Timm v. Municipal Property Assessment Corporation, 2016 CanLII 67441

Assessment Review Board

ISSUE DATE: October 07, 2016 FILE NO.: WR 142243

Assessed Person(s): Ministry of Natural Resources and Forestry Appellant(s): Sarah Timm Respondent(s): Municipal Property Assessment Corporation ("MPAC") Region 28, The Municipality of West Nipissing

Property Location(s): WSGP-86 Municipality(ies): The Municipality of West Nipissing Roll Number(s): 4852-040-003-04200-0000 Appeal Number(s): 3045415, 3093182 and 3160152 Taxation Year(s): 2014, 2015 and 2016 Hearing Event No.: 635056

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

Heard: August 2, 2016 in Sturgeon Falls, Ontario

APPEARANCES:

Parties	Representative
Ministry of Natural Resources and Forestry, Sarah Timm	Sarah Timm
MPAC	John Hyatt
The Municipality of West Nipissing	No one appeared

DECISION OF THE BOARD DELIVERED BY MARCELLE BOURASSA

INTRODUCTION

1The property is a Seasonal/Recreational Dwelling – First Tier on Water, located on the mainland but with water access, in the Cache Bay Wetland Conservation Reserve (the "Reserve"), in West Nipissing. It is Crown land owned by the Ministry of Natural Resources and Forestry ("MNRF"). Ms. Timm has a land use permit granted by the MNRF which is transferable. There have been no owners outside of her family. Transfers are recorded at the MNRF.

2The single storey cottage, built in 1940, has 198 square feet ("sq. ft.") of total building area. The total lot size is 43,560 sq. ft. or one acre. There is no water, hydro, insulation or any other services. Ms. Timm calls it her one room duck shack or hunt camp that is used for 2-8 days during the fall duck hunting season when accessed via water from Cache Bay and about two weekends every winter when accessed by snowmobile. The interior remains unchanged. The exterior has been recovered with a better product to withstand the weather and the windows have been replaced. There is a dock and water depth is 5 feet, at the best of times. The shoreline is rocky and the bottom is mucky and weedy. Water drawn from the lake to wash dishes must be boiled.

3John Hyatt, representing MPAC, states that there is recommended assessment of $45,000 for the 2014, 2015 and 2016 taxation years. The property was last inspected in 2014. A variable has been applied for weeds.

4Mr. Hyatt stated that MPAC assessed the current value of the property using the direct sales comparison approach and provided information on the sales of four properties. He noted that it was hard to find sales of similar properties and looked for sales with smaller structures or in the vicinity of the subject property. The sales information provided to the Assessment Review Board ("Board") included key features of these properties, in order to compare them with the subject property. The actual sale price of each property was listed, along with a time-adjusted price (except for Sale B as it's sale occurred in 2013) showing the likely value of those properties on the valuation date of January 1, 2012. He considers Sale B to be superior to the subject property; Sale C is similar in size but in a superior location; Sale D is similar in structure but located in a superior location. He is of the opinion that the current value of the subject property falls within the range of sales and the adjusted sale prices of the sales demonstrate that the value of $45,000 for the subject property is reasonable and is therefore correct. Mr. Hyatt also submitted an Equity Analysis (Exhibit 1) that considered 30 arm's length sales of residential properties within 6.33 kilometers of the subject property that took place between January 2008 and December 2012. They produced a median Assessment to Sales Ratio ("ASR") of 1.01, which is within the acceptable standard of 0.95 to 1.05 required to establish that properties have been assessed at their current value.

5Ms. Timm takes the position that the assessment of the subject property is too high and should be more fairly assessed at $10,280.

6Her property is fully contained within the Reserve. Any development will be greatly limited and totally at the discretion of the MNRF. Also, the property cannot be sold as it is Crown land. It is a lease and the value of the structure and property should be determined accordingly. She has a limited pool of buyers for her lease. Ms. Timm stated that her father attempted to sell it during the period of 2005-2010 but no one would pay more than $10,000.

7She referenced five nearby properties on or near Goulais Point (Exhibit 2), all privately owned. Property 1 is a managed forest property located on 54.3 acres improved with a seasonal dwelling built in 2010. It is assessed at $227,000. Property 2 is a managed forest property and has 31.63 acres of vacant land and is assessed at $23,000. Property 3 consists of 87 acres of land improved with a seasonal recreational dwelling built in 1991. It is assessed at $216,000. Property 4 is a 1.7 acre island improved with a seasonal recreational dwelling built in 1948. It is assessed at $132,000. As per Ms. Timm it is all marsh land and looks attached. Property 5 is a 1.3 acre island improved with a seasonal recreational dwelling built in 2009. It is assessed at $310,000. Using Property 2 as a reference, she explained how she estimated the value for her land at $2,000.

