposed the submission of this exhibit because it was not disclosed to MPAC 21 days before the hearing, as per Board rules and regulations. The Board agrees with MPAC and will not accept this exhibit as evidence.

20For the purpose of a current value analysis the Board accepts MPAC’s sales as good comparables. Of the four sales two are lots with existing dwellings both located on Lakeshore Road with water frontage. The Board notices that Sale A has a much smaller water frontage at 81 ft. versus 195 ft. for the subject property, but has a quality 8 structure that is 1,900 sq. ft. larger than the subject. As for Sale B, the water frontage is 100 ft., also 95 ft. smaller than the subject property, and it has an almost identical size structure that is half a quality point lower than the subject property. The Board will not entertain finding a value for the subject property based on the value of the structures per sq. ft. of the comparable properties.

21Another good way to find correct value for properties of this type is based on the value of linear foot of water front, and as such will apply it in this case. The best evidence before the Board is the linear foot value of water frontage for all four properties proposed as good comparables by MPAC. The two properties are vacant land lots, also waterfront properties sold for time adjusted range of $1,386,171 and $1,499,428, or a range of $13,862 and $15,146 per linear foot of water. The four comparable properties sold for time adjusted values ranging from $13,862 and $25,134 per linear foot of waterfront. The median sale per linear foot of water is $18,967, a value considerably higher than the subject property’s assessment at $2,191,000 or $11,236 per linear foot of water frontage.

22The Board determines the current value of the subject property to be $2,191,000.

Equity

23Section 44.(3)(b) mandates and directs that after determining current value, the Board shall have reference to the value at which similar lands in the vicinity are assessed. The Assessment to Sale Ratio (“ASR”) is a tool often used to determine if an equity adjustment is required. An ASR is determined by dividing the assessment as returned with the time adjusted sale price. An ASR falling below 1.0 is an indication that MPAC’s valuation methodology may be resulting in assessments below values determined in the market place. Conversely, an ASR falling above 1.0 is an indication that MPAC’s valuation methodology may be resulting in assessments above values determined in the market place.

24Mr. Baranowski presented various Board decisions which granted reductions based on equity calculated on a small sample, or on the few comparable properties used on those case. He argued that based on those cases this panel should entertain a reduction of about 8%. This panel points out that the Board is not bound by decisions previously delivered.

25In this case the Board has a larger sample to rely upon. MPAC relied on the sales of 30 properties, all within 0.59 kilometres of the subject property, to determine whether properties are assessed at or close to their current values, as listed in the Equity analysis of Exhibit 1. The median ASR for the sold properties is 0.95, which is within MPAC’s acceptable range of ASRs between 0.95 -1.05. This result satisfies the Board that generally speaking, MPAC’s valuation methodology is achieving values similar to those determined in the marketplace and no further equitable adjustment is warranted.

CONCLUSION

26The Board determines the current value of subject property to be $2,191,000, and finds that there is not enough evidence to adjust for equity with similar lands in the vicinity. The Board confirms the assessment of the subject property for the 2012 taxation year.