Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: August 11, 2017

FILE NO.: WR 147692

Assessed Person(s): Arwa Mhawi

Appellant(s): Arwa Mhawi

Respondent(s): Municipal Property Assessment Corporation (“MPAC”), Region 16

Respondent(s): Town of Bradford West Gwillimbury

Property Location(s): 43 Hulst Drive

Municipality(ies): Town of Bradford West Gwillimbury

Roll Number(s): 4312-010-001-33512-0000

Appeal Number(s): 3177955 and 3176955,

Taxation Year(s): 2015 and 2016

Hearing Event No.: 680564

Legislative Authority: Sections 34 and 40 of the Assessment Act, R.S.O. 1990, c. A.31, as amended

Heard: June 28, 2017 in Bradford, Ontario

APPEARANCES:

Parties	Representative
Arwa Mhawi	Self-represented
MPAC	Patricia Thompson
Town of Bradford West Gwillimbury	No one appeared

DECISION OF THE BOARD DELIVERED BY DAN WEAGANT

INTRODUCTION

1The subject property is a single family dwelling, constructed in 2015. Prior to construction in 2015, the undeveloped lot had been assessed at $139,000. MPAC applied a supplementary assessment to the property in the amount of $479,000, representing the value of a newly constructed dwelling. The effective date of the supplementary assessment is August 10, 2015.

2For the 2016 taxation year, MPAC returned a value of $618,000, reflecting the original lot value and the supplementary assessment applied in August 2015. At the conclusion of the Request for Reconsideration process undertaken by the parties, the 2016 returned value was reduced twice with a result of $569,000. MPAC recommends this reduced value as the correct assessment for the 2016 taxation year, with a corresponding value of $430,000 for the supplemental assessment of 2015.

3The reduction in value recommended by MPAC reflected a nuisance factor related to an adjacent Right of Way used by the public to access the adjoining park, a smaller attached garage than originally assessed and a downward adjustment reflecting the subject property’s relatively recent construction date.

4The Appellant believes these reduced assessments are still too high, leading to the appeals.

5There is no dispute among the parties with respect to the value applied to the undeveloped lot or the effective date of the supplementary assessment.

ISSUES

6There are three questions the Assessment Review Board (“Board”) must answer in making its determination:

1. What is the correct current value of the subject property for the 2016 taxation year?
2. Does the current value determined require a reduction when reference is made to the assessments of similar properties in the vicinity?
3. What is the value of the supplementary assessment applied by MPAC, effective August 10, 2015?

DECISION

7The Board finds that:

1. The current value of the subject property is $567,000.
2. There is no evidence to suggest that a reduction in this value is necessary to make it equitable with the assessments of similar properties in the vicinity.
3. The value of the supplementary assessment, effective August 10, 2015 is $428,000.

REASONS FOR THE DECISION

What is the current value of the subject property for the 2016 taxation year?

8The initial task for the Board is to determine the current value of the subject property. Section 19.(1) of the Assessment Act (“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.”

9The Act also provides a common valuation day for each four year assessment cycle. For the 2016 taxation year, the valuation day is January 1, 2012.

10Patricia Thompson, on behalf of MPAC, provided the Board with a comparable sales analysis of three properties to support her recommended current value of $569,000. The first comparable property is 47 Royal Court which sold in December of 2011 for $620,000. The second comparable property is 17 Regency Court which sold in February 2012 for $500,000. The third comparable property is 24 Royal Court which sold in September 2012 for $524,000.

11In order to make these three sales directly comparable with respect to sale value, Ms. Thompson undertook a time adjustment study, whereby the sales of 240 residential properties that sold within 12 months of the valuation date are compared to arrive at a time adjustment factor for each month from January 1, 2011 through December 2012. Resultant time adjustment factors were applied to each of the three comparables, based on their month of sale. The resulting time adjusted sale values of the comparable properties are $623,066, $492,738 and $494,953 respectively.