8She has compared her property to four properties, two in Parry Sounds District (four hours south) and two on Wasi Lake (one hour west). In general, the two properties on Wasi Lake were only valued at $20,000 to $33,000 more than the subject property and have year round road access, are much newer and larger, have hydro and heat. She took the average of the values of the two properties on Wasi Lake for an average value of $77,000 with an average age of 1968 and an average square footage of 548. Through her research, she determined that a piece of vacant land on Wasi Lake is presently valued at an average of $55,500, based on two referenced properties. She calculated a resulting value for the subject property's structure of $23,000. In her opinion, since her hunt camp is 36% of the size of the Wasi Lake cottages, it should be valued at 36% of $23,000 or $8,280.

9This appeal raises two issues: does the recommended assessment of $45,000 reflect the current value of the land; and should the assessment be adjusted to make it equitable with the assessments of similar lands in the vicinity.

DECISION

10For the reasons stated below and as directed by s. 44.(3)(a) of the Assessment Act (the "Act"), the Board sets the current value of the property, as of the valuation day of January 1, 2012, at $45,000 and finds that it does not require a further adjustment under s. 44.(3)(b) of the Act in order to make it equitable with similar lands in the vicinity.

Accordingly, for the 2014 taxation year, the assessment is reduced from $51,000 to $45,000 and for the 2015 and 2016 taxation years, the assessment is confirmed at $45,000.

REASONS FOR DECISION

The Legislation

11Pursuant to s. 18(1) of the Act, "the tenant of land owned by the Crown where rent or any valuable consideration is paid in respect of the land" is assessable in the same way as if the land were owned by the subject as a private citizen. The tenant of Crown lands as a consequence of s. 18(1) is entitled to classification as an assessed person under s. 17(1); to receive Notice of Assessment under s. 31; to participate in the reconsideration process under s. 39.1(1), and to be placed on the assessment roll under s. 14(1) of the Act.

12The initial task for the Board is to determine the current value of the subject property as required by s. 44.(3)(a) of the Act.

13Section 19.(1) of the Act states that the assessment of the land shall be based on its current value. Current value is defined in s. 1 to mean, 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.

14Section 19.2(1)(3) of the Act provides that for the period consisting of the four taxation years from 2013 to 2016, land is valued as of January 1, 2012.

15In determining the value at which the land shall be assessed, s. 44.(3) of the Act requires that the Board (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.

16Section 40.(17) of the Act provides that, where value is the ground of appeal, the burden of proof as to the correctness of the current value of the land rests with the assessment corporation.

17After hearing the evidence and the submissions of the parties, the Board shall determine the matter pursuant to s. 40.(19).

The Board's Analysis

Current Value

18The initial task of the Board is to use the best evidence available to determine the current value of the property as required by s. 1 and s. 19.(1) and s. 44.(3)(a) of the Act.

19The best evidence the Board can receive of current value is an arm's length and market tested sale of the subject property on the valuation day or close to it. If, as in this case, no such transaction took place the next best measure of current value is arm's length and market tested sales of comparable properties located nearby, as close as possible to the valuation date of January 1, 2012. The measure acts as a benchmark and a gauge of the accuracy for the assessed value of the subject property and comparable properties.

20To enable an estimate of value for the subject property to be derived from suggested comparable properties there must be sufficient elements of similarity, in terms of physical factors such as building area, land area, land frontage, age of construction, physical condition, etc., so as to enable a direct comparison to be made between a suggested comparable property and the subject property.

21Ms. Timm did not present any sales comparable and based her proposed value on components of the assessments of selected properties. The Board acknowledges that she put a great deal of effort into her presentation. However, the Board prefers to determine the current value of the subject property based on the sales of comparable properties that occurred close to the January 1, 2012 valuation date.

