Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: January 27, 2017

FILE NO.: WR 145046

Assessed Person(s): Rocco Liscio and Renee Ann Liscio

Appellant(s): Rocco Liscio and Renee Ann Liscio

Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 05

Respondent(s): Township of Stone Mills

Property Location(s): 370 Cedarstone Road

Municipality(ies): Township of Stone Mills

Roll Number(s): 1124-110-050-12300-0000

Appeal Number(s): 3175957

Taxation Year(s): 2016

Hearing Event No.: 642165

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

Heard: November 29, 2016 in Centreville, Ontario

APPEARANCES:

Parties	Representative
Rocco Liscio and Renee Ann Liscio	Rocco Liscio
MPAC	M. Blakely
Township of Stone Mills	No one appeared

DECISION OF THE BOARD DELIVERED BY MARILYN SHARMA

INTRODUCTION

1The subject property is a single family detached on water residential property located at 370 Cedarstone Road, Stone Mills, Ontario.

2The subject property is situated on a lot with a water frontage of 310 feet and a depth of 204 feet for an effective site area of 23,522.40 square feet.

3The subject property is located on Beaver Lake which is one of the larger and more desirable lakes in the area. The lake has a mix of permanent homes as well as seasonal cottages; some are on year round maintained roads while others are on privately maintained roads.

4The building was constructed in 2014 and its condition has been designated by MPAC as being of Quality ‘A’.

5The building is a one and three-quarter storey building with a first floor area of 1,582 square feet and an upper floor area of 1,058 square feet for a total building area of 2,640 square feet.

6The subject property has one fireplace, three full baths and three bedrooms. The building is fitted with central air conditioning. Water is provided via a private well and sanitary sewer is provided via a septic system. A detached garage having an area of 827 square feet is located on the subject property.

7The assessment of the subject property for the taxation year 2016 is $583,000.

8As a result of a Request for Reconsideration filed in 2016 by the Appellants, MPAC reduced the assessment from $583,000 to $551,000. This offer was refused by Rocco Liscio and Renee Ann Liscio (“Appellants”).

9The assessor advised the Assessment Review Board (“Board”) that she also conducted an equity analysis and determined that similar properties in the vicinity of the subject property were 9% under assessed. As a result, she was recommending that the assessment of the subject property be reduced by the 9% for equity reducing the revised assessment from $551,000 to $501,000.

10Rocco Liscio, representing the Appellants argues that in his opinion MPAC has over assessed his property and believes that the assessment is excessive in relation to similar properties in the neighbourhood.

ISSUE

11The issue before the Board is to determine whether the subject property has been over assessed in relation to other properties in the neighbourhood.

DECISION

12The Board finds that the current value of the subject property for the 2016 taxation year is $626,000.

13The Board finds that an adjustment is required for equity purposes under s. 44.(3)(b) of the Assessment Act, R.S.O. 1990, c.A.31, as amended (“Act”) and reduces the current value from $626,000 to $570,000.

14The Board however accepts the revised current value of $551,000 reached by MPAC during the Request for Reconsideration process and the equity reduction of 9% thereby reducing the assessment from $551,000 to $501,000.

15The Board notes that the current value established by the Board is higher than the assessment as established by MPAC. Neither party requested an increase in the assessment. The Board accepts the assessor’s recommendations and reduces the assessment from $551,000 to $501,000.

16Accordingly, the Board reduces the assessment of the subject property for the 2016 taxation year from $583,000 to $501,000.

REASONS FOR DECISION

The Legislation

17For the 2016 taxation year, in determining the value at which land shall be assessed, the Board must have regard to the following provisions of the Act:

18Section 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.

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

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

20Section 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.

21Section 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.

22Section 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.

23Section 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.

Analysis

24Under the Act the Board is required to do three things:

1. Find the current value of the property;

2. Make reference to the value at which similar lands in the vicinity are assessed;

3. Adjust the assessment of the subject property if the adjustment would result in a reduction in the assessment.

Current Value

25The best measure of current value is an arm’s length and market tested sale of the subject property on the valuation date of January 1, 2012, or close to it. If no such transaction took place, a further measure of current value is arm’s length and market tested sales of comparable properties in the same vicinity and market. This measure acts as a benchmark and gauge of the correctness of the assessed value of the subject property. The onus for establishing the correctness of the current value lies with MPAC.

