Griffith v. Municipal Property Assessment Corporation, 2016 CanLII 65527

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE:

September 27, 2017

FILE NO.:

WR 141747

Assessed Person(s):

Steven Scott Griffith and Dawn Marie Griffith

Appellant(s):

Steven Scott Griffith and Dawn Marie Griffith

Respondent(s):

Municipal Property Assessment Corporation (“MPAC”) Region 31

Respondent(s):

Municipality of Huron Shores

Property Location(s):

145 Basswood Lake Road

Municipality(ies):

Municipality of Huron Shores

Roll Number(s):

5724-000-008-33400-0000

Appeal Number(s):

3102936, 3102937 and 3160586

Taxation Year(s):

2014, 2015 and 2016

Hearing Event No.

633175

Legislative Authority:

Section 34 and Section 40 of the Assessment Act, R.S.O. 1990, c. A.31, as amended

Heard:

July 12, 2106 in Iron Bridge, Ontario

APPEARANCES:

Parties

Representative

Steven Scott Griffith and Dawn Marie Griffith

Self-represented

MPAC

Antonietta Romano-Bitonti

Municipality of Huron Shores

Deborah Tonelli

DECISION OF THE BOARD DELIVERED BY DAN WEAGANT

INTRODUCTION

1The subject property is a single-family dwelling, located on the shore of Birch Lake. The Birch Lake shoreline is partially sandy and partially weedy along the 2700 feet of frontage. The site comprises a lot area of 70 acres and is divided by a natural gas easement and an adjacent road allowance which is maintained year-round. The property is improved with a single-storey, 1334 square foot (“sq. ft.”) dwelling with a 1,369 sq. ft. walkout basement. It has two bedrooms, one full bathroom and was constructed in 2014.

2In 2014, MPAC issued a supplementary assessment notice under s. 34 of the Assessment Act (“Act”) to reflect the additional value represented by the newly constructed dwelling. This supplementary assessment added a value of $223,000 (subsequently reduced to $220,000) to the existing 2014 current value assessment (“CVA”) of $164,000 which reflected the value of the previous dwelling and the land portion of the property. Steven Scott Griffith and Dawn Marie Griffith filed a request for reconsideration on both the 2014 s. 34 supplementary assessment and the resultant 2015 CVA which totaled $384,000.

3In response to the Appellant’s request, MPAC undertook a property inspection which resulted in a review of the new dwelling and adjustments were made to the CVA. The original supplementary value was reduced to $142,000, leading to a total CVA, effective September 1, 2014 of $306,000. The Appellants rejected the revised CVA and filed appeals on both the September 2014 supplementary assessment and the 2015 CVA. The 2015 taxation year appeal was deemed for 2016 with the assessment of $306,000 prior to the hearing.

4The Appellants believe the assessment is too high and that in comparison with other properties on Birch Lake, the correct assessment should be approximately $260,000, including the supplementary assessment applied by MPAC in 2014.

5The Assessment Review Board (the “Board”) must determine three things in these appeals. Firstly, the Board must decide on the current value of the subject property for the 2015 and 2016 taxation years. Once the Board has made the decision on current value, the Board must also make a determination of the value of the supplementary assessment made by MPAC commencing September 1, 2014. Having reference to the assessment of similar properties in the vicinity, the Board must decide if the current value determined should be reduced to make the assessment of the subject property equitable.

DECISION

6The Board finds that the current value of the subject property at 145 Basswood Lake Road is $306,000. The Board also finds that, when consideration is made of the assessments of similar properties in the vicinity, this value is reduced to $249,000.

7Accordingly, the assessment of the subject property is reduced, from $384,000 to $249,000 for the 2015 taxation year. The assessment of the subject property is reduced, from $306,000 to $249,000 for the 2016 taxation year. The supplementary assessment applied to the subject property, effective September 1, 2014 is reduced from $223,000 to $85,000.

LEGISLATION

8In making its determination of these appeals, the Board must consider the relevant sections of the Act.

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.

10Section 19.(1) of the Act states:

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

11Section 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.

12Section 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

13Ms. Romano-Bitonti prepared a valuation report, to support the CVA determined for the subject property. She made her determination based on the direct sales comparison approach whereby sales of other properties in the area are used to develop a range of value for the subject property. Ms. Romano-Bitonti looked at five comparable properties that sold between April 2008 and April 2012. The sale value of each was adjusted to reflect changes in sale value over time. Each sale value was adjusted to reflect a comparable value as though the sale occurred on January 1, 2012, the valuation date stipulated in the Act for the taxation years under appeal. The time adjusted sale (“TAS”) values were determined from a large sample of 480 sales in the area over the timeframe of January 1, 2008 to September 2012.

14The five comparable sales have lake-frontage ranging from 210 feet to 1,782 feet (all less than the subject property) with land areas ranging from 0.96 acres to 153.50 acres. Living areas of the five comparables range from 888 sq. ft. to 1,669 sq. ft. while the subject property has a main floor area of 1,334 sq. ft.

15Ms. Romano-Bitonti considers both Sales A and C at 92 Ingram Road and 334 Melwell Road, respectively to be relatively comparable to the subject property. She considers Sale B at 44 Windmill Road to be superior in value to the subject property.

16Sale A fronts onto the nearby Cranberry Lake which is similar in nature to Birch Lake where the subject property lies. The Sale A dwelling is smaller and older than the subject dwelling and has a larger land area, but a shorter lake frontage. The TAS value of Sale A is $271,968. The Sale C dwelling has a very similar living area, much smaller lot and a shoreline without a weedy / algae modifier on the shoreline. The TAS value of Sale C is $277,306.

