Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE:

January 17, 2017

FILE NO.:

WR 143342

Assessed Person(s):

Carmen’s Auto Service Inc.

Appellant(s):

Carmen’s Auto Service Inc. and Michael Brookes

Respondent(s):

Municipal Property Assessment Corporation (“MPAC”) Region 15

Respondent(s)

City of Mississauga

Property Location(s):

494 and 498 Lakeshore Road East

Municipality(ies):

City of Mississauga

Roll Number(s):

2105-010-002-19800-0000 and 2105-010-002-19900-0000

Appeal Number(s):

3116627, 3151605, 3116629 and 3153241

Taxation Year(s):

2015 and 2016

Hearing Event No(s):

624642 and 643564

Legislative Authority:

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

Heard:

July 15, 2016 and October 11, 2016 in Mississauga, Ontario

APPEARANCES:

Parties

Representative

Carmen’s Auto Service Inc.

Michael Brookes

MPAC

Jim Rilling

City of Mississauga

No one appeared

DECISION OF THE BOARD DELIVERED BY SONIA LIGHT

ISSUE

1The subject property is comprised of two roll numbers municipally known as 494 and 498 Lakeshore Road East located in Mississauga, Ontario. They are situated on the south side of Lakeshore Road East, West of Cawthra Road in Port Credit, Mississauga. The subject property at 498 Lakeshore Road East has a site area of .12 acres and is improved with a 1,111 square feet (“sq. ft.”) auto service garage originally constructed in 1947 with an addition constructed in 2006. It also contains 77 sq. ft. of interior office space. The adjacent parcel at 494 Lakeshore Road East is utilized for parking in conjunction with the auto service garage. The parties agree that the value of the property should be determined as if it were a single parcel and that the assessment of the properties comprising the two roll numbers should be consolidated under a single roll number.

2MPAC returned the assessment for the 2015 and 2016 taxation years at $832,000 for the property municipally known as 498 Lakeshore Road East and $536,000 for the property municipally know as 494 Lakeshore Road East. Following an inspection of the property on June 2, 2015 with the representative for Carmen’s Auto Service Inc. (the “Appellant”) to verify the building measurements and assembly components of the building and an analysis of comparable sales, MPAC is recommending that the returned assessments be revised to reflect a valuation based on a rate of $5,615,530 per acre and a building value of $42,047.

3The representative for the Appellant has not disputed MPAC’s revised current value analysis and has in fact adopted it in his own analysis but argues that the revised current value should be reduced for equity pursuant to s. 44.(3)(b) of the Assessment Act (“Act”).

4The Assessment Review Board (“Board”) must determine whether the 2015 and 2016 assessments are correct and equitable.

5This hearing commenced on July 15, 2016 and was interrupted due to a family emergency of the representative for the Appellant and the hearing was completed on October 11, 2016.

DECISION

6For the reasons stated below and as directed by s. 44.(3)(a) of the Act the Board finds that the current value of the subject property is $715,910 for 498 Lakeshore Road East and $336,932 for the parcel municipally known as 494 Lakeshore Road East or about $1,052,000 for both parcels.

7The Board finds that a case for an adjustment to current value for equity pursuant to s. 44.(3)(b) has not been made in the circumstances. The Appellant could not demonstrate that the current value of the subject property as determined is inequitable relative to the assessed values of similar lands in the vicinity.

REASONS FOR DECISION

Legislation

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 1 of the Act defines “current value” as:

“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 19.2(1)3 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.

11Section 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.

12Section 40.(26) of the Act directs:

40.(26) Deemed appeals, 2009 and subsequent years. – For 2009 and subsequent taxation years, an appellant shall be deemed to have brought the same appeal in respect of a property,

(a) in relation to the assessments under sections 32, 33 and 34 for the year; and

(b) in relation to the assessment, including assessments under sections 32, 33 and 34, for a subsequent taxation year to which the same general reassessment applies, if the appeal is not finally disposed of before March 31 of the subsequent taxation year or, if an assessment has been made under section 32, 33 or 34, before the 90th day after the notice of assessment was mailed.