MPAC’s Evidence

26MPAC provided four suggested comparable properties as shown in Table 1:

Table 1 MPAC’s Suggested Comparable Properties

Address	Bldg. Area (sq. ft.)	Lot Frontage (Feet)	Lot Depth (Feet)	Lot Size (sq. ft.)	Year Built	Sale Amt.	Sale Date
370 Cedarstone Road, Stone Mills (subject property)	2,640	310.00	204.00	23,522.40	2014
470 F Neville Point Road (Sale A)	1,424	158.40	145.80	23,086.80	1993	$425,000	05/2012
338 Neville Point Road (Sale B)	2,745	213.25	169.51	36,154.80	1988	$482,500	09/2010
92 Neville Point Road (Sale C)	1,385	315.00	207.40	65,340.00	1990	$472,000	09/2013
352 A Cedarstone Road (Sale D)	1,775	100.00	390.00	169,012.80	1981	$465,000	12/2013

27The Assessor contends that she examined the sales of the above four suggested comparable properties in the vicinity of the subject property and is of the opinion that they are relatively comparable to the subject property.

28The Assessor stated that all four suggested comparable properties are located on the same lake as the subject property.

29The Assessor evaluated each of the four properties as follows:

i. Sale A located at 470 F Neville Point Road has a shoreline that is approximately 151 less than the subject property; comparable lot size, smaller in building size by 1,216 square feet and is 21 years older and has a detached garage of 1,240 square feet.

ii. Sale B located at 338 Neville Point Road has a shoreline that is approximately 97 feet less than the subject property, larger lot size, a comparable building size and is 26 years older.

iii. Sale C is located at 92 Neville Point Road has a shoreline that is just 5 feet more than the subject property, a larger lot size, a building area that is approximately 1,255 square feet smaller and is 24 years older and has two detached garages of 660 and 440 square feet respectively.

iv. Sale D is located at 352 A Cedarstone Road has a shoreline that is approximately 210 feet less than the subject property, a larger lot size, smaller in building size by approximately 865 square feet and is 33 years older.

30The Assessor stated that in her opinion all four suggested comparable properties were inferior to the subject property primarily because of their age being 21 to 33 years older than the subject property.

31The Assessor however informed the Board that it is her view that Sale B, despite being 26 years older than the subject property was the most similar because of its building size, number of bathrooms and type of heating.

32The Board was informed that the time adjusted sale price of Sale B is $526,000 and since the subject property is in the same vicinity it should expect to realize a value that is directly comparable to Sale B.

33The Assessor stated that on the basis of her analysis the recommended assessment of the subject property of $551,000 is reasonable.

Appellant’s Evidence

34The Appellant provided a package of information (Exhibit 2) comprising various documents to support his appeal.

35The Appellant stated that the shoreline of his property is irregular which has a negative impact on the value of his property compared to other properties with a linear shoreline.

36The Appellant provided photographs to show that the location of a septic system in an adjoining property resulted in a change in the grading of the adjacent property causing flooding conditions onto his property.

37The Appellant submitted a chart with four properties in the vicinity of the subject property to demonstrate a disparity in MPAC’s designation of the quality of construction of the buildings. He believes that since he personally constructed his home the quality of construction was not comparable to those of the four which were built by professionals and therefore his property should have a lower current value.

38The Appellant is of the view that in order to make a meaningful comparison all data elements should be taken into account. He believes that MPAC did not consider all data elements in its analysis.

39The Appellant submitted a copy of an agreement between the Township of Stone Mills and himself which indemnifies the Municipality and removes any responsibility by the Municipality for maintenance or repair and will have no obligation to maintain or repair the private lane that provides access to the owner’s land, or to perform or provide any other Municipal services normally associated with public roads and highways. Further, the agreement states that the Municipality will not be responsible for any loss, damage, or injury, whether direct or indirect arising from the inability of emergency services to access the owner’s land because of the owner’s failure to properly maintain the private lane. The agreement is registered against the title to the owners land and is binding on any and all subsequent owners of the land. The Appellant believes that this agreement adversely affects the potential of the sale of the property and hence the current value of his property.