22Mr. Hyatt referred to four sales:

• Sale A – Island WS13-1 has a lot size of 117,612 sq. ft. or 2.7 acres and was a vacant island at the time of sale. It sold in January 2012 and has a time adjusted sale price of $149,764 or $74,882 per acre. It is relatively close to the subject property but further away from Cache Bay. Like the subject, it appears to be included in the Reserve, according to the map included in Ms. Timm's materials (Exhibit 2). However, it is nearly three times the size of the subject property. The Board finds it to be superior to the subject property.
• Sale B – Island WS34-1 has a lot size of 58,806 sq. ft. or 1.35 acres. It is similar in terms of size to the subject property relatively. It is relatively close to the subject property but further away from Cache Bay on the open lake. Like the subject, it appears to be included in the Reserve, according to the map included in Ms. Timm's materials (Exhibit 2). It is superior to the subject property in that it improved with a 904 sq. ft. structure built in 1948 and renovated in 1990. It sold for $279,000 in October 2013, which is too far removed from the valuation date and will not be considered.
• Sale C – Island WL10-1 has a lot size of 34,848 sq. ft. or 0.8 acres which is smaller than the subject property and is improved with a structure similar in age of construction (1934) and size. Unlike the subject property it is not included in the Reserve, according to the map included in Ms. Timm's materials (Exhibit 2). It is located in a completely different part of Lake Nipissing, in the West Arm towards Monetville. It is also in a different homogeneous area. The property sold in August 2011 for a time adjusted sale of $147,090. The Board considers this property superior to the subject property.
• Sale D – WB210-1 has a lot size of 65,340 sq. ft. or 1.5 acres and is improved with a slightly larger and newer structure built in 1955. It is located near Sandy Island in a superior location on Lake Nipissing. It is also in a different homogeneous area. The property sold in August 2011 for a time adjusted sale of $151,457.

23The Board notes from the materials included in Ms. Timm's submission (Exhibit 2) that the Reserve encompasses a provincially significant wetland which provides a crucial habitat for a variety of wildlife such as various duck and fish species. The site also provides many recreational opportunities including sport fishing, hunting and cranberry picking.

24Putting this all together, the Board is of the opinion that the current value for the subject property should be set at the recommended value of $45,000. Of the four sales in evidence, the Board finds Sale A to be most helpful even though it is a vacant island. It is relatively close to the subject property but further away from Cache Bay. Like the subject, it appears to be included in the Reserve, according to the map included in Ms. Timm's materials (Exhibit 2). However, it is nearly three times the size of the subject property and has a sale value per acre of $74,882 or $75,000 rounded. In the opinion of the Board, the subject property's current value should be below this value and sets it at $45,000.

Equity with Similar Lands in the Vicinity

25The Board must also consider the assessments of similar properties in the vicinity and determine whether the correct current value as established is inequitable relative to those assessments. If so, it should be adjusted to make it equitable, as required by s. 44.(3) of the Act.

26For purposes of establishing equity, properties do not need to be comparable, they need to be of a similar nature and within a reasonable proximity. The ASR from a reasonable sample of sold properties is usually the best indicator for that purpose. Mr. Hyatt also submitted an Equity Analysis (Exhibit 1) that considered 30 arm's length sales of residential properties within 6.33 kilometers of the subject property that took place between January 2008 and December 2012. They produced a median ASR of 1.01, which is within the generally accepted range of 0.95 to 1.05 required to establish that properties have been assessed at their current value.

27The Board has also had reference to the assessed values of five nearby properties on or near Goulais Point (Exhibit 2) as referred to by Ms. Timm. Unlike the subject property, none of these properties are on Crown land or none appear to be fully contained in the Reserve based on a review of the map included in Ms. Timm's materials (Exhibit 2). Property 1 is a managed forest property located on 54.3 acres improved with a 1,333 sq. ft. seasonal dwelling built in 2010 that is both larger and newer. It is assessed at $227,000 and is a superior property. Property 3 consists of 87 acres of land improved with a 1,185 sq. ft. seasonal recreational dwelling built in 1991. Property 4 is a 1.7 acre island improved with a seasonal recreational 758 sq. ft. dwelling built in 1948 that is both larger and newer. It is the closest to the subject property. According to Ms. Timm, it is all marsh land and looks attached. It is assessed at $132,000 and is a superior property. Property 5 is a 1.3 acre island improved with a 1,553 sq. ft. seasonal recreational dwelling built in 2009 which is both larger and newer. It is assessed at $310,000 and is a superior property. Property 2 is a managed forest property and has 31.63 acres of vacant land and is assessed at $23,000. It is not possible to determine based on the evidence before the Board how much is included in the managed forest property class which is also taxed at a different rate. The subject property's current value as determined above is below the range of assessed values of four properties in the immediate vicinity and that it is equitable relative to them. The Board concludes that no adjustment for equity is warranted.

CONCLUSION

28The Board sets the current value of the subject property, as of the valuation day of January 1, 2012, at $45,000.

29The evidence does not support the conclusion that the current value of the property as determined above requires an equity reduction.