17Sale B is located on Birch Lake and has a larger dwelling and by MPAC’s description, a lake frontage without a weedy / algae modifier. The Sale B dwelling is older than the subject dwelling, has a shorter lake frontage and a lot area just over twice the size of that of the subject property. The TAS value of Sale B is $413,864.

18The remaining comparable properties in Ms. Romano-Bitonti’s analysis are considered to be inferior in value when compared to the subject property, with TAS values of $232,137 (Sale D) and $192,662 (Sale E).

19By these comparisons, Ms. Romano-Bitonti believes the value of the subject property should fall within the range defined by Sale A and Sale B and considers the recommended value of $306,000 to be reasonable and correct.

20Ms. Romano-Bitonti did not submit a position on equity of assessment.

APPELLANTS’ EVIDENCE

21The Griffiths submitted two exhibits to support their view of the current value of their property. The first is a summary of five properties in the vicinity; four of which are on Basswood Lake, with the fifth on Windmill Road (the same as MPAC’s Sale B). They did not submit any sales evidence on these five properties, but they did provide their respective CVAs, ranging from $107,000 to $307,000.

22In addition, the Griffiths provided a map of the subject property, illustrating the location of an easement which bisects the property and follows Basswood Lake Road which also bisects the property. The Griffiths believe that the presence of the easement should be taken into account when determining the property’s current value.

23The Griffiths’ submission of CVAs of the five properties in their similar property summary indicates a wide range of assessment in the vicinity. They believe further that this comparison shows that a current value of the subject property of $306,000 is at the very high range of similar properties in the vicinity, and when this is compared directly to the CVA of 44 Windmill Road (MPAC’s Sale B) at $307,000 the comparison is not fair, as 44 Windmill Road has a demonstrated TAS value of over $413,000 which is far higher than any value demonstrated by MPAC.

ANALYSIS

24The best indicator of current value for any property under appeal is a sale of that property on or near the valuation date stipulated for the applicable taxation year. Where no such sale exists, the Courts have told us that a reasonable current value can be determined by comparing the subject property to comparable properties that have sold in proximity to the applicable valuation date.

25MPAC found that the current value of the subject property should lie somewhere between $271,698 and $413,864, the TAS values of Sales A and B respectively. On the strength of her detailed property inspection, Ms. Romano-Bitonti determined the current value assessment to be $306,000, which lies within the range determined by the comparison of five sales in the area. The Board finds that the best evidence of the current value of the subject property is the CVA determined by MPAC and finds the current value to be $306,000.

26The Griffiths’ case is essentially one of an argument for equity of assessment. They did not seek to refute the findings of MPAC with respect to current value, but accept that those values are simply higher than assessed values of the same properties. They submitted that the assessments of similar properties in the vicinity indicate that sale values are regularly higher than assessment values and their property should be given the same measure of farness.

27The Board disregards the Appellants’ evidence related to the easement that crosses the property. There is no evidence before the Board as to what the impact of such an easement would be on the value of the property. Further, the Griffiths indicated in their testimony that very little use of the property away from the lake front is made and that the only real purpose of the back area is to gain access to Crown Land, which access is used infrequently.

28The Appellants’ evidence of the assessments of properties in the vicinity only goes part way to answering the question of equity and whether or not the current value determined should be reduced for that purpose. However, there is in evidence, the sales of the five properties used by MPAC along with their 2012 CVAs, present within MPAC’s Appendix B – ‘Sales for Price Changes Over Time’. The following is a summary of the TAS values of these five sales and their respective CVAs:

Sale

2012 CVA

TAS Value

ASR

Sale A

$237,000

$271,968

.871

Sale B

$307,000

$413,864

.742

Sale C

$249,000

$277,000

.898

Sale D

$181,000

$232,137

.780

Sale E

$157,000

$192,662

.815

29Assessment to Sale Ratio (“ASR”) is a means by which a determination can be made as to the relationship between what a property is assessed at, and its TAS price. The median ASR of the five comparable properties in evidence is .815, indicating that properties in the vicinity are regularly assessed at a rate below their TAS price or current value.

30The Board finds that the best evidence of equity of assessment is the ASR summary of the five comparable properties used by MPAC for its determination of current value. The Median ASR of .815 is therefore applied to the current value determined above, of $306,000 for a reduced value of $249,390 ($249,000, rounded). The Board notes that this assessment is very close to the assessments of Sales A and C, the two properties that Ms. Romano-Bitonti considers to be relatively comparable to the subject property, and finds this lower assessment to be reasonable as a result.

31Having determined the assessment of the subject property for the 2015 and 2016 taxation years, the Board turns to the question of the value of the supplementary assessment applied by MPAC, effective September 1, 2014. The assessment of the subject property, before the supplementary assessment was applied was $164,000. As a result, the Board finds that the value of the supplementary assessment is $85,000.

CONCLUSION

32The Board finds that the current value of the subject property at 145 Basswood Lake Road is $306,000. The Board also finds that, when consideration is made of the assessments of similar properties in the vicinity, this value is reduced to $249,000.

33Accordingly, the assessment of the subject property is reduced, from $384,000 to $249,000 for the 2015 taxation year. The assessment of the subject property is reduced, from $306,000 to $249,000 for the 2016 taxation year. The supplementary assessment applied to the subject property, effective September 1, 2014 is reduced from $223,000 to $85,000.