40The Appellant informed the Board that he did not believe that MPAC took into account the negative impact on value based on limitations placed on access to Municipal services and the obligation by the owner to maintain the private lane which in his opinion also reduces the attractiveness of his property to potential buyers.

41The Appellant submitted a copy of “My Neighbourhood Properties of Interest” report which included five suggested comparable properties showing, among other things, that all five are located on Beaver Lake and have lower assessed values than his property. He further claims that because his property is also located on Beaver Lake and is similar to the five properties his property should be similarly assessed.

42The Appellant stated he agrees with MPAC to reduce the assessment by nine per cent to make the assessed value of his property equitable with that of similar lands in the vicinity. However, he thinks that the assessed value should be lower to reflect the other deficiencies.

Analysis of Evidence

Analysis of MPAC’s Evidence

43The Board has reviewed the property details pertaining to the four suggested comparable properties submitted by MPAC. The Board accepts all four suggested comparable properties as similar to the subject property because:

a. They are all waterfront properties;

b. They are all located on the same lake;

c. They are all single family detached homes.

44The Board finds that Sale B located at 338 Neville Point Road and Sale A at 470 F Neville Point Road are the most comparable to the subject property. The Board rejects the properties located at 92 Neville Point Road and 352 A Cedarstone Road as being comparable to the subject property because they are either smaller, older, and have less water frontage than the subject property.

45The Board also finds that the sale of the properties at 92 Neville Point Road and 352 A Cedarstone Road occurred at dates that are too far removed from the valuation date and this fact also makes them unacceptable from consideration.

Analysis of Appellant’s Evidence

46The Appellant advanced various arguments to support his position that MPAC did not consider various factors which have a negative impact on the value of his property. These factors were not taken into account by MPAC in establishing the value of his property and resulted in an over assessment of his property. The Board considered each argument. The following are the Board’s views and findings regarding each argument:

a. The Appellant claimed that the shoreline of his property, being irregular has a negative impact on the value of his property and further, MPAC did not factor this condition into its determination of the assessment of his property. The Appellant did not provide the Board with any evidence to demonstrate that because a portion of his 310 feet of water frontage was irregular it resulted in a diminution of value. Moreover, if in fact such was the case as the Appellant claims, he did not submit for the Board’s consideration any expert or professional analysis to indicate the amount (i.e. the quantum of value in money terms) by which his property was diminished in value. The Board is unable to place any weight on this argument.

b. The Appellant claims that the construction of a septic system on an adjacent property resulted in a modification to the grading around the septic system in such a manner that resulted in flooding to his property. The effect is that the value of his property is negatively affected and again, MPAC did not factor this in its current value assessment. The Board notes that the Appellant provided a photograph to show the location of the septic system in relation to his property and to show the change in elevation of the property (grade change) which causes flooding to his property. Firstly, the photograph in itself is rather inconclusive and it is difficult to grasp the extent of flooding that could result from the change in elevation shown in the photograph or whether any flooding occurs. Secondly, the Appellant did not provide the Board with an assessment conducted by an expert to establish a monetary amount by which the value may be negatively affected. In the absence of such expert evidence, the Board is compelled to dismiss this argument.

c. The Board considered the Appellant’s argument that the four properties he identified in his “My Neighbourhood Properties of Interest” report which shows that these properties all have assessments that are lower than his assessment. He pointed out that he personally built his home and in his view the quality of construction of his property cannot be compared to the quality to the four properties he identified in the vicinity since they were constructed by professionals. The Board has no evidence before it that places the quality designation assigned to the subject property or the suggested comparable properties into question. The Board therefore is unable to give any consideration to this argument.

d. The Board examined the argument put forward by the Appellant that in order to apply the Direct Comparison Approach in the determination of assessed value, all the data elements pertaining to both the subject property as well as comparable properties that comprise the basis for determining the current value should be properly understood, analysed and adjusted for differences so that a reasonable current value can be established. The Appellant is of the view that MPAC did not properly apply this approach and therefore the resulting assessment is excessive. The Board is satisfied that the use of valid sales of suitably comparable properties adequately takes into account all the required data elements because the principle inherent in an arm’s length open market sale is that a willing buyer considers all the data elements in his/her buying decision. The Board is satisfied that the sales of the suggested comparable properties presented by MPAC have taken the various data elements into account.

