Aleksandar Ignjatovic and Vesna Vukojevic v. Municipal Property Assessment Corporation, 2017 CanLII 21123

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE:

April 12, 2017

FILE NO.:

WR 145942

Assessed Person(s):

Aleksandar Ignjatovic and Vesna Vukojevic

Appellant(s):

Aleksandar Ignjatovic and Vesna Vukojevic

Respondent(s):

Municipal Property Assessment Corporation (“MPAC”), Region No. 09

Respondent(s):

City of Toronto

Property Location(s):

100 Quebec Avenue, Unit 904

Municipality(ies):

City of Toronto

Roll Number(s):

1904-013-260-01380-0000

Appeal Number(s):

3115543 and 3146900

Taxation Year(s):

2015 and 2016

Hearing Event No.

666765

Legislative Authority:

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

Heard:

March 20, 2017 in Toronto, Ontario

APPEARANCES:

Parties

Representative

Vesna Vukojevic

Self-represented

MPAC

Roberto Boccia

City of Toronto

No one appeared

DECISION OF THE BOARD DELIVERED BY J. L. WALKER

INTRODUCTION

1The subject property is a residential condominium unit located at 100 Quebec Avenue, located north of High Park. The condominium was built in 1979. The Municipal Property Assessment Corporation (“MPAC”) returned the assessment for Unit 904 for the 2015 and 2016 taxation years at $393,000. Roberto Boccia, Property Valuation Analyst for MPAC submits that this is the correct current value, and that no adjustment is required to achieve equity with the assessments of similar lands in the vicinity.

2Vesna Vukojevic, the appellant, argues that Unit 904 has been over-assessed in view of its condition, structural issues, obstructed views, and when compared to other units in the building, which she maintains are superior properties. She submits that when these factors are taken into account, her assessment should be reduced to $340,000 (Exhibit 3).

3The Board must determine the correct current value of the subject property, and then determine whether this value is equitable with the assessments of similar lands in the vicinity.

DECISION

4The Board determined that the assessment as returned is at current value, and that no further reduction is required to achieve equity with the assessments of similar lands in the vicinity. The Board confirms the assessment of $393,000 for the 2015 and 2016 taxation years.

REASONS FOR DECISION

The Legislation

5In making its determination, the Board is governed by the following provisions of the Assessment Act, R.S.O. 1990, c. A.31, as amended (“Act”):

6Section 19.(1) states that “…the assessment of land shall be based on its current value.” Section 1 of the Act defines current value as “…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.”

7Section 19.2(1) of the Act establishes January 1, 2012 as the valuation day for the 2013 to 2016 taxation years.

8Section 44.(3) of the Act provides the test that must be applied upon an appeal on any ground against an assessment:

(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.

9Under s. 40. (17), where value is the ground of an appeal, “…the burden of proof as to the correctness of the current value of the land rests with the assessment corporation.”

10After hearing the evidence and submissions of the parties, the Board shall determine the matter pursuant to s. 40. (19) of the Act.

Current Value

11The Board determined that the assessment as returned at $393,000 is the most probable current value for the subject property based on the sales of other units in the subject building. Ms. Vukojevic has lived in her unit for 13 years, and takes the position that this value is unfair as MPAC has not considered the factors that which negatively affect the subject property’s value, as described below. Without quantifiable evidence, the Board cannot determine the effect that these factors have on the subject property’s current value.

Negative Factors

12Ms. Vukojevic argues that obstructed views, the condition of and structural issues with the unit negatively affect the value of the subject property. Photographs of these factors were presented in Exhibit 3. 80 Quebec Avenue, an eight-storey residential condominium, situated immediately to the west of the subject building, was built in 1979. The appellant’s southerly view of Lake Ontario has been obstructed since 2008 by 20 Gothic Avenue, also an eight-storey building. Mr. Boccia confirmed that none of the west-facing units in the subject building receive a deduction for facing either of these eight-storey structures.

13All of the units have open balconies; the majority of which “wraparound” the entire unit, but the subject property’s balcony is smaller. Only a few of the units have smaller balconies. Mr. Boccia states that all units with open balconies receive a premium of $8,944 regardless of size which Ms. Vukojevic regards as unfair. She also states that an electrical panel situated at the rear of her unit detracts from the quality of her unit. Mr. Boccia states that the panels are present in some, but not all units, but are not treated as a negative factor.

14The subject property has an outward-facing bedroom, which Ms. Vukojevic states has caused mold to grow on the ceiling. She states that only a few units have this configuration, and that the condominium would not take responsibility for the removal of mold. Mr. Boccia states that absent a cost to cure, he was unable to make an adjustment.

15The appellant states that the unit had not been updated since 1979, but when cross-examined, conceded that some upgrades had been made prior to and during her ownership of the subject property. However, she stressed that these changes were minor and that her unit is inferior while properties with more recent upgrades and renovations were assessed at the same value.

16Lastly, Ms. Vukojevic states that her parking spot is to far below ground and located at such a distance that she cannot use it or rent it, and has no choice but to rent an additional spot.

17It does not seem unreasonable that a purchaser would pay a premium for a superior view, and might be deterred by the shortcomings described above. However, without quantifiable evidence, the Board cannot determine the cost to cure the damage caused by mold or the effect the obstructed view, lack of updates, smaller balcony, electrical panel, inconvenient parking space and outward-facing bedroom have on the value of the subject property. The Board does not have the jurisdiction to fill the gap in the evidence with its own opinion and estimate.

