Ross v. Municipal Property Assessment Corporation, 2017 CanLII 3652

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: January 25, 2017 FILE NO.: WR 145047

Assessed Person(s): Lorne Douglas Ross and Leona Rose Ross Appellant(s): Lorne Douglas Ross and Leona Rose Ross Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 5 Respondent(s): Township of Central Frontenac

Property Location(s): 1071 Gray Rock Lane Municipality(ies): Township of Central Frontenac Roll Number(s): 1039-060-010-04103-0000 Appeal Number(s): 3183561 Taxation Year(s): 2016 Hearing Event No.: 642166

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

Heard: November 30, 2016 in Sydenham, Ontario

APPEARANCES:

Parties	Counsel/Representative
Lorne Douglas Ross and Leona Rose Ross	Douglas Lorne
MPAC	Roxanne Poulain and Emily Corsi
Township of Central Frontenac	No one appeared

DECISION OF THE BOARD DELIVERED BY MARILYN SHARMA

INTRODUCTION

1The subject property is a single family, two-storey detached residence located at 1071 Gray Rock Lane in Central Frontenac.

2The subject property is located on water and has a water frontage of 150 feet. The site area of the subject property is 1.05 acres. The residence was constructed in 1966 and has a building area of 1,136 square feet (“sq. ft.”). The building was renovated in 2005. A detached garage with a building area of 974 sq. ft. built in 2013 is located on the subject property.

3The assessed value of the subject property for the taxation year 2016 is $180,000.

4The Assessor indicated that MPAC revised the assessment of the subject property to $174,000 as a result of the Request for Reconsideration (“RFR”) process.

5The Appellants have refused the offer above. However, MPAC indicated that the offer remains in effect.

ISSUE

6The issue before the Assessment Review Board (“Board”) is to determine whether the subject property is over-assessed.

DECISION

7The Board finds that the current value of the subject property for the taxation year 2016 is $176,000 (rounded).

8The Board has made reference to similar lands in the vicinity and finds that no reduction is required for equity under s. 44.(3)(b) of the Assessment Act, R.S.O. 1990, c. A.31, as amended (“Act”).

9At the start of the hearing the Assessor indicated that an offer was made to the Appellant during the RFR process to reduce the assessment from $180,000 to $174,000 to remove one half bathroom that was incorrectly assessed and to change the renovation type to a less extensive one. While the offer was rejected by the Appellants, it still remains in effect.

10The Board accepts the Assessor’s recommendation to reduce the assessment from $180,000 to $174,000.

11Accordingly, the assessment of the subject property is reduced from $180,000 to $174,000 for the 2016 taxation year.

REASONS FOR DECISION

The Legislation

12For 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:

13Section 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.

14Section 19.(1) of the Act states:

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

15Section 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.

16Section 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.

17Section 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.

18Section 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

[19] Under 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

20The best measure of current value is an arm’s length and market tested sale of the subject property on the valuation day of January 1, 2012, or close to it. If no such transaction took place, a further measure of current value is the 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

21The Valuation Report submitted into evidence by the Assessor provided three suggested comparable properties shown in Table 1:

Table 1 MPAC’s Suggested Comparable Properties

Roll Number	Site Area	Building Area	Year Built	Water Frontage (ft.)	Sale Amount ($)	Sale Date
1071 Gray Rock Lane (subject property)	1.05	1,136	1966	150
3575 Salmon River (Sale A)	0.17	975	1993	106	155,000	July 2012
6036 Arden Road (Sale B)	0.77	1,263	1925	384	125,500	September 2012
6076A Arden Road (Sale C)	0.87	1,718	1868	285	115,000	July 2011

22The Assessor compared the key characteristics of each of the suggested comparable properties submitted by MPAC with that of the subject property as follows:

• 3575 Salmon River This suggested comparable property is newer than the subject property, it is smaller both in the water frontage and lot size and the property can only be accessed by water.

• 6036 Arden Road This suggested comparable property has more water frontage than the subject property, its lot size is somewhat smaller, the building and garage is 41 years older and access to the property is year round and maintained by the Township.

• 6076A Arden Road The building on this property is 100 years older than the subject property, the site area is slightly smaller, the water frontage is larger and access to the property is year round and maintained by the Township.

23The Assessor stated that in her opinion Sale A located at 3575 Salmon River is considered to be most comparable to the subject property because it has a similar building size and closest in age. This property also has a rocky shoreline similar to the subject property.

24The Assessor informed the Board that the property at 3575 Salmon River (Sale A) sold for an adjusted sale price of $154,481. The Assessor concludes that after taking into account the accessibility difference between the subject property and Sale A, in addition to the lack of a garage on Sale A, she estimates that the market value of the subject property is around $190,000. The Assessor stated that on the basis of this analysis, the current value assessment of the subject property at $174,000 is reasonable.

