Virox Properties Inc. v. Municipal Property Assessment Corporation, 2017 CanLII 27541

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE:

May 3, 2017

FILE NO.:

WR 145843

Assessed Person(s):

Virox Properties Inc.

Appellant(s):

Virox Properties c/o Martins Property

Respondent(s):

Municipal Property Assessment Corporation (“MPAC”) Region 15

Respondent(s):

Town of Oakville

Property Location(s):

2770 Coventry Road

Municipality(ies):

Town of Oakville

Roll Number(s):

2401-010-010-01944-0000

Appeal Number(s):

2984359, 3008078, 3085127 and 3153016

Taxation Year(s):

2013, 2014, 2015 and 2016

Hearing Event No.:

670265

Legislative Authority:

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

Heard:

March 8, 2017 in Mississauga, Ontario

APPEARANCES:

Parties

Representative

Virox Properties Inc.

Chris Ratnasingham

MPAC

Christian Stoeken

Town of Oakville

No one appeared

DECISION OF THE BOARD DELIVERED BY SONIA LIGHT

ISSUE

1The subject property is located at 2770 Coventry Road on the east side of Highway 403, north of the Queen Elizabeth Way, west of Winston Churchill Boulevard and south of Dundas Street in the Region of Halton and has a site area of 2.5 acres. The property is improved with a 42,420 square foot industrial structure constructed in 2003.

2MPAC returned the assessment for the subject property of $5,376,000 for the 2013, 2014, 2015 and 2016 taxation years, with $5,193,000 of the value attributed to the portion of the land classified as industrial (IT) and $183,000 attributed to the portion of the land classified as industrial excess land (IU). The representative for MPAC recommends that the total value of the assessment as returned be confirmed, but that the apportionment be changed with the industrial excess land (IU) valued at $417,000 and the value attributed to the industrial (IT) portion reduced accordingly to $4,959,000.

3The representative for the Appellant argued at the hearing that the assessments for the respective taxation years should be reduced to a total value of $4,286,000 with $3,869,000 attributed to the industrial land (IT). He agrees with the representative for MPAC that the remaining land classified as industrial excess land (IU) should be valued at $417,000.

4The Assessment Review Board (“Board”) must determine whether the 2013, 2014, 2015 and 2016 assessments are correct and equitable.

DECISION

5For the reasons stated below and as directed by s. 44.(3)(a) of the Assessment Act (“Act”) the Board finds that the current value of the subject property is $4,803,000 apportioned as follows: $4,386,000 Industrial (IT), $417,000 Industrial Excess Land (IU).

6The Board finds that the current value should not be adjusted for equity pursuant to s. 44.(3)(b) of the Act.

7The assessment of the subject property is reduced accordingly for the 2013, 2014, 2015 and 2016 taxation years.

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)2 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) 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

13Christian Stoeken is a Property Valuation Specialist with MPAC. He prepared a valuation report which he submitted to the Board as Exhibit 1. His report contains a sales analysis consisting of four suggested comparable sales. The sales prices for the sales ranged from $3,225,000 to $5,550,000. The sale prices in his report were not adjusted for time, lot size or floor area. Mr. Stoeken concluded that the current value assessment as returned in the amount of $5,376,000 is supported by his sales data and should be confirmed because the returned value falls within the wide range of the sale prices of the suggested comparable properties.

14Mr. Stoeken agrees with the representative for the Appellant that the portion of the subject property classified as industrial excess lands (IU) should be valued at $417,000 as reflected by the property details in MPAC’s cost database, excerpts of which were submitted to the Board by the Appellant as Exhibits 2 and 4.

15The Board notes that there is a discrepancy between Exhibits 2 and 4 submitted to the Board. In Exhibit 2, being the earlier version of MPAC’s property details, the total valuation of the subject property is shown to be $4,972,000 but there is also an “override” to a higher current value of $5,376,000. In Exhibit 4, which is the more recent MPAC information, the total valuation is $4,902,000 and the portion classified as industrial is valued at $4,484,984. Apparently, the property value information in Exhibit 2 was revised and updated based on a time adjusted sale of the subject property in 2008 that Mr. Stoeken explained he did not investigate since the sale was from a previous assessment cycle and would normally not be relied on by MPAC to determine current value. Mr. Stoeken agreed that the value of $417,000 for the excess lands shown in both exhibits would be the proper value for the excess land component of the property. However, he did not explain why he did not agree with the May 2015 revised information in Exhibit 4 indicating the total valuation for the subject property as $4,902,000 and preferred the override amount of $5,376,000 from the earlier 2012 MPAC database which is the same as the returned assessment.

16Chris Ratnasingham is a senior consultant with Altus Group. He reviewed the suggested comparable sales presented by Mr. Stoeken and determined that on the basis of relative lot size and total building areas of the respective buildings, 2450 Bristol Circle and 2770 Portland Drive were the most comparable to the subject property of the sales presented, although he indicated that in his opinion, the sale at 2770 Portland Drive was the most similar to the subject property. The Board notes that the sale at 2450 Bristol Circle is approximately an acre less than the subject property and the property at 2770 Portland Drive is an acre more than the subject property. While the Board agrees that the comparable sale at 2770 Portland Drive may be the most comparable to the subject property of the comparables presented, the Board would not rely on the adjusted price of one property in the circumstances.

17The Board was presented with minimal data respecting the comparable sales submitted by MPAC and therefore, based on a review of the limited data submitted the Board agrees with Mr. Ratnasingham’s analysis that 2450 Bristol Circle and 2770 Portland Drive were the most comparable to the subject property of the sales presented and therefore the most reliable indicators of current value of the subject property.

18Mr. Ratnasingham calculated and presented the Board with sale prices adjusted for lot size and building area for the two most comparable sales presented by MPAC. The adjusted sale price respecting 2450 Bristol Circle was calculated to be $5,320,000 (rounded) and the adjusted sale price for 2770 Portland Drive was calculated to be $4,286,000 (rounded). The Board has determined the average of these calculations to be $4,803,000 which the Board notes is also very close to the property value rounded of $4,902,000 found in MPAC’s most recent database records and the $4,972,000 found in Exhibit 2 before this value was overridden.

19The Board therefore, finds that based on the evidence presented, the current value of the subject property is $4,803,000. As the parties agree that $417,000 of this value should be apportioned to the excess land component of the property, the Board finds that the remaining $4,386,000 of the total value should be apportioned to the industrial (IT) component of the subject property.

Equity Analysis

20There was no evidence before the Board that would support a reduction to the assessments based on equity considerations pursuant to s. 44.(3)(b) of the Act.

21Accordingly, the Board finds that the current value should not be adjusted for equity pursuant to s. 44.(3)(b) of the Act.