Sales of Units in the Subject Building

18Both parties presented comparable properties located within 100 Quebec Avenue. A total of 15 sales transacted at or near the valuation date of January 1, 2012 (Exhibit 1, Comparable Property Report; Exhibit 2, Valuation Report; Exhibit 3, Record of the Appellant). Given the robust market within the subject building and the similar nature of the units, the Board agrees that it is not necessary to look for further market evidence.

19Mr. Boccia submitted nine sales as evidence of current value, stating that the variables of location and unit size have the greatest impact on value. Ms. Vukojevic relies on three sales that were also submitted by MPAC and one that transacted in 2010 (Unit 908), which the Board excluded as too distant from the legislated valuation date.

20Mr. Boccia applied time adjustments to all but two sale values to ensure that the sales reflect the market conditions as of January 1, 2012. His valuation report states that the time adjustments were determined by comparing the sale prices and 2012 current value assessments for 240 sales of residential condominium properties in the area over a sales period of 24 months, from January 2011 to December 2012.

21Each of the units has two bedrooms, one full bath, one half-bath and an open balcony. Units range in size from 938 to 988 square feet. Parking is included in the assessed values. On site variables and primary structural (positive or negative) variables specific to each property are noted below.

Unit No.

Assessed Value $

Sale $

Sale Date

Unit Area Square Foot

On Site Variables Exposure

Primary Structure Variable(s) Positive/Negative $

904

393,000

N/A

N/A

988

Predominant West

Abuts stairs

210

393,000

460,000

2013/01

988

Predominant West

Abuts stairs

310

393,000

451,099

2012/04

988

Predominant West

Abuts stairs

604

393,000

385,000

2011/03

988

Not provided

Abuts stairs

809

378,000

386,000

2011/09

938

Predominant East

903

378,000

415,000

2013/01

938

Predominant East

907

380,000

381,000

2011/09

938

Locker + 2,500

910

408,000

400,000

2011/12

988

Predominant West

Abuts stairs Renovation (2007)

1009

398,000

384,000

2011/03

938

Predominant East

Renovation (2005)

• 20, 214

1206

379,000

449,500

2011/10

958

Predominant West

Abuts elevator – 2,355 Abuts garbage shute -2,355

22If no sales were transacting on the west side of the building, or if properties were transacting for substantially less than those located on the east, that might suggest that MPAC was over-assessing the units. That is not the case. If anything, the units appear to be under-assessed.

23As stated by Mr. Boccia, unit size is a key factor and is reflected in the assessed values. The four larger units of 988 square feet are transacting close to or above their assessed value of $393,000, with a range of values from $385,000 to $460,000. Ms. Vukojevic submits that units on lower floors such as unit 210 and 310 benefit from a “park-like” setting, and this is reflected in the higher sales values.

24Mr. Boccia states that unit 910 is the best comparable property as it is located on the same floor as the subject property, is the same size, and has the same outward-facing bedroom, electrical panel and smaller balcony. Both unit 910 and 604 sold for $8,000 less than their assessed values, a 2% difference. These are lesser amounts but the difference in the assessed and sale values is negligible and does not suggest that the subject property is over-assessed.

25Ms. Vukojevic submits that unit 809 is the most similar to the subject property although she also notes it has a “premium” terrace and a lake view, and none of the structural obstacles her unit has. The Board does not agree as this unit and other smaller units of 938 square feet, including unit 907, have been assessed for $378,000. The appellant suggests that unit 1206 assessed at $379,000 also has a premium lake view and terrace but this is also a smaller unit of 958 square feet with negative adjustments for abutting an elevator and a garbage chute.

26The range of sale values for the comparable properties is $381,000 to $460,000. The assessed value of the subject property is at the lower end of the range together with other units of 988 square feet, which demonstrates that it is not-over-assessed.

27Absent a quantifiable estimate of the effect of the negative factors on value, the sales evidence supports the assessed value of $393,000 as the most probable current value of the subject property.

Equity

28The current value of the subject can be reduced only if there is evidence that it is at a higher level than the assessments of similar lands in the vicinity. In this case, the evidence does not demonstrate that a further adjustment is required.

29The best evidence of an inequitable current value is an Assessment to Sale Ratio (“ASR”) study of a sample of similar lands in the vicinity. The sample must be sufficiently large to be statistically meaningful. An ASR is calculated by dividing the assessed value by the sale value. A resulting median ratio of 1.00 or within 5% (0.95 – 1.05) demonstrates that current values are reflective of sale prices in the vicinity. If the resulting ratio is lower than 0.95, a downward adjustment must be made to a property’s current value.

30The only evidence before the Board with regard to equity was presented by Mr. Boccia, a sample of 40 sales of condominium units that transacted in nearby residential condominiums located on Gothic Avenue and Quebec Avenue (Exhibit 2). The 40 sales in this study have a median ASR of 0.97, indicating that no downward adjustment is required to the subject property’s current value.

CONCLUSION

31The Board understands that Ms. Vukojevic considers her assessment to be unfair, but this is not demonstrated by the market tested sales evidence. The Board reiterates that the best approach to curing the perceived unfairness may be addressed by presenting substantive evidence of the cost to cure the “curable” defects, and an appraisal of the property that can attest to its marketability.

32The Board determined that the assessment as returned is at current value, and that no further reduction is required to achieve equity with the assessments of similar lands in the vicinity. The Board confirms the assessment of $393,000 for the 2015 and 2016 taxation years.