Jogender Dabas and Vaneeta Dabas v. Municipal Property Assessment Corporation, 2016 CanLII 90736

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: December 21, 2016

FILE NO.: WR 142792

Assessed Person(s): Jogender Dabas and Vaneeta Dabas

Appellant(s): Jogender Dabas and Vaneeta Dabas

Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 15

Respondent(s): City of Brampton

Property Location(s): 74 Quintette Close

Municipality(ies): City of Brampton

Roll Number(s): 2110-120-001-53164-0000

Appeal Number(s): 3171155, and 3171156

Taxation Year(s): 2015 and 2016

Hearing Event No. 637967

Legislative Authority: Sections 34 and 40 of the Assessment Act, R.S.O. 1990, c. A.31, as amended

Heard: September 13, 2016 in Brampton, Ontario

APPEARANCES:

Parties

Representative

Jogender Dabas and Vaneeta Dabas

Self-represented

MPAC

Olivia Medeiros

City of Brampton

Aida Karreman

DECISION OF THE BOARD DELIVERED BY DAN WEAGANT

INTRODUCTION

1The subject property is a single family dwelling located in the City of Brampton. It is comprised of 3,953 square feet (“sq. ft.”) of living area on two floors. The first floor includes 1,809 sq. ft. of living area and 609 sq. ft. attached garage. The second-storey comprises 2,144 sq. ft. of finished living area. The dwelling was constructed in 2015 and sits on a corner lot of 8,477 sq. ft. The exterior of the building is partially finished with stone veneer, with the remainder of the facades finished in brick. The subject property lies in a developing area of the City.

2At the beginning of 2015, MPAC returned a value of $312,000 which reflected the value of the land portion of the subject property, before the subject property building was constructed. Later in 2015, MPAC applied a supplementary assessment of $561,000, reflecting the value of the newly constructed dwelling, resulting in a total current value assessment (“CVA”) of $873,000, commencing September 1, 2015. For the 2016 taxation year, MPAC returned the same total value of $873,000, in the Residential Property Class.

3Jogender Dabas and Vaneeta Dabas (the “Appellants”) do not dispute the value of the returned property, prior to the application of the supplementary assessment. They also have no issue with the property’s classification or the effective date of the supplementary assessment. However, they believe that the supplementary assessment applied by MPAC for the 2015 taxation year and the CVA returned for the 2016 taxation year are too high.

4The Assessment Review Board (the “Board”) must decide two things in these appeals, firstly, the Board must determine, based on the evidence at the hearing, the current value of the supplementary assessment and the current value for the 2016 taxation year. Having reference to the assessments of similar properties in the vicinity, the Board must also determine if the current value found needs to be reduced for the purpose of equitable assessment.

DECISION

5The Board finds that the current value of the subject property is $815,000. The Board also finds that, for the purposes of equitable assessment, in accordance with s. 44.(3)(b) of the Act, the assessment is reduced to $754,000.

6Accordingly, the Board finds that the value of the supplementary assessment at 74 Quintette Close is reduced, from $561,000 to $442,000, commencing September 1, 2015. In addition, the assessment of the subject property, for the 2016 taxation year is reduced from $873,000 to $754,000 in the Residential property class.

LEGISLATION

7In making its determination of these appeals, the Board must consider the relevant sections of the Assessment Act (“Act”).

8Section 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.

9Section 19.(1) of the Act states:

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

10Section 34.(1) of the Act states:

34.(1) Supplementary assessments to be added to collector’s roll. – If, after notices of assessment have been given under section 31 and before the last day of the taxation year for which taxes are levied on the assessment referred to in the notices,

(a) an increase in value occurs which results from the erection, alteration, enlargement or improvement of any building, structure, machinery, equipment or fixture or any portion thereof that commences to be used for any purpose;

(b) land or a portion of land ceases,

(i) to be exempt from taxation,

(ii) to be farm lands the current value of which is determined in accordance with subsection 19 (5),

(iii) to be conservation land or managed forests land the current value of which is based on current use under subsection 19 (5.2),

(iii.1) to be land in the managed forests property class the current value of which is determined under subsection 19(5.2) or (5.2.1),

(iv) to be land the current value of which is based on current use under regulations made under subsection 19 (2), or

(v) to be classified in a subclass of real property;

(c) Repealed: 1997, c. 5, s. 22 (1).