12Ms. Thompson considers the value of the subject property to be superior to that of 17 Regency Court and 24 Royal Court, while she considers the value of the subject property to be inferior to the value of 47 Royal Court. Ms. Thompson testified that these three properties were selected for comparison to the subject property owing to their similarity in use, location, character and the proximity of their sale dates to the valuation date. All three sales occurred within nine months of January 1, 2012.

13Ms. Thompson stated that she was guided by market conditions when she applied adjustments to the subject property for its proximity to the adjacent park, the adjacent municipal servicing right of way and the fact that the subject property has a smaller attached garage than the comparable properties in her study.

14Ms. Thompson’s position is that the three sales serve to provide a range of value that the subject property should fall within (between $494,953 and $623,066) and accordingly, the recommendation of $569,000 is both reasonable and correct.

15Arwa Mhawi submits that while the nature, condition and location of the comparables are generally similar to her property, sufficient consideration of the following differences have not been adequately accounted for in MPAC’s recommendation. Specifically, she submits that the subject property has:

• a smaller lot;
• a rear yard area that is relatively small and restricted in its use;
• a rear yard with a high rocky slope;
• a smaller living area;
• a smaller attached garage
• no swimming pool;
• a shared rear yard boundary with the narrow end of a much used public park and pathway;
• an abutting right of way, owned by the municipality which is used frequently by the public as an informal walkway to the adjacent park.

Ms. Mhawi submits that these last two points create an ongoing nuisance that affect her use and enjoyment of the property and that these conditions are not present in any of the comparable properties in MPAC’s study.

16Ms. Mhawi also provided two documents drawn from MPAC’s website, entitled ‘My Neighbourhood Sales’ and ‘My Neighbourhood Properties of Interest’ (Exhibits 4 and 5 respectively). These two documents include details of some 39 properties in the area. Ms. Mhawi believes the assessment information contained in the details of these 39 properties indicate that the subject property is assessed too high. She also provided the Board with MLS real estate listings of 12 properties that sold in 2011 and 2012 (Exhibit 6), showing that sale values in the area are generally lower than MPAC’s recommended value.

The Board’s Analysis

17The best evidence of current value is the sale of the subject property on or close to the valuation day of January 1, 2012. In the absence of such a sale, the best evidence is the sale of similar properties that have sold at or near the valuation day.

18The Board has 42 properties comparison in evidence; three from MPAC and 39 from the Appellant. The Board disregards the vast majority of the Appellant’s comparables. Those reflected in the real estate listings do not have sufficient data to make a meaningful comparison to the subject property. In addition, only three of the properties in Exhibits 4 and 5 were sold within 12 months of the valuation day, being the most reliable from the purposes of comparison to the subject property. These three properties are 39 Hulst Drive, 12 Gres and 14 Gres.

19The Board’s chief concern with MPAC’s findings is that the range provided by Ms. Thompson is approximately $128,000. While the recommendation from MPAC falls roughly half way between the high and low and of the defined range, there is no rationale provided as to why the recommended value could not be, for example $50,000 higher or lower and not still be correct, as those values would also fall within MPAC’s defined range.

20Accordingly, the Board looks to the details of the comparable properties before it to determine if the evidence suggests a more refined value. The six properties that sold within 12 months of the valuation day, and their details appear in Table A.

TABLE A

	43 Hulst (subject property)	17 Regency	47 Royal	24 Royal	39 Hulst	12 Gres	14 Gres
Site Area	6,250 sq. ft.	10,800 sq. ft.	13,500 sq. ft.	10,800 sq. ft.	6,750 sq. ft.	7,000 sq. ft.	7,500 sq. ft.
Living Area	2,587 sq. ft.	2,759 sq. ft.	3,192 sq. ft.	2,610 sq. ft.	2,123 sq. ft.	2,512 sq. ft.	2,512 sq. ft.
Year Built	2015	1988	1993	1988	1988	1988	1988
Sale Date	N/A	February 2012	December 2012	September 2012	June 2011	July 2011	May 2011
Sale Price	N/A	$500,000	$620,000	$524,900	$365,000	$449,000	$436,000
Time adjusted sale (TAS) price	N/A	$492,738	$623,066	$494,953	$384,710	$470,000	$460,852
TAS/sq. ft.	N/A	$178.59	$195.20/ $191.75 adjusted for pool	$189.64/ $185.42 adjusted for pool	$181.21	$187.10	$183.46
2012 CVA	569,000 (recommended)	$474,000	$649,000	$521,000	$431,000	$419,000	$417,000
CVA/sq. ft.	$171.80	$203.32	$199.62	$203.01	$166.80	$166.00
Notes	Abuts park and right of way	Abuts park; pool	Pool

