Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: February 26, 2016

FILE NO.: WR 138587

Assessed Person(s): Harvey Gary Kotler

Appellant(s): Harvey Gary Kotler

Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 16

Respondent(s): Town of Innisfil

Property Location(s): 1339 Maple Road

Municipality(ies): Town of Innisfil

Roll Number(s): 4316-010-014-04300-0000

Appeal Number(s): 3056652 and 3087559

Taxation Year(s): 2014 and 2015

Hearing Event No. 611938

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

Heard: January 25, 2016 in Innisfil, Ontario

APPEARANCES:

Parties Counsel+/Representative

Harvey Gary Kotler Alana Kotler

MPAC Adam Parker

Town of Innisfil No one appeared

DECISION OF THE BOARD DELIVERED BY JENNIFER GRIFFITH

INTRODUCTION

1The appeals before the Assessment Review Board (“Board”) are filed by the assessed person in respect to the returned assessments of $598,000 for the 2014 taxation year and $564,000 for the 2015 taxation year, for the subject property at 1339 Maple Road, in the Town of Innisfil.

ISSUE

2Adam Parker, representative for MPAC, is of the view that a fair and equitable assessed value for the subject property should be $564,000 for the 2014 and 2015 taxation years, based on a negative adjustment of $34,000 for the poor quality of a bunkhouse carried forward from the 2008 Current Value Assessment (“CVA”), and as compared to the sales of similar lands in the vicinity.

3Alana Kotler, representative for the appellant, is of the view that the subject property is assessed too high and that a fair and equitable value should be $458,000. Ms. Kotler argued that this value is a revised assessment value of the subject property, which is similar to the returned assessment of $458,000 for the comparable property of 311 Limerick Street.

4The Town of Innisfil was not in attendance at the hearing.

5The Board has to decide:

• Whether the returned assessments of $598,000 for the 2014 taxation year and $564,000 for the 2015 taxation year for the subject property are at current value as at the valuation date January 1, 2012.

• Whether the value is equitable with the assessments of similar lands in the vicinity.

DECISION

6The Board having determined the current value to be $631,000 and having found that an equity adjustment is required, reduces the returned assessment of the subject property from $598,000 to $564,000 for the 2014 taxation year; and confirms the returned assessment of $564,000 for the subject property for the 2015 taxation year.

REASONS FOR DECISION

Background

7The subject property is described as a single-family detached home on water, built in 1967, with a total building area of 1,447 square feet (“sq. ft.”), a frontage of 60 feet (“ft.”), a depth of 229.35 ft. for a total site area of 13,068 sq. ft. and a quality 5.5 rating (Exhibit 1, p. 5).

The Legislation

8In determining the value at which land shall be assessed, the Board must have regard to the following provisions of the Assessment Act (“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 19.2(1) of the Act states:

Valuation days

19.2 (1) Subject to subsection (5), the day as of which land is valued for a taxation year is determined as follows:

1. For the 2006, 2007 and 2008 taxation years, land is valued as of January 1, 2005.

2. For the period consisting of the four taxation years from 2009 to 2012, land is valued as of January 1, 2008.

3. For each subsequent period consisting of four consecutive taxation years, land is valued as of January 1 of the year preceding the first of those four taxation years.

Exception

(5) Subsection (1) does not apply in respect of the valuation of land for a taxation year after 2004 if the Minister prescribes a different day as of which land is valued for that year.

12Section 40.(17) of the Act states:

40.(17) Burden of proof. – For 2009 and subsequent taxation years, where value is a ground of appeal, the burden of proof as to the correctness of the current value of the land rests with the assessment corporation.

13Section 40.(19) of the Act states:

40.(19) Board to make determination. – After hearing the evidence and the submissions of the parties, the Board shall determine the matter.

14In determining the value at which any land shall be assessed, s. 44.(3)(a) and (b) of the Act requires the Board to do two things:

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.

Preliminary Issue

15Ms. Kotler raised issue as to what the correct total square footage of the site area of the subject property should be, because of conflicting site areas shown in disclosure documents received from MPAC. Exhibit 1, p. 5, shows the site area as 13,068 sq. ft., Exhibit 2, p. 1, shows the total site area as 13,761 sq. ft. and Exhibit 3 shows a copy of the Property Assessment Notice with a total site area of 13,068 sq. ft. She also presented Exhibit 5, a map of the site area with attached aerial photograph of the site area.

16In response to the above issue, Mr. Parker confirmed that the site area is a pie-shaped lot and that the 13,761 sq. ft. is based on the legal registered survey which he stated as 722 Lot 14 Part Lot 13, Registered 51R6522 Parts 2 and 3. Mr. Parker believes that the site area of 13,068 sq. ft. is based on MPAC’s calculation of a pie-shaped lot, although he could not say for sure that it is.

