Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: October 05, 2016 FILE NO.: WR 141942

Assessed Person(s): Randall Pratt Moggach and Candice Joanne Moggach Appellant(s): Randall Moggach Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 28 Respondent(s): City of North Bay

Property Location(s): 10 Gregory Drive Municipality(ies): City of North Bay Roll Number(s): 4844-050-066-06708-0000 Appeal Number(s): 3133327 and 3160107 Taxation Year(s): 2015 and 2016 Hearing Event No. 635057

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

Heard: August 03, 2016 in North Bay, Ontario

APPEARANCES:

Parties	Representative
Randall Moggach	Self-represented
MPAC	Blair Adams
City of North Bay	Lisa Beaulieu

DECISION OF THE BOARD DELIVERED BY MARCELLE BOURASSA

INTRODUCTION

1The property is a Single Family Detached (Not on Water), located at 10 Gregory Drive, in the City of North Bay. It is located in an Estate Lot Sub-Division (the “Gregory Sub-Division”), along Highway 11 North. The Gregory Sub-Division has 12 Estate lots. The lot is improved with a 3,222 square foot, two-storey building, built in 1987. It has forced air heating, four bedrooms and two, one-half bathrooms. It has a 1,162 square foot attached garage and a detached garage built in 2009 consisting of 1,145 square feet. The property abuts a nuisance and receives a negative 5% adjustment.

2The assessment was returned at $499,000 for the 2015 taxation year and at $475,000 the 2016 taxation year.

3Blair Adams, representing the Municipal Property Assessment Corporation (“MPAC”), assessed the current value of the property using the direct sales comparison approach and provided information on four sales of properties in the Gregory Sub-Division (Exhibit 1). The sales information provided to the Assessment Review Board (the “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 the second sale at 8 Gregory Drive that occurred in 2013) for the sale showing the likely value of those properties on the valuation date of January 1, 2012. The sales comparables share similarities with the subject property but also some differences. He opined that the main difference between the subject property and the other comparables lies in the size of the outbuildings. He stated that the detached garage constructed in 2009 is valued at $76,126. He is of the opinion that a current value assessment of $475,000 is reasonable.

4Randall Moggach is of the opinion that his property is still assessed too high and should be more reasonably assessed at $460,000. He noted that the dwelling has air conditioning. He referenced the assessments for neighboring properties in his document (Exhibit 2). It was noted however, that his latest information as received in August 2016, references 2016 current value assessments. He stated that the sales prices for 8, 9 and 11 Gregory Drive are well below their respective market value assessments. He also referenced a number of concerns including the high value placed on the detached garage as it cost $35,000 to build, the lack of residential development on the East side of Highway 11 North, the promotion of commercialization and future developments including the Trans Canada Pipeline, quarries that are becoming more active, Marsh Drive which is slated to become the main entrance to the airport, increased truck traffic on Highway 11 North and a by-law change that designates their area as rural-residential.

5This appeal raises two issues: does the revised assessment of $475,000 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

6For the reasons stated below and as directed by s. 44(3)(a) of the Assessment Act (“Act”), the Board finds the current value of the subject property, as of the valuation day of January 1, 2012, to be $461,000 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.

7Accordingly, the assessment of the subject property is reduced from $499,000 to $461,000 for the 2015 taxation year and from $475,000 to $461,000 for the 2016 taxation year.

REASONS FOR DECISION

The Legislation

8The 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.

9Section 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.

10Section 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.

11In 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.

12Section 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.

13After 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

14The 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.

15The 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 benchmark and a gauge of the accuracy for the assessed value of the subject property and comparable properties.

16To 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.

17The Board has four sales to consider that are all located in the Gregory Sub-Division 8.

18Sales A and B – 8 Gregory Drive is a two-storey dwelling built in 1988. It is of the same quality class and the lot size is identical to that of the subject property. It has hot water heating, three bedrooms and three full bathrooms. It is 942 square feet smaller than the subject property at 2,280 square feet and has an attached garage that at 588 square feet is about half the size of the subject property’s attached garage. It also has a finished basement whereas the subject property does not. It does not have a detached garage. There are two sales on the property: a time adjusted sale of $362,029 for the sale that occurred in May 2011. The second sale occurred in September 2013 for $290,000. There is no time adjusted sale for the second sale and the Board will not consider it. Mr. Adams noted that water damage occurred sometime after the first sale and that the second sale reflects the condition of the property after the water damage had occurred. He considers this property as inferior to the subject property. The assessment was returned at $374,000.

19Sale C – 11 Gregory Drive is a raised bungalow built in 1986. It is of the same quality class and the lot size is identical to that of the subject property. It has forced electrical heating, five bedrooms and three, one-half bathrooms. It is slightly smaller than the subject property at 3,133 square feet and has an attached garage that at 600 square feet is about half the size of the subject property’s attached garage. It also has 2,152 square feet of finished basement area whereas the subject property does not. It does not have a detached garage. Mr. Adams noted that a new garage was constructed, a pool installed and renovations carried out after the 2011 sale. The time adjusted sale price is $413,581. Mr. Adams considers this property as inferior to the subject property due to the outbuildings. The assessment was returned at $514,000. The property also abuts a nuisance and receives a negative 5% adjustment.