(d) a pipeline increases in value because it ceases to be entitled to the reduction provided for in subsection 25(9),

the assessor may make the further assessment that may be necessary to reflect the change, and the clerk of the municipality upon notification thereof shall enter a supplementary assessment on the tax roll and the amount of taxes to be levied thereon shall be the amount of taxes that would have been levied for the portion of the taxation year left remaining after the change occurred if the assessment had been made in the usual way.

11Section 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) he 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) he classification of the person’s land or another person’s land is incorrect, or

(v) or 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

13Olivia Medeiros prepared a valuation study of the subject property that compared it with six other properties that sold between June 2011 and October 2012. In order to compare the sale values of the comparable properties to the subject property, Ms. Medeiros applied a Time Adjustment Factor (“TAF”) to each of the sale values. The TAF selected for each of the six sales was determined by a Time Adjustment study prepared for the purpose. The study considered 240 sales, in the residential property class, that took place between January 2011 and December 2012, covering the 12 months before and after January 1, 2012, the statutory valuation date stipulated in the Act for the 2015 and 2016 taxation years. The Time Adjusted Sale (“TAS”) values applied to each of the six comparable properties in her analysis allowed Ms. Medeiros to compare these sales as though they occurred on the valuation date. Ms. Medeiros stressed that the 240 sales used for this purpose were not used as a means for comparison to the subject property. They were only used to determine the amount by which sale values of the comparable properties in the study were adjusted for comparison. .A summary of the data for the six comparable properties appears in Table A.

TABLE A

	Subject Property	Sale A	Sale B	Sale C	Sale D	Sale E	Sale F
Lot Area (sq. ft.)	8,477	8,412	7,810	7,518	8,718	6,865	15,112
Living Area (sq. ft.)	3,953	3,837	4,147	4,004	3,636	3,768	3,768
Quality Rating	7.0	7.0	7.0	7.0	7.0	7.0	7.0
Sale Price ($)/Date	N/A	890,000/Oct 2012	837000/Nov 2011	775,000/Dec 2011	732,500 June 2011	821,700/Aug 2012	870,000/July 2011
TAS Price ($)		$832,260	$846,270	$777,840	$769,004	$779,031	$906,407
TAS/Sq. ft.($)		216.90	204.06	194.27	211.50	206.75	240.55
2012 CVA ($)	$873,000 ($815,000 recommended)	$770,000	$746,000	$750,000	$734,000	$703,000	$829,000
Year Built	2015	2004	2005	2005	2005	2004	2005

14All six of the comparable properties had sale dates within ten months of the valuation date. Ms. Medeiros testified that this tight time range makes the time adjustment values more reliable for comparison. In addition, she pointed out that the quality rating of 7.0 is the same for the subject property and the comparable properties. Ms. Medeiros also noted that the comparable dwellings in her analysis are 10 or 11 years older than the subject property, and it is reasonable to conclude that, all other things being equal, the current value of the subject property should be somewhat higher than the value indicated by the comparisons as a result.

15Ms. Medeiros concluded that given her analysis, and the range of value determined by her comparisons, the value recommended of $815,000 is reasonable and correct.

APPELLANTS’ EVIDENCE

16Jogender Dabas acknowledged the revised and recommended assessment presented by MPAC prior to the hearing. However, he still believes that the correct current value is approximately $668,000. He based this value on the original sale price from the builder, and applied an annual 5.22% reduction from that sale value, which took place in September 2015. He testified that he took this approach as MPAC’s evidence suggested that since the valuation date of January 1, 2012, prices for residential properties in the Brampton area have risen by 5.22 % annually. By applying this percentage to the sale price, Mr. Dabas arrived at the $688,000 figure in his analysis.