17Based on the evidence, the Board accepts the legal registered site area of 13,761 sq. ft. However, the Board finds that Mr. Parker provided no confident explanation as to why the subject property’s site area is shown to be of 13,068 sq. ft. The fact that the site area of 13,068 sq. ft. appears in many of the exhibits and in the Property Assessment Notice for the 2013 through 2016 taxation years, the Board is forced to accept the site area of the subject property as 13,068 sq. ft. for the purpose of this appeal.

Current Value

MPAC’s Position

18In support of his argument, Mr. Parker presented Exhibit 1, which contains sales analysis, time-adjustment factor analysis, photographs and a map.

19In support of current value, Mr. Parker presented Exhibit 1, Appendix A, a Market Analysis with the sales of six comparable properties sold in 2011 and identified as Sale A through Sale F. Mr. Parker testified that these six comparable properties are assessed as waterfront properties, whereas, the subject property is assessed as an indirect waterfront property. The reason being that the site frontage is separated from the shoreline by a portion of land owned by the Ministry of Natural Resources. Access to the lake is made possible by a joint rental agreement with one of the neighbouring properties.

20Mr. Parker testified that the returned assessment of the subject property reflects a negative adjustment of $113,000 for the infill land owned by the Ministry of Natural Resources, and situated between the subject property and the shoreline. Mr. Parker testified that this same issue was the subject of an appeal for the 2009 and 2010 taxation years before the Board, and that one of the considerations given in the reduction was for the indirect waterfront. Mr. Parker is of the view based on the sale price of $18,731 in 2010, of a similar piece of infill land between 1029 Cedar Avenue and the shoreline (Exhibit 7), that the negative adjustment of $113,000 is more than reasonable.

21In reviewing the above six sales the Board finds that Sales D, E and F to be the most similar to the subject property. As the subject property received a negative adjustment of $34,000 for a bunkie that is said to be in poor condition and an $113,000 adjustment for having an indirect waterfront, the adjusted sale prices of these three comparable properties were reduced by that same value ($34,000 + $113,000) to make them similar to the subject property.

22The analysis of the sales of these three comparable properties reflects an average total building area of 1,293 sq. ft., an average frontage of 50 ft., an average site area of 14,875 sq. ft., average age of 1961 and an average adjusted sale price of $436 per sq. ft. based on total building area. This is compared to the subject property with a frontage of 60 ft., a total building area of 1,447 sq. ft., a total site area of 13,068 sq. ft., built in 1967 and assessed at a value of $413.26 per sq. ft. based on total building area. Applying the open-market sale price of $436 per sq. ft. to the subject property results in a value of ($436 x 1,447) = $631,000 (rounded).

Appellant’s Position

23In support of her argument, that a fair and equitable assessment for the subject property is $458,000, Ms. Kotler presented the following:

• Exhibit 3, to demonstrate that a negative adjustment of $108,203 is warranted for the subject property based on a single comparable property. Ms. Kotler argued that the assessed land value of the subject property is assessed too high, as compared to 311 Limerick Street which is a similar indirect waterfront property to the subject property. She argued that the above negative adjustment is determined by the difference in the assessed land value of 311 Limerick Street at $30.25 per sq. ft. which is $8.28 per sq. ft. lower than the subject property at $38.53 per sq. ft.

• Exhibit 4, to show a breakdown of what the estimated cost would be to purchase and repair the lands held by the Ministry of Natural Resources. Ms. Kotler estimated the cost to be $131,164.52 which she argued is more than MPAC’s adjustment of $113,000.

• Exhibit 6 contains copies of document to show the outstanding rent owing for the use of the Crown land from the Ministry of Natural Resources, a 2008 estimated price for Crown lands, and a December 2015 estimated cost to repair the break-wall and boathouse by Crowedock Docking Systems.

• Exhibit 8, to demonstrate that a negative adjustment of 20% (or $114,559) for the inherent issues surrounding the subject property is warranted. This value is based on an opinion of value from John Stephens, Royal LePage. Contained in Exhibit 8 are copies of documents in support of the reduction (emails, letters, registered plans, registered copies of agreements between the Kotler and Cohen families, 2010 invoice from Aluminum Ltd., copy of an opinion letter from John Stephens, Royal LePage (not dated), copies of emails to and from John Stephens, and Multiple Listing Service (“MLS®”) listings of comparable properties sold in Georgina Township over the period 2010 through 2013. These documents are in support of the above argument.

• Lastly, Ms. Kotler argued that a negative adjustment of $30,000 for the poor condition of the bunkie based on a 2008 CVA should be carried over to the 2012 CVA.

