Marie France Lalande and John O’Leary v. Municipal Property Assessment Corporation, 2017 CanLII 47800

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE:

July 19, 2017

FILE NO.:

WR 147292

Assessed Person(s):

Marie France Lalande, John O’Leary

Appellant(s):

Marie France Lalande, John O’Leary

Respondent(s):

Municipal Property Assessment Corporation (“MPAC”) Region 01

Respondent(s):

The Nation Municipality

Property Location(s):

184 Route 100 East

Municipality(ies):

The Nation Municipality

Roll Number(s):

0212-001-001-00902-0000

Appeal Number(s):

3228775

Taxation Year(s):

2016

Hearing Event No.:

681478

Legislative Authority:

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

Heard:

June 15, 2017 by telephone conference call

APPEARANCES:

Parties

Representative

John O’Leary

Self-represented

MPAC

Daniel Humber

The Nation Municipality

No one appeared

DECISION OF THE BOARD DELIVERED BY J.L. WALKER

INTRODUCTION

1John O’Leary appealed the 2016 assessment of the subject property, 184 Route 100 East, which was returned by the Municipal Property Assessment Corporation (“MPAC”) at $296,000. The property is situated in a Potential Regressive Landslide Area (“hazard zone”) in The Nation Municipality. It received a negative adjustment for this factor, which was removed by MPAC when the appellant purchased the property in 2015. Mr. O’Leary submits that an appraisal he recently obtained demonstrates that a more reasonable value is $280,000.

2Daniel Humber, appearing on behalf of MPAC, states that the negative adjustment was removed from the subject property and others located within the landslide area when they transacted at values higher than their returned assessments. He submits that his market analysis demonstrates that the subject property is assessed at its current and equitable value.

3The Assessment Review Board (“Board”) must determine the current value of the subject property for the 2016 taxation year, and whether this value is equitable with the assessments of similar lands in the vicinity.

DECISION

4The Board determined that the current value of the subject property for the 2016 taxation year is $280,000 (rounded), and that no further adjustment is required to achieve equity with the assessments of similar lands in the vicinity. The Board reduces the assessment from $296,000 to $280,000 for the 2016 taxation year.

REASONS FOR DECISION

Legislation

5In making its determination, the Board is governed by the following provisions of the Assessment Act, R.S.O. 1990, c. A.31, as amended (“Act”):

6Section 19.(1) states that“…the assessment of land shall be based on its current value.” Section 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.”

7Section 19.2(1) of the Act establishes January 1, 2012 as the valuation day for the 2013 to 2016 taxation years.

8Section 44.(3) of the Act provides the test that must be applied upon an appeal on any ground against an assessment:

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.

9Section 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.

10Section 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.

Current Value

11The Board determined that the current value is $280,000 based upon the market analysis provided by MPAC. The Act requires that all property in Ontario be assessed at its current value as of a specific valuation day. Examining sales of comparable properties in the vicinity tests the accuracy of the assessment. The Board examined the range of time-adjusted sale values provided in MPAC’s market analysis, and determined that the median sale value of $280,000 ranks the subject property above properties described by Mr. Humber as smaller and inferior to the subject property, and below those he describes as superior.

12184 Route 100 East is located less than 10 kilometers north of the village of Casselman, in a rural neighbourhood. Mr. Humber states that the properties in this neighbourhood range from farms to single family dwellings situated on large lots.

13The subject property is located in a landslide zone, which is described in a letter from South Nation Conservation to Mr. O’Leary dated May 2017 (Exhibit 2). Following a sensitive clay flow at the former town site of Lemieux, Ontario in 1993, a hazard zone was created. It encompasses a 20 kilometer area along the South Nation River between Casselman and the former town site of Lemieux, and presently contains 27 homes and several roads within The Nation Municipality. A study of the hazard zone conducted in 1998 was reviewed by South Nation Conservation in 2013, and it was determined that the earlier geotechnical findings were sound. The hazard zone therefore remains as previously delineated.

14Mr. Humber provided two sets of sales in his market analysis: the sales of six properties within the hazard zone which he opines are not comparable to the subject property; and the sales of six properties in proximity to the subject property, north of Casselman, but outside of the hazard zone, which he states are comparable (Exhibit 1).

15The six properties that are located within the hazard zone are a mixture of waterfront and non-waterfront properties. This sample includes two properties that still receive a negative adjustment. When asked by the Board, Mr. Humber could not confirm the quantum of the adjustments for the properties, which he noted are property specific and higher for those situated on the South Nation River. He described the adjustments as subjective, and linked to the loss of depth on the properties.

16The sales occurred between 2010 - 2014 and were not time-adjusted. The only physical characteristic provided was lot size, which ranged from 1.68 acres to 35.32 acres. As four of the six properties included in the sample are over or under-assessed by at least 30%, the Board does not agree with the assessor that they demonstrate that MPAC’s values are reasonably accurate within the hazard zone.

17Mr. Humber stated that the subject property sold in 2015 for $300,000, but was not included in his direct sales comparison analysis of six properties as the sale occurred more than three years after the legislated valuation day of January 1, 2012. He considers two of the six properties proposed for direct sales comparison to be relatively comparable to the subject property; two properties to be superior; and two properties to be inferior.