17Mr. Dabas also approached the valuation of his property by refuting the evidence of MPAC. He believes that the comparable properties used in Ms. Medeiros’s report are not suitably similar in nature to make a meaningful comparison with the subject property. He pointed out that some of the comparable properties had different exterior finishes and that some of the dimensions (land and building) differed between the six comparables in MPAC’s study and the subject property.

18To support his valuation of the subject property, Mr. Dabas submitted the details of six properties he suggested were sufficiently similar to provide a better idea of the value of the subject property. The summary of this data follows in Table B.

TABLE B

	Subject Property - 74 Quintette Close	Sale 1 - 70 Quintette Close	Sale 2 - 20 Vanhoof Cres	Sale 3 - 88 Bloomsbury	Sale 4 - 28 Valley Stream Circle	Sale 5 - 11 Littlewood Gate	Sale 6 - 63 Valley Creek Drive
Lot area (sq. ft.)	8,357	7,840	11,505	12,757	12,646	8,953
Living Area (sq. ft.)	3,953	3,495	3,843	4,069	4,419	3,990
Quality Rating	NA	6.5	6.5	6.5	6.5	6.5
Sale Price ($)/Date	984,279/Aug. 2015	735,000/Apr. 2015	795,000/Mar. 2013	1,057,000/Aug. 2015	1,068,000/Aug. 2013	765,000/Apr. 2012
TAS price ($)	NA	NA	NA	NA	NA	745,875
Sale / sq. ft. ($)	249.00	210.30	206.87	259.77	241.68	186.94
Year Built	2015	2015	2004	2004	2006	2006	2005

19Mr. Dabas submitted that all of the properties in evidence, including MPAC’s comparables and his own comparables, exist in fully developed areas and that an adjustment should be made to the value of the subject property for the ‘nuisance’ represented by the ongoing construction activities in the vicinity of Quintette Close. In addition, he testified that the finishes in the subject property dwelling should be considered ‘standard’ and that it is likely that the comparable properties have some upgrades that are not present in the subject property. He believes an adjustment for this difference is reasonable as well.

ANALYSIS

20When the respective findings of the parties are compared, there are some obvious differences. But first, the similarities will be addressed. All of the comparable properties in evidence are similar in size and general appearance/characteristics. They are all two-storey dwellings with living areas in the 3,800 to 4,100 sq. ft. range. In addition, all of the comparable properties considered by the Board are at least nine years older than the subject property. However, when determining the current value of a specific property from comparable properties, it is prudent to consider the differences as well as the similarities.

21All six of Ms. Medeiros’s comparable have the same quality of construction code of 7.0. This is the same code was applied to the subject property, after it was reduced by MPAC from 7.5%, based on submissions by the Appellants and based on MPAC’s site review. At the same time, Mr. Dabas insists that his dwelling is not built to the same standard as the neighbouring properties or the properties in MPAC’s sample of comparables. The Board views Ms. Medeiros’s response to the quality code as reasonable. The Board finds that Mr. Dabas’ submissions that his property is of a lower quality code are not substantiated by documentary evidence to show what adjustment is correct. Mr. Dabas’ comparables are all at the 6.5% quality rating. The value per square foot of the properties considered by the Board are generally lower than those submitted by MPAC, which is logical; indicating that, all other things being equal, the value of the subject property ought to be higher than the values represented by the Appellants’ comparable properties.

22Ms. Medeiros arrived at the recommended CVA by comparing the TAS prices of six comparable sales with the same quality code. While the living areas of these comparable properties and the subject property varied slightly, the Board finds that they are sufficiently close to make an informed comparison. The median per sq. ft. TAS value of the comparables, including Mr. Dabas’ Sale 6 (the only one in the Appellants’ submission that had a sale within 12 months of the valuation date) is $206.75. When applied to the living area of the subject property, the result is a value of $817,283 (rounded), which is very close to the value recommended by MPAC. The Board notes that the subject property is 9-10 years newer than the comparables used for the median per sq. ft. price, indicating that, if anything, the value for the subject property should be higher. The Board has no evidence to suggest a value higher than that recommended by MPAC.

