Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE:

December 09, 2016

FILE NO.:

WR 144142

Assessed Person(s):

J & S Holdings Inc.

Appellant(s):

J & S Holdings Inc. and Gary Mayers

Respondent(s):

Municipal Property Assessment Corporation (“MPAC”) Region 23

Respondent(s):

City of London

Property Location(s):

29 Adelaide Street South

Municipality(ies):

City of London

Roll Number(s):

3936-050-330-04800-0000

Appeal Number(s):

3180663

Taxation Year(s):

2016

Hearing Event No.:

629169

Legislative Authority:

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

Heard:

November 21, 2016 in London, Ontario

APPEARANCES:

Parties

Representative

J & S Holdings Inc. and Gary Mayers

Gary Mayers

MPAC

Josh Morgan

City of London

No one appeared

DECISION OF THE BOARD DELIVERED BY DAN WEAGANT

INTRODUCTION

1The subject property is a single-storey dwelling, with 972 square feet (“sq. ft.”) of living area and a 972 sq. ft. unfinished basement. It was built in 1910 and is located on a lot of 4,600 sq. ft., with 40 feet (“ft.”) of frontage on Adelaide Street South. The property lies on the west side of the street. The exterior of the building is finished with siding, and has a front porch with a ramp that connects the porch to the driveway accessing the public street. The subject property underwent a minor renovation of undetermined scope in 1983.

2For the 2016 taxation year, MPAC returned a current value assessment (“CVA”) of $124,000. J & S Holdings Inc. (the “Appellant”) believes this assessment is too high and that the correct assessment should be approximately $82,000; the same amount paid for the subject property in 2015.

3The Assessment Review Board (the “Board”) must determine two things in this appeal. First, the Board must decide, based on the evidence of the parties, the current value of the subject property. Secondly, the Board must decide if, when reference is made to assessments of similar properties in the vicinity, the current value found should be reduced for that value to be equitable.

DECISION

[4] The Board finds that the current value of the subject property is $102,000 and 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.

5Accordingly, the assessment of the subject property at 29 Adelaide Street South is reduced from $124,000 to $102,000 in the Residential Property Class.

LEGISLATION

6In making its determination of these appeals, the Board must consider the relevant sections of the Assessment Act (“Act”).

7Section 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.

8Section 19.(1) of the Act states:

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

9Section 40.(1) 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.

10Section 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.

The Board’s Analysis

Current Value

11To support their respective positions, both parties submitted a total of seven comparable properties that sold in the neighbourhood between September 2010 and April 2013. Two of these properties were cited by both parties. All of these properties are located on Adelaide Street North or South, in proximity to the subject property.

12Of the seven properties, two of them had sale dates in April 2013. There was no evidence to support a time adjustment for these two sales. MPAC provided a table of Time Adjustment Factors (“TAF”) to be applied to sales in the ‘shoulder’ years of 2011 and 2012, within 12 months of the statutory valuation date of January 1, 2012. The use of TAFs allows the comparison of sales that occurred before or after the valuation date, as though they occurred on that date. This is helpful to the Board in making its determination of current value. Sale dates outside of the range of TAFs in evidence are therefore less reliable for comparison, and for this reason, the Board disregards MPAC’s Sales C and D which sold in 2013. In addition, and for the same reason, the Board disregards the Appellant’s Sale 2, which has a sale date in 2010; prior to the range of TAFs in evidence.

13The Board is left with four properties to consider in determining the current value of the subject property. For properties to be used of comparison, they need not be identical. They only need to be sufficiently similar to the subject property so that reasonable adjustments can be made between the subject property and the comparables to arrive at a current value for the subject property.

14The Board considers the resultant four properties to be suitably comparable. The characteristics of the four properties are summarized below in Table A.

TABLE A

Subject Property – 29 Adelaide St. S.

Sale A/Sale 1 – 215 Adelaide Street N.

Sale B - 6 Adelaide Street S.

Sale E/Sale 4 – 102 Adelaide Street S.

Sale 3 – 16 Adelaide Street S.

Year Built

1910

1880

1900

1931

1948

Living Area (sq. ft.)

972

834

1,392

1,026

1,110

Land Area (sq. ft.)

4,600

3,920

5,000

4,760

5,000

TAS Value

N/A

$86,563

$140,268

$139,197

$117,306

Assessment

$124,000

$95,000

$148,000

$137,000

$133,000

ASR

N/A

1.10

1.06

.98

1.13

15The comparison illustrates two important things. Firstly, when compared to Sale A, the subject property is newer, has a larger living area and a larger land area. This reasonably indicates that the subject property should have a higher current value than Sale A. Secondly, when compared to Sales E/4 and 3, the subject property is older, has a smaller living area and a smaller land area. This indicates reasonably that the subject property should have a current value that is lower than these two properties.

16The building at Sale B is considerably larger than the subject property and is closer in age, indicating that the current value of Sale B should also be higher than that of the subject property.

17This brief analysis indicates a reasonable range of value that could be applied to the subject property of between $86,563 and $117,306. The value returned by MPAC is higher than the range indicated and the value suggested by the Appellant is below this range. In order to further refine the range, the Board finds that the best evidence is the living area per sq. ft. values of the comparable properties. The comparables are all in the same neighbourhood, with the same basic characteristics, including the adjustment made by MPAC for frontage on an extremely busy street. The per sq. ft. Time Adjusted Sales (“TAS”) value of the four comparable properties considered by the Board are as follows:

• Sale A / 1 - $103.79

• Sale B – $100.77

• Sale E / 4 - $135.67

• Sale 3 – $105.68

18The median per square feet value of the TAS of these four properties is $104.74. When applied to the subject property’s square footage of 972, the result is $101,808 or $102,000, rounded. The Board finds this to be the best evidence of current value for the subject property.

Equity with Similar Lands in the Vicinity

19MPAC submitted an equity study to demonstrate the trend of assessments as they relate sale prices of similar properties in the vicinity. Their study indicates a median Assessment to Sale Ratio (“ASR”) from among thirty such properties of 0.99, indicating that assessments are generally very close to sale values for residential properties. The Board notes as well, that the ASRs of the four properties in evidence range from 0.98 to 1.13, with a median of 1.08, indicating that assessments are generally at or slightly higher than sale values. The Board finds that the evidence does not support a finding of inequity or 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

20The Board finds that the current value of the subject property is $102,000.and 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.

21Accordingly, the assessment of the property at 29 Adelaide Street South is reduced from $124,000 to $102,000 in the Residential Property Class.