Appellant’s Evidence

25The Appellant submitted two suggested comparable properties located at 1121 Gold Russ Road and 1061 Gray Rock Road.

26The Appellant informed the Board that the purpose was to draw a comparative market value analysis of the two suggested comparable properties in order to arrive at an assessed value for the subject property.

27The Appellant also provided photographs of the exterior of his two suggested comparable properties.

28The Appellant provided a copy of a Comparable Property Report from MPAC which he obtained during the RFR process showing six properties that MPAC purportedly used in the reconsideration process.

29The Appellant also provided a copy of a Comparable Property Report of three suggested comparable properties located at 2813 Clarendon Road, 17603 Highway 509 and 2138 Bell Line Road to compare the sales and assessments to the assessment of his property.

Analysis of Evidence

Analysis of MPAC’s Evidence

30The Board reviewed the details of the three suggested comparable properties submitted by MPAC and accepts the properties located at 3575 Salmon River and 6036 Arden Road as being sufficiently similar in age and building size for determining the current value of the subject property.

31The Board rejects the property located 6076A Arden Road from consideration because it is over 100 years older than the subject property and the building size and water frontage is larger than the subject property.

32The Board accepts the sale of the properties at 3575 Salmon River and 6036 Arden Road as valid sales.

Analysis of Appellant’s Evidence

[33] The Board considered the various pieces of information submitted by the Appellant but could not give credence to them because of the following: i. The accuracy of the information used by the Appellant could not be verified; ii. The analysis conducted was based on data and measurements that were not accurate but were estimated by the Appellant; iii. The photographic evidence of the exterior of the properties located at 6036 Arden Road and 6076A Arden Road was not accompanied by any information that would support his claim.

34The Board considered the evidence submitted in the two comparable property reports and is unable to give them any consideration because they are not similar and none of these properties is located on water.

Determination of Current Value

35The 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 neighbourhood.

36The Board has accepted the sales of the suggested comparable properties submitted by MPAC located at 3575 Salmon River and 6036 Arden Road and determines that the average value per square foot is $129. When the average value per square foot is applied to the subject property, it results in a current value of $146,544 or $147,000 (rounded).

37The Board accepts the Assessor’s recommendation that a value of $29,000 should be added to the current value of the subject property in 2016 based on the construction of a garage in 2013.

38Accordingly, the Board finds that the current value of the subject property for the 2016 taxation year is ($147,500 plus $29,000) $176,000.

Equity with Similar Lands in the Vicinity

39The Board is required under s. 44.(3) sub-paragraph (b) of the Act, 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.

40For purposes of establishing equity, properties do not need to be comparable; they need to be of a similar nature and within a reasonable proximity.

41The Assessment to Sales Ratio (“ASR”) provides the Board with factual information regarding the trends in assessment of properties in the same neighbourhood. That is to say, it readily identifies whether MPAC is in general, over or under assessing properties in the same neighbourhood and make adjustments. An ASR in excess of 1.0 would suggest that MPAC is assessing properties greater than that present in the marketplace. Similarly, an ASR of less than 1.0 means that MPAC is assessing properties lower than that present in the marketplace. The Board considers a value of five percentage points to be within an acceptable range.

42For equity purposes the Assessor presented 30 properties located within 12.91 kilometers from the subject property. Of the 30, the Board accepts the 12 properties with sales occurring in 2011 and 2012 and rejects the remaining 18 sales in 2009 and 2010 as being too far removed from the valuation period. The average ASR of the 12 valid sales is 1.12. A value within five percentage points is usually considered an acceptable value. In this case the average ASR of 1.12 suggests that MPAC’s methodology may be producing assessments 12% higher than sales. In this case the ASR of 1.12 indicates that properties are not being undervalued and hence a reduction as per s. 44.(3)(b) is not required. The Board therefore finds that no adjustment is required for equity in accordance with s. 44.(3)(b) of the Act.

CONCLUSION

43The Board finds that the current value of the subject property for the taxation year 2016 is $176,000 (rounded).

44The Board has made reference to similar lands in the vicinity and finds that no reduction is required for equity under s. 44.(3)(b) of the Act.

45At the start of the hearing the Assessor indicated that an offer was made to the Appellant during the RFR process to reduce the assessment from $180,000 to $174,000 to remove one half bathroom that was incorrectly assessed and to change the renovation type to a less extensive one. The offer was rejected by the Appellants but still remains in effect. The Board accepts the recommendation to reduce the assessment from $180,000 to $174,000.

46Accordingly, the assessment of the subject property is reduced from $180,000 to $174,000 for the 2016 taxation year.