23While Mr. Dabas had strongly held beliefs about the difference in interior finishes between the subject property and the comparable properties in evidence, he did not provide any documentary evidence to indicate the value of these adjustments or their corresponding difference in value. The Board also notes that the quality code on the Appellants’ comparable properties were all 6.5% lower than the quality code arrived at by MPAC. The Board disregards this line of approach as a result.

24Mr. Dabas also submitted six comparable properties to support a lower assessment. However, five of the six had sale dates that were well beyond the normally accepted time frame considered reliable for the determination of current value. Ms. Medeiros testified that, in this case, the most reliable sales for comparison should fall within 12 months of the valuation date. The Board agrees, and considered only the six properties in MPAC’s analysis and Sale 6 in Mr. Dabas’ analysis.

25Mr. Dabas submitted that, using MPAC’s own website as a resource, the values of residential properties in the area have risen by an average of 5.22% per year since the valuation date of January 1, 2012. He submits that if three years’ worth of value were deducted from the sale price of $826,000 (rounded), the value on the valuation date is $688,000 (rounded). The Board finds this approach to be flawed in two ways. Firstly, using a builder sale as a basis of value is unreliable, as interior finishes, variances in what is included in the sale and what is not and any other extraneous interests such as chattels, appliances or any manner of other items can impact these sale prices, without any reliable data being reported to MPAC. Ms. Medeiros testified that MPAC does not use builder sales for valuation of properties for these reasons. Secondly, Ms. Medeiros explained that the percentage average values presented by MPAC on their website are what are called ‘macro’ values. Macro values take into account a broad range of residential properties and a large number of sales. She submitted that, unless the variables of each property that leads to the average can be compared to the subject property, they cannot be used to determine the current value of the subject property. The Board agrees, and in any case, the Board has no such comparative analysis from Mr. Dabas to support this approach to valuing the subject property.

26In summary, the Board finds that the best evidence of the current value of the subject property is the comparison of the six properties in MPAC’s study and Sale 6 in the Appellants’ evidence. Accordingly, the Board finds that the current value of the subject property is $815,000, as recommended by MPAC.

27To make a determination on whether or not the current value determined for the subject property represents equitable assessment, the Board has seven properties in evidence that have reliable data for sales that occurred in 2011 and 2012. Sales in these two years allow for time adjustment from MPAC’s Table 1 – Time Adjustment Factors. When the assessments of these seven properties are compared with their time adjusted sale (TAS) value, the ratio is called the Assessment to Sale Ratio (ASR). An ASR under 1.00 indicates that a property is assessed at a level below its TAS value, while an ASR above 1.00 indicates that a property is assessed at a level above its TAS value. The TAS and assessment values for each of the seven properties in the equity analysis is summarized in Table C, below.

TABLE C

Sale	Time Adjusted Sale Value	January 1, 2012 Assessment	Assessment to Sale Ratio (ASR)
MPAC A	832,260	770,000	.925
MPAC B	846,270	746,000	.882
MPAC C	777,840	750,000	.964
MPAC D	769,004	734,000	.954
MPAC E	779,031	703,000	.902
MPAC F	906,407	829,000	.915
APPELLANT 6	745,875	739,000	.991

28The assessments of all seven properties in the sample are lower than the TAS values. The median ASR is 0.925, indicating that similar properties in the vicinity are regularly assessed at a value of approximately 92.5 percent of their time adjusted sale value.

29The Board finds that the best evidence to determine an adjustment for equitable assessment of the subject property is the median ASR determined through the analysis of the seven similar properties in evidence. Accordingly, the Board finds that the assessment of the subject property is reduced, from $815,000 as determined as current value, to $754,000 ($815,000 multiplied by 0.925 and rounded).

CONCLUSION

30The Board finds that the current value of the subject property is $815,000. The Board also finds that, for the purposes of equitable assessment, in accordance with s. 44.(3)(b) of the Act, the assessment is reduced to $754,000.

31Accordingly, the Board finds that the value of the supplementary assessment at 74 Quintette Close is reduced, from $561,000 to $442,000, commencing September 1, 2015. In addition, the assessment of the subject property, for the 2016 taxation year is reduced from $873,000 to $754,000 in the Residential property class.