Current Value Analysis

13Becky Chong is an acting property valuation analyst with MPAC. She submitted her valuation report to the Board as Exhibit 1. She inspected the subject property on June 2, 2015 and reviewed the cost records in the automated cost system and made adjustments to the property details resulting in a total revised value of $1,083,000 for both parcels instead of the originally returned total value of $1,368,000.

14Ms. Chong also performed a land residual sales analysis based on three suggested comparable sales involving small commercial properties with buildings. The properties she selected were 133 Queen Street East, 1661 Lakeshore Road West and 320 Lakeshore Road East. She determined the median time adjusted sale to be the sale at 320 Lake Shore East at a selling price of $5,615,000 per acre. The Board notes that this sale is located closest to the subject property of the suggested comparable sales. At this rate she calculated that the current value of the subject property comprising .18 acres would be $1,052,842 including the building valued at $42,047 according to MPAC’s automated cost system.

15Mr. Brookes, the representative for the Appellant, adopted in his equity analysis found in Exhibit 2, the same value of $5,615,000 per acre of land as determined by Ms. Chong and therefore, the Board finds that this value reflects the current value of the subject property and is in fact not in dispute. Since the suggested comparable sale at 320 Lakeshore Road East is located very close and is similar in size to the subject property the Board also concludes based on the evidence presented that the current value of the subject property is appropriately based on this value of $5,615,530 per acre.

16Accordingly, the Board finds that the correct current value of the subject properties to be $715,910 for 498 Lakeshore Road East and $336,932 for the parcel municipally known as 494 Lakeshore Road East or $1,052,842 or $1,052,000 (rounded) for both parcels.

Equity Analysis

17MPAC did not prepare or present an equity analysis.

18Mr. Brookes conducted an equity analysis filed as Exhibit 2.

19The first part of Mr. Brookes analysis involved dividing the current value assessments of the three comparable sales relied on by MPAC in its land residual sales analysis by the total value of each property based on a time adjusted sales price of $5,615,530 per acre to determine respective land values and the MPAC automated cost system to determine the respective building values. He calculated ratios of 96.75%, 60.85% and 111% on this basis. The Board recalculated the ratios based on actual time adjusted sales prices for the same properties and determined the assessment to sales rations (“ASR’s”) to be 1.01, 0.61, and 1.18 respectively. The Board finds that the ASR’s for these properties provide insufficient data to justify a reduction to current value for equity reasons.

20The next part of Mr. Brookes’ equity analysis involved the calculation of notional sales for five auto body shops, located between 644 to 909 Lakeshore Road East, based on a price per acre of $5,615,530 plus the building value attributed to it by MPAC’s Automated Cost System records. Photos of these auto body shops are shown on pages of 13-15 of his report (Exhibit 5) and four of the five appear to be very similar to the subject property. All five of the properties are designated as property code 421 like the subject property.

21Employing this notional sales analysis, Mr. Brookes calculated and submitted assessment to notional sales ratios ranging from 54.4% to 81.12% with an average assessment to notional sale ratio of 63.99% for the five auto body shops. However, the Board does not consider the notional sales value to be an appropriate substitute for an actual sales value and therefore the ratios calculated respecting the five properties presented do not carry the same weight as ASRs calculated on the basis of actual sales.

22In reviewing the data on the five body shops the Board noted that two of the shops, being 827 and 857 Lakeshore Road East are most similar to the subject property, both being located on a 0.18 lot size and containing relatively low value buildings. These properties are assessed at 670,000 and 686,000 respectively. However, the Board finds that this sample of five auto body shop properties provides insufficient data to demonstrate a trend that similar properties in the vicinity are being assessed at values significantly lower than what they would sell for, especially when the ASRs of the aforementioned comparable sales also presented at the hearing reveal no such trend.

23Accordingly, the Board has determined that the Appellant could not demonstrate that the current value of the subject property as determined is inequitable relative to the assessed values of similar lands in the vicinity.