The only variable that has a specific value in evidence is the presence of an outdoor pool. Ms. Thompson stated that market studies show the presence of an outdoor pool adds approximately $11,000 to the value of a property that is otherwise identical. For this reason, the Board applies a downward adjustment of $11,000 to the time adjusted sale values for 47 Royal and 24 Royal in its determination. With the pool adjustment, the Time Adjusted Sales (“TAS”) values for 47 Royal and 24 Royal are $612,066 and $483,953, or $191.75 per sq. ft. and $185.42 per sq. ft. respectively.

21The resulting median per sq. ft. TAS value of the six comparable properties is $184.44 per sq. ft. When this value is applied to the subject property dwelling size of 2,587 sq. ft. the result is $477,146 or $477,000 rounded. Without the pool adjustment, the median per sq. ft. TAS value of the six comparable properties is $185.28, resulting in a value of $479,319 or $479,000 rounded. This represents a $2,000 difference when the value of the pools in the sample are accounted for.

22The only remaining element in evidence that shows the subject property to be inferior to the comparables is its smaller rear yard, with the associated restriction in use.

23Ms. Mhawi suggested that the smaller rear yard should result in a further reduction in value. However, she was unable to quantify the value of such a reduction. She was also unable to refute the adjustments made by Ms. Thompson that are reflected in the recommended value before the Board.

24MPAC’s ‘Property Profile’ indicates that adjustments have been made for the adjacent park, the presence of a steep slope in the rear yard and the panoramic view from the subject property. The Board is satisfied that, aside from an adjustment for the value of an inground pool on two of the comparable properties in evidence, MPAC has accounted for the variables between the subject property and the comparable properties in evidence.

25The Board finds that the current value of the subject property is $567,000, which provides for a $2,000 reduction resulting from the adjusted per sq. ft. values of the two comparable properties with swimming pools.

Does the current value determined require a reduction for it to be equitable with the assessments of similar lands in the vicinity?

26Once 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.

27Ms. Thompson submitted an equity study that included the assessments and time adjusted sale values of 30 similar properties in the vicinity. The ratio of the assessments for each property to its time adjusted sale price is determined and this ratio is called an Assessment to Sale Ratio, (“ASR”). Ms. Thompson testified that using an ASR is the most common approach to determining equity of assessment. She also testified that the International Association of Assessing Officers (IAAO) has set a standard range for median ASR of 0.95 to 1.05, where no adjustment of assessment for equity would be required. Ms. Thompson’s study determined that the median ASR of the properties in the study is 0.97, meaning that no equity adjustment is required.

28Ms. Mhawi did not refute these findings. Accordingly, the Board accepts Ms. Thompson’s conclusion that no equity adjustment is necessary in this case.

What is the value of the supplementary assessment?

29The parties agree that the pre-developed value of the lot was $139,000 before the supplementary assessment is applied. Therefore, the value of the supplementary assessment is the current value found above, less the undeveloped lot value, or $428,000.

CONCLUSION

30The Board finds that the current value of 43 Hulst Drive is $567,000. The Board further finds that there is no necessity to reduce this value for the purposes of equity of assessment.

31Accordingly, the assessment for the 2016 taxation year is reduced from $618,000 to $567,000, in the Residential property class. The value of the supplementary assessment, effective August 10, 2015 is reduced from $479,000 to $428,000, in the Residential property class.