20Sale D – 9 Gregory Drive is a two-storey dwelling built in 1981. It is of the same quality class and has a lot size that is slightly larger than the subject property. It underwent interior renovations in 2006 and has an effective year built of 1989. It has electrical heating, five bedrooms and two full and two, one-half bathrooms. It is 123 square feet smaller than the subject property at 3,099 square feet and has an attached garage that at 492 square feet is about half the size of the subject property’s attached garage. It also has 735 square feet of finished basement area whereas the subject property does not. It does not have a detached garage. There is a time adjusted sale of $393,144 for the sale that occurred in November 2009. Mr. Adams considers this property as inferior to the subject property due to the outbuildings. The assessment was returned at $404,000.

21Mr. Adams maintains that the suggested comparables are fairly similar albeit with some differences. He is of the opinion that the main difference lies in the size of the subject property’s outbuildings in comparison to the other comparables. He explained that a standard value per square foot of $65.51 was applied to the detached structure constructed in 2009 and valued at $76,126. In his opinion, this explains the differences in assessed values between the subject property and the suggested comparables. He considers Sale D to be the most comparable property to the subject property. In accounting for the outbuildings, he is of the opinion that a current value assessment of $475,000 is reasonable.

22The Board finds that the subject property shares some similarities with the suggested sales comparables in terms of location as all are located in the Gregory Sub- Division on three acre lots (Sale D has a slightly larger lot). The subject property is fairly comparable in terms of total building size to Sales C and D but about 30% larger than Sale A/B. The subject property is also similar in age to Sales A/B and C. However, Sale D, built in 1981, underwent renovations in 2006 whereas the subject property is in its original condition. The subject property does not have a finished basement area whereas Sales A/B, C and D.do. Sale C, the raised bungalow, has 2,152 square feet of finished basement area in addition to 3,133 square feet of building area on the first floor. In terms of property types, the subject property and Sales A/B and D are two two-storey dwellings whereas Sale C is a raised bungalow. Also, the subject property has forced air whereas Sales C and D use electric baseboard heat. The subject property also differs from all of the sales comparables in that it has a 1,145 square foot detached garage to which a substantial assessed value is assigned by MPAC whereas they do not. Also, the subject property’s attached garage is approximately 50% larger than Sales A/B, C and D’s respective attached garages. Lastly, only Sale C, like the subject property, abuts a nuisance and receives a negative adjustment. In light of the foregoing, the Board finds that Sales A/B, C and D are not sufficiently comparable to enable a direct comparison between them and the subject property for purposes of determining current value.

23Section 44.(3) of the Act does not direct the Board in the approach to take in determining the current value of the subject property. The Board finds that in this particular instance, an ASR analysis best fits the evidence before the Board. The Board must work with the evidence before it and the evidence indicates that Sales B, C and D, which are all located nearby, are all assessed higher than their respective time adjusted sale values. To discern a trend in the relation between sale values and assessed values requires an average and/or median Assessment to Sale Ratio (“ASR”) to be derived from many properties. These three properties represent 25% of the Estate lots in the Gregory Sub Division. They show a range of ASRs for the time adjusted sales of 1.02, 1.03 and 1.24, with a median ASR of 1.03. Applying the median ASR of 1.03 to the subject property results in a current value of $461,165 or $461,000 (rounded).

24The Board has also considered the ASRs over a larger area. Mr. Adams’ Valuation Report (Exhibit 1) includes the ASRs for sales of 30 residential properties within 3.42 kilometers of the subject property that took place between January 2009 and January 1, 2012. They produced a median ASR of 1.01. The Board notes, however, that 15 of the 30 sales (that included Sales A/B, C and D) had ASRs that ranged from 1.03 to 1.38. Of these 15 sales, 13 had ASRs between 1.08 and 1.38. The ASRs for properties over a larger area would also support an adjustment to the current value.

25Lastly, the Board also accepts Mr. Moggach’s evidence as to the detached garage’s construction cost which is less than MPAC’s value (which appears to be overstated) and, in the opinion of the Board, would also justify this minor reduction. Moggach also raised concerns regarding several nuisances. The Board notes that MPAC has addressed the abutting nuisance arising from proximity to a rock quarry. The Board has no evidence to quantify any additional perceived nuisances and, therefore, cannot give consideration to a further reduction.

Equity with Similar Lands in the Vicinity

26The 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.

27Mr. Adams submitted an Equity Analysis included as part of Exhibit 1 that considered 30 arm’s length sales of residential properties within 3.42 kilometers of the subject property that took place between January 2009 and January 1, 2012. The Board that finds that the evidence does not support the conclusion that the current value of the property as determined above requires an equity reduction in accordance with s. 44.(3)(b) of the Act.

CONCLUSION

28For the foregoing reasons and as directed by s. 44(3)(a) of the Act, the Board finds the current value of the subject property, as of the valuation day of January 1, 2012, to be $461,000 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.

29Accordingly, the assessment of the subject property is reduced from $499,000 to $461,000 for the 2015 taxation year and from $475,000 to $461,000 for the 2016 taxation year.