24Based on the above arguments Ms. Kotler is of the view that if the returned assessment of the subject property was to be made similar to the comparable property at 311 Limerick Street it would result in a revised assessment value of ($598,000 + $113,000) – ($108,203 + $114,559 + $30,000) = $458,000 (rounded).

25In response to the above arguments, Mr. Parker argued:

• That the adjustment of $113,000 is fair, when compared to the Ministry of Natural Resources’ estimated sale price of $73,962.76 (Exhibit 6) for the infill land between the subject property and the shoreline; and as compared to the 2010 sale of a similar piece of infill land for $18,731.55 at 1029 Cedar Avenue (Exhibit 7).

• That the assessed value of $7,500 for the boathouse is reflective of the condition at the time of the valuation.

• That the lake water at 311 Limerick Street is weedy and shallow, and that properties with non-weedy lake water are higher in value.

• That the opinion of a 20 %reduction for inherit issues surrounding the subject property is not substantiated, because Mr. Stephens, Royal LePage, was not in attendance to be cross-examined; the copy of the Mr. Stephens’s letter of opinion is not an original and not dated; and the documents provide no explanation as to how Mr. Stephens arrived at the 20% reduction.

• That the MLS® listings of the sales which occurred in Georgina Township over the period 2010 through 2013 in support of the 20% reduction should be relied on, because these sales occurred in a different Township and were only presented at today’s hearing.

• That the proposed value of $458,000 is significantly lower than the 2008 CVA of $508,000.

The Board's Analysis and Decision

26In reviewing all of the evidence, the Board did not rely on the revised assessment of $458,000 presented by Ms. Kotler because this value is based on estimates and assessment values as opposed to open market sales as stated above under s. 19.(1) and s. 1 of the Act.

27The fact that the returned assessment of the subject property is under appeal with this Board, would suggest that Ms. Kotler disagrees with MPAC’s methodology. Therefore, the Board finds it is questionable as to why Ms. Kotler would rely on the assessment values of 311 Limerick Street, which was determined by the same methodology as the subject property.

28It is also important to note that both parties testified that 311 Limerick Street is a similar type indirect waterfront property as the subject property. This property is older and smaller than the subject property, and sold in 2011 at a time adjusted cost of $458.60 per sq. ft. based on total building area, which is significantly higher than the recommended value of $389.77 per sq. ft. for the subject property.

29The Board did not rely on the argument of Mr. Brown, representative for MPAC in Sinkins v. Municipal Property Assessment Corp., Region No. 25 [2003] O.A.R.B.D. No. 300, in which he stated that “a 10% allowance to the total assessed value had been granted this property to account for the site size.” The reason being, that this Board is not privy to the evidence upon which this 10% allowance was granted. However, this Board is satisfied that the adjustments offered to the subject property in the appeal at hand, are reasonable based on the evidence.

30The best evidence of current value is the sale of the subject property in the open-market. In situations, where the subject property is not sold, as is this case, the Board is required by the Act to review the open-market sales of similar lands in the vicinity, which occurred at a specific valuation date, in this case January 1, 2012, to test whether the returned assessment of the subject property as determined by MPAC’s model is at current value.

31Based on the above review, the Board finds that MPAC presented the best evidence with the three sales identified above as Sales D, E and F, sold in 2011 at an average adjusted sale price of $436.00 per sq. ft. based on total building area. This adjusted sale price when applied to the subject property results in a value of ($436 x 1,447 sq. ft. based on total building area) $631,000 (rounded).

32Based on the evidence, the Board determines the current value to be $631,000.

Equity

33Mr. Parker presented no evidence in support of equity. However, the Board analyzed the sales of the six comparable presented by MPAC in support of current value, with their respective returned assessments provided in Exhibit 2. These six sales reflect an average Assessment to Sales Ratio (“ASR”) of 0.905. When the average ASR is applied to the current value of $631,000 determined above, it results in a value of ($631,000 x 0.905) $571,000 (rounded).

34Ms. Kotler presented no evidence in support of equity.

35Based on the above evidence, the Board finds that the evidence supports the conclusion that the current value as determined above requires an equity adjustment which results in a value of $571,000.

CONCLUSION

36Based on all of the evidence, the Board determined the current value to be $631,000, and also determined that an equity adjustment is required and reduces the value to $571,000. However, MPAC presented into evidence a recommended value of $564,000 which the Board accepts. Therefore, the Board reduces the returned assessment of the subject property from $598,000 to $564,000 for the 2014 taxation year; and confirms the returned assessment of $564,000 for the subject property for the 2015 taxation year.