2347240 Ontario Inc. v. Municipal Property Assessment Corporation, Region 09, 2017 CanLII 46031

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE:

July 13, 2017

FILE NO.:

WR 146794

Assessed Person(s):

2347240 Ontario Inc.

Appellant(s):

2347240 Ontario Inc. and Dean Gelber

Respondent(s):

Municipal Property Assessment Corporation (“MPAC”) Region 09

Respondent(s):

City of Toronto

Property Location(s):

832 Bloor Street West

Municipality(ies):

City of Toronto

Roll Number(s):

1904-051-210-00600-0000

Appeal Number(s):

3172755

Taxation Year(s):

2016

Hearing Event No.:

673466

Legislative Authority:

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

Heard:

May 5, 2017 in Toronto, Ontario

APPEARANCES:

Parties

Representative

2347240 Ontario Inc.

Andrew Attard

MPAC

Stephen Stadelman

City of Toronto

No One Appeared

DECISION OF THE BOARD DELIVERED BY ANTHONY LaREGINA

INTRODUCTION

1The subject property is located at 832 Bloor Street West between Ossington Avenue and Shaw Street on the north side of Bloor Street in the City of Toronto. The subject property consists of a store on the main floor and residential units on the second and third floors. The total Current Value Assessment (CVA”) of the property is $1,014,000 with $609,819 apportioned to full commercial and $404,181 apportioned to full residential property classification.

2MPAC is requesting a confirmation of the CVA based on a sales comparison analysis showing that the current value of the subject property at $1,060,000 is higher than the returned value of $1,014,000.

3Andrew Attard presented no documentary evidence of his own, requesting that the CVA be reduced from $1,014,000 to $889,000 based on applying the median Assessment to Sales Ratio (“ASR”) presented by MPAC of 1.14 to the current value of $1,014,000.

ISSUES

4What is the correct current value of the subject property based on the evidence presented?

5What is the proper approach to using the ASR study as presented by MPAC? Does the median ASR of 1.14 warrant a 14% downward adjustment to indicated market value to establish current value, as requested by the assessor Stephen Stadelman and a further downward adjustment of 14% to current value under equity, as requested by Mr. Attard.

DECISION

6The Board finds that the current value of the subject property as of the valuation date of January 1, 2012 is $1,014,000.

7Further, the Board finds that no adjustment to the subject property’s current value is required to make it equitable with the assessment of similar lands in the vicinity, because an ASR above one cannot be used to make a finding of inequity in assessment.

8The Board therefore accepts MPAC’s recommendation to confirm the assessment of the subject property at $1,014,000 for the 2016 taxation year with a value of $404,181 in the Residential and $609,819 in the Commercial Property Classifications.

REASONS FOR DECISION

Determination of Current Value

9The initial task for the Board is to determine the current value of the subject property as required by s. 44.(3)(a) of the Assessment Act, R.S.O. 1990, c. A.31, as amended (“Act”), which, in part, states that “…the Board shall…determine the current value of the land.”

10Section 19.(1) of the Act states that “The assessment of land shall be based on its current value” and s. 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.”

11Section 40.(17) of the Act stipulates that “…the burden of proof as to the correctness of the current value of the land rests with the assessment corporation.”

12The issue for the Board’s determination is the current value of the subject property as of the valuation date of January 1, 2012.

MPAC’s Evidence

13Mr. Stadelman provided the Board with a comparable sales analysis of eight properties as the basis for establishing the current value of the subject property. The details on these properties are found on Exhibit 1. All eight properties are located on the north side of Bloor Street West between Clinton Street and Dovercourt Road. Mr. Stadelman asserts that the north side is the sunny side of the street and therefore more desirable while the south side is shadier and therefore considered to be a different neighbourhood that is somewhat less desirable.

14Mr. Stadelman also claims that with Ossington Avenue being the dividing line the properties towards Lansdowne Avenue are inferior in value while the properties from Ossington Avenue to Yonge Street are superior in value. Mr. Stadelman claims that all eight of the properties he has presented are good comparable properties to the subject property even though 940, 946 and 946A Bloor Street are located between Ossington Avenue and Lansdowne Avenue and therefore slightly inferior.

15Applying a time adjustment factor of 0.6% per month for each sale, Mr. Stadelman established a time adjusted sale range for the eight comparable sales between $737,800, on the low side, to $1,348,563, on the high side, as a possible range for the market value of 832 Bloor Street West based on a valuation date of January 1, 2012.

16Using the time adjusted sale values for each property, Mr. Stadelman determined the time adjusted sale value per square foot for both site and building for each property and used this information to establish the median time adjusted sale value per square foot of site area of $437.07 and for building area at $439.22.

17Mr. Stadelman further applied these two factors to determine the predicted market value of the subject property at $1,233,000 based on a split of 40% for site area and 60% for building.

18Mr. Stadelman then applied a 14% downward adjustment to the predicted market value of $1,233,000 to establish a current value of $1,060,000. Mr. Stadelman submitted that the Equity Analysis has yielded a 1.14 median ASR showing that properties on the average are assessed 14% higher than their market value and therefore he asserts that the predicted market value should be further adjusted by 14%.