e. The Board considered the argument that the agreement between the Township of Stone Mills and the Appellant whereby the Township indemnifies the Municipality and removes any responsibility by the Municipality for maintenance or repair and will have no obligation to maintain or repair the private lane that provides access to the owner’s land, or to perform or provide any other Municipal services normally associated with public highways. The agreement further states that the Municipality will not be responsible for any loss, damage, or injury, whether direct or indirect arising from the inability of emergency services to access the owners land because of the owner’s failure to properly maintain the private lane. The agreement is registered against the title to the owner’s land and is binding on any and all subsequent owners of the land. The Board recognizes that the limitations in the agreement do present a marketing disadvantage for the Appellant if he decides to sell his property. However, the Appellant did not provide the Board with any expert/professional evaluation pertaining to the extent to which these limitations affect the value of the property in the current timeframe. The Board holds the view that the impact on value of the limitations can only be measured at a future date in an open market transaction.

f. The Board reviewed the property report (Exhibit 2) submitted by the Appellant in which he claims that the assessed values of all the properties in the report were lower than his property and since his property was within the same vicinity as these properties he believes that his assessment should be as low as theirs. The Board notes that the subject property was built in 2014 and all the properties in Exhibit 2 are considerably older than the subject property ranging from 23 years to 74 years older; in addition, the subject property’s building area is 2,718 square feet while the building sizes of all the properties in the report are less than half the size of the subject property ranging from 934 square feet to a maximum of 1,775 square feet. The Board also notes that the water frontage of the subject property at 310 feet is considerably larger than the effective water frontage of all the properties in the neighbourhood report submitted by the appellant ranging from 80 feet to 179 feet with the exception of only one at 315 feet. Further, none of the properties had a valid sale. The Board is satisfied that the properties in the Neighbourhood Properties Report submitted by the Appellant are not comparable properties for the purpose of determining the assessed value of the subject property because as already stated they are either much older, much smaller in building size and has smaller water frontages and none had a valid sale.

Determination of Current Value

47The Board agrees that the best method to determine the current value of the subject property is based on the sales of similar properties in the neighborhood.

48The Board finds that the suggested comparable properties with valid sales located at 470 F Neville Point Road and 338 Neville Point Road are sufficiently similar to the subject property and therefore suitable for determining the current value of the subject property. The average sales value per square foot of the two properties is $237.

49When the average sales value per square foot of $237 is applied to the subject property it results in a current value of $625,680 or $626,000 (rounded).

50The Board finds that for the 2016 taxation year, the current value of the subject property is $626,000.

Equity with Similar Lands in the Vicinity

51Having determined the current value as required by s. 44.(3) (a) of the Act, the Board is required by sub-paragraph (b) to 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.

52The Assessor advised the Board that she conducted an equity analysis based on sales of similar properties within 3.19 kilometers of the subject property and based on this analysis she concluded that an equity adjustment of nine per cent is warranted. The Board accepts the Assessor’s findings and applies the nine per cent reduction to the revised current value of $626,000 resulting in a current value of $569,660 or $570,000 (rounded). However, the assessor indicated that MPAC was willing to apply the 9% reduction to $551,000 which would result in a revised assessment of $501,000. The Board applies the assessor’s offer and reduces the assessment from $551,000 to $501,000.

CONCLUSION

53The Board finds that the current value of the subject property for the 2016 taxation year is $626,000.

54The Board finds that an adjustment of 9% is required for equity purposes under s. 44.(3)(b) of the Act. The Board reduces the assessment from $551,000 to $501,000 based on the Assessor’s recommendation.

55The Board notes that the current value established by the Board is higher than the assessment as established by MPAC. Neither party requested an increase in the assessment. However, at the start of the hearing the Assessor indicated that MPAC made a recommendation to further reduce the assessment of the subject property from $551,000 to $501,000. This offer was rejected by the Appellant but the Assessor indicated that the offer remains in effect. The Board accepts MPAC’s recommendation and reduces the assessment from $583,000 to $501,000.

56Accordingly, the Board reduces the assessment of the subject property from $583,000 to $501,000.