18The time-adjusted range of sale values for the properties is $256,000 - $389,428. The two properties he considers as relatively comparable sold for $276,000 and $285,000. His descriptions and opinions of the properties (Exhibit 1) are summarized and ranked by time-adjusted sale value as follows:

• 35 Jeanpaul Road - sold for $389,182 in 2013 and considered superior; similar effective lot and similar liveable square footage, but the house is more than 20 years more modern than the subject; located closer to Casselman.

• 1419 Calypso Street - sold for $329,428 in 2013 and considered superior; located closer to Casselman and highway 401, with similar liveable square footage; has a smaller effective area but is larger more than one acre in effective lot size; is situated in a better location would fetch more than one acre near the subject property.

• 1349 County Road 8 - sold for $285,000 in 2012 and considered relatively comparable; the closest comparable in terms of structure and land; superior location closer to Highway 401 but still located in a relatively rural area.

• 944 Calypso Street - sold for $276,000 in 2012 and considered relatively comparable; lot is more than two acres smaller; superior location closer to Casselman and Highway 401; similar liveable square footage and relatively similar finishes.

• 18 Jeanpaul Road - sold for $268,000 in 2012 and considered inferior; smaller lot size by more than one acre but in a superior location; similar liveable square footage; structure 10 years older than subject.

• 681 Route 500 East - sold for $256,000 in 2012 and considered inferior due to smaller effective lot size by more than two acres; 200 sq. ft. larger structure; superior location being closer to Casselman and Highway 401.

19Mr. Humber stated that he calculated and applied time-adjustments by comparing 240 sales of residential sales in the area with their 2012 assessments, but did not include the sales or the resulting time-adjustment factors in his evidence. The Board determined that it would accept the time-adjustments notwithstanding the absence of supporting data, as they reflected a downward trend from the unadjusted values, and there is no prejudice to the appellant.

20Mr. O’Leary submits that a more reasonable value for his property is $280,000 based upon an appraisal that he obtained in May 2017. He did not include a copy of the appraisal in his evidence package. Administrative tribunals such as the Board have more latitude in applying the rules of evidence. The Board found Mr. O’Leary to be forthright and candid in his submissions, and has no reason to doubt the evidence that he presented.

21In his cross-examination of Mr. Humber, Mr. O’Leary questioned the removal of the negative-adjustment after his purchase of the subject property, which has resulted in an increase to his property tax. Mr. O’Leary notes that the hazard remains, and has limited his ability to further improve the subject property (Exhibit 2). Mr. O’Leary also stated that the property was severed in 2015 at the time of the sale. Mr. Humber stated that he was unable to confirm whether the negative adjustment remained on the abutting property. He submitted that although the property remains in the hazard zone, with restrictions on what may be built, the sale demonstrates the property’s rising value, and confirmed that MPAC has removed the negative adjustments from other properties in the hazard zone, based upon market evidence.

22Mr. O’Leary also provided Remax Realty listings for two properties, 4365 Champlain Street and 186 Route 200 Road East, which he selected to demonstrate that superior properties located outside of the hazard zone are subject to lower taxes. He stated that MyProperty was unable to generate comparable properties within the hazard zone. Mr. O’Leary confirmed that the two properties sold in 2017 but was unable to provide further detail.

23The Act requires the Board to determine current value based upon market activity at a legislated valuation date, which in this case is January 1, 2012. The Board determines that the best evidence of value before it are the six sales included in the market analysis provided by MPAC, and agrees with Mr. Humber that the best approach to this evidence is to examine the range of sale values, given the differences between the six properties.

24The Board’s review of MPAC’s evidence leads it to a different conclusion regarding current value. The Board accepts Mr. Humber’s analysis of the quality of the comparable properties, but does not agree that the assessment of $296,000 falls on a reasonable point on the range of values. Two properties are described by Mr. Humber as “relatively comparable”, and have values of $276,000 and $285,000. The Board finds that the most reasonable current value of the subject property is $280,000 (rounded), the mid-way point between these values. This value is corroborated by the appraisal obtained by Mr. O’Leary.

Equity

25The current value of the subject property can only be reduced if there is evidence that it is at a higher level than the assessments of similar lands in the vicinity. In this case, the evidence does not demonstrate that a further adjustment is required.

26The best evidence of an inequitable current value is an Assessment to Sale Ratio (“ASR”) study of a sample of similar lands in the vicinity. The sample must be sufficiently large to be statistically meaningful. An ASR is calculated by dividing the assessed value by the sale value. A resulting median ratio of 1.00 or within 5% (0.95 - 1.05) demonstrates that current values are reflective of sale prices in the vicinity. If the resulting ratio is lower than 0.95, a downward adjustment may be made to a property’s current value.

27The only evidence before the Board with regard to equity was presented by Mr. Humber, a sample of 30 sales of residential properties (single family detached homes) located in proximity to the subject property that transacted between January 2011 and December 2012 (Exhibit 1). The 30 sales in this study have a median ASR of 0.97, indicating that no downward adjustment is required to the subject property’s current value.

CONCLUSION

28MPAC’s evidence demonstrates that a current value of $280,000 is reasonable for the 2016 taxation year. The Board determines that the current value of the subject property is $280,000 for the 2016 taxation year, and that no further reduction is required to achieve equity with similar lands in the vicinity. The assessment is reduced from $296,000 to $280,000 for the 2016 taxation year.