19Mr. Stadelman requests that the CVA as returned at $1,014,000 is lower than the current value of $1,060,000 and should therefore be confirmed.

Appellant’s Evidence

20Mr. Attard presented no documentary evidence of his own. He is requesting that the current value of the subject property be established at $1,014,000. Mr. Attard further requested that the current value be adjusted downwards by 14% to $872,040 resulting from the equity study presented by Mr. Stadelman showing a median ASR of 1.14. Mr. Attard requests that the Board reduce the CVA from $1,014,000 to $872,040 for the 2016 taxation year.

Board’s Findings

21The thrust of the Act is to rely on current value as the basis for assessed value. 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.”

22The best evidence of current value is the sale of the subject property on or close to the valuation date of January 1, 2012 which, in this case, did not occur.

23Mr. Stadelman introduced the sale of eight comparable properties in support of current value. After careful analysis of the comparable properties, the Board will only accept the first five properties 714, 826, 804, 834 and 850 Bloor Street West as the most comparable to the subject property based on their location. These five are located closer to the subject property between Ossington Avenue and Yonge Street. The last three properties on the list 940, 946 and 864A Bloor Street West are all located between Ossington Avenue and Lansdowne Avenue and according to Mr. Stadelman, are considered to be somewhat inferior to the subject property.

24The Board will also accept Mr. Stadelman’s proposed time adjustment factor of 0.6 per month as this was the only evidence provided in support of time adjustments. Even though Mr. Attard asked the Board to reject Mr. Stadelman’s time adjustment factor, he provided no alternative evidence to address the need for time adjustments.

25Utilizing the data in evidence from the first five comparable sales, the Board will establish the median time adjusted sale value per square foot for site at $453.73 and for building at $302.25. Applying the subject property’s site area of 2,641 square feet and building area of 3,684 square feet based on a distribution of 40% to site and 60% to building, as suggested by Mr. Stadelman, results in a current value of $479,320 for site and $668,093 for building totaling $1,147,413. This appropriately puts the current value of the subject property at the upper end of the range between the sale value of 826 Bloor Street at $1,045,750 and 714 Bloor Street at $1,348,563 the two properties most similar to the subject property in terms of site and building area. The Board determines the current value of the subject property to be $1,147,413.

26Based on the fact that MPAC is not requesting an increase in assessment, the Board will therefore confirm the returned assessed value at $1,014,000, which, in this case, is the CVA as returned. This value falls at approximately 12% below its market value of $1,147,413 which is coincidentally in line with a 1.14 median ASR adjustment as presented by Mr. Stadelman.

27The current value of the subject property has been determined based on market evidence of similar properties in the vicinity. When no relevant sales or market evidence exists as in the Hutchinson v. Municipal Property Assessment Corp. Region No. 22, [2011] O.A.R.B.D. No 114, (WR 100615) and Zupancic v. Municipal Property Assessement Corp., Region 29 [2015] O.A.R.B.D. No. 174 as a last resort Members Sharma and Plumstead appropriately utilized the ASR of 1.11 and 1.12 to adjust the assessed value downward by 11% and 12%, respectively in order to establish a current value. In the case of 832 Bloor Street West, we have market evidence of the sales of similar properties in the vicinity and therefore not appropriate or correct to use the ASR to establish the current value.

Determination of Equity

28Once current value has been established, the Board must determine whether a further adjustment should be made to lower the assessment below current value in order to make it equitable with the assessments of similar lands in the vicinity.

29Section 44.(3)(b) of the Act states that:

…the Board shall…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 land.

30MPAC introduced an equity study of 28 property sales in the vicinity of the subject property yielding a median assessment to adjusted sale ratio of 1.14 which falls above the reasonable range of 0.95 to 1.05 indicating that the level of assessments is about 14% higher than the level of sales. An adjustment for equity is only appropriate when the level of assessment of similar lands is substantially lower than the level of sales, not higher. In that case, it is not equitable to the subject property to be assessed at its current or likely sale value. If the assessment to sale ratio had been below 0.95 then the appropriate downward adjustment should be made. For example, if the ASR was 0.90, then a 10% downward adjustment to current value is appropriate to ensure equity between the subject and similar properties in the vicinity.

31Mr. Attard requested a further adjustment of 14% to the current value of $1,014,000 based on the basis that the Equity Study presented by MPAC resulted in a median ASR of 1.14, which is a misunderstanding of what the ratio means and an incorrect application of the principle of equity. If all the neighbours are assessed 14% higher than their current values, then the subject property already has an advantage over those similar properties by being assessed correctly at its current value. To reduce the subject current value even further simply increases the inequity suffered by those neighbours. In this case, it could also be considered double dipping as the adjustment has already been incorporated under current value, as the returned assessment as confirmed is already 12% below its current value

32Finally, when analyzing the relationship of assessments to adjusted sale values of the eight most similar properties in evidence to establish current value, the Board finds that the median ASR is 0.94 and the average ASR is 0.97 further indicating that the relationship between assessment and sale values, is fairly close, further supporting that no equity adjustment is required.

CONCLUSION

33Based on the best available evidence, the Board will therefore confirm the assessment of the subject property for the 2016 taxation at $1,014,000 with $404,181 in Residential and $609,819 in the Commercial Property Classifications.