Brett Rideout and Ferina Murji v. Municipal Property Assessment Corporation, 2017 CanLII 59215

Assessment Review Board Commission de révision de l’évaluation foncière

ISSUE DATE: September 7, 2017

FILE NO.: WR 146895

Assessed Person(s): Brett Rideout and Ferina Murji

Appellant(s): Brett Rideout and Ferina Murji

Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 09

Respondent(s): City of Toronto

Property Location(s): 23 Kimberley Avenue

Municipality(ies): City of Toronto

Roll Number(s): 1904-096-170-010000

Appeal Number(s): 3186960

Taxation Year(s): 2015

Hearing Event No.: 667280

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

Heard: May 15, 2017 in Toronto, Ontario

APPEARANCES:

Parties	Representative
Brett Rideout and Ferina Murji	Self-represented
MPAC	Greg Tom and Stephen Stadelmann
City of Toronto	No one appeared

DECISION OF THE BOARD DELIVERED BY MARCELLE BOURASSA

INTRODUCTION

1The property is a single family detached home with 2,914 square feet (“sq. ft.”) of total building area. There is no finished basement area. The total effective lot size is 8,250. sq. ft. that includes 50 ft. of frontage. It was originally constructed in 1910. It was purchased in October 2014 for $1,300,000 and underwent an extensive “D” renovation that was completed in 2015. It has a quality class rating of 7.5. There is also an outdoor pool. It receives a negative 4% adjustment for proximity to a multi-residential property.

2MPAC issued a supplementary assessment in the amount of $542,000 (effective August 1, 2015) for improvements to the property bringing the total assessment for the 2015 taxation year to $1,482,000. Greg Tom, representing MPAC, stated that there was a recommendation to change the assessment, which is reflective of the current value assessment as at January 1, 2012, to $1,289,000 based on corrected structure data and the sale during the reconsideration discussions. The appellants rejected the revised value. Mr. Tom asks the Board to find the revised current value of $1,289,000 as correct and equitable. The supplementary assessment effective August 1, 2015 would also be reduced from $542,000 to $349,000.

3Brett Rideout and Ferina Murji represented themselves. They are of the opinion that the property is still assessed too high and should be assessed at $1,000,000 - $1,050,000.

4Does the recommended assessed value of $1,289,000 reflect the current value of the land; and should the assessment be adjusted to make it equitable with the assessments of similar lands in the vicinity?

DECISION

5As directed by s. 44.(3)(a) of the Assessment Act, R.S.O. 1990, c. A.31, as amended (the “Act”), the Board finds that the current value of the property, as of the valuation day of January 1, 2012, to be $1,289,000. Furthermore, the Board finds that there is no evidence leading to the conclusion that the current value, as determined above, is not equitable relative to the assessments of similar lands. It requires no further adjustment under s. 44.(3)(b) of the Act.

6For the 2015 taxation year, the Board reduces the supplementary assessment from $542,000 to $349,000, effective August 1, 2015.

REASONS FOR DECISION

The Legislation

7Section 1 of the Act states:

“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.

8Section 19.(1) of the Act states:

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

9Section 19.2(1) of the Act states:

19.2(1) Valuation days – 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.

10Section 34 of the Act states:

34 (1) If, after notices of assessment have been given under section 31 and before the last day of the taxation year for which taxes are levied on the assessment referred to in the notices,

(a) an increase in value occurs which results from the erection, alteration, enlargement or improvement of any building, structure, machinery, equipment or fixture or any portion thereof that commences to be used for any purpose;

(b) land or a portion of land ceases,

(i) to be exempt from taxation,

(ii) to be farm lands the current value of which is determined in accordance with subsection 19 (5),

(iii) to be conservation land the current value of which is determined under subsection 19 (5.2),

(iii.1) to be land in the managed forests property class the current value of which is determined under subsection 19 (5.2) or (5.2.1),

(iv) to be land the current value of which is based on current use under regulations made under subsection 19 (2), or

(v) to be classified in a subclass of real property;

(c) Repealed: 1997, c. 5, s. 22 (1).

(d) a pipeline increases in value because it ceases to be entitled to the reduction provided for in subsection 25 (9),

the assessor may make the further assessment that may be necessary to reflect the change, and upon receiving notice of the further assessment, the clerk of the municipality or, in the case of land in non-municipal territory, the Minister shall enter a supplementary assessment on the tax roll and the amount of taxes to be levied thereon shall be the amount of taxes that would have been levied for the portion of the taxation year left remaining after the change occurred if the assessment had been made in the usual way.

11Section 44(1) of the Act states:

Assessment may be open upon appeal

44 (1) Upon an appeal on any ground against an assessment, the Assessment Review Board or court, as the case may be, may reopen the whole question of the assessment so that omissions from, or errors in the assessment roll may be corrected, and the amount for which the assessment should be made, and the person or persons who should be assessed therefor may be placed upon the roll, and if necessary the assessment roll, even if returned as finally revised, may be opened so as to make it correct in accordance with the findings made on appeal.

12Section 44(3) of the Act states:

44(3) 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.

THE BOARD’S ANALYSIS

MPAC’s Case

13Mr. Tom stated that the revised value of $1,289,000 is based on corrected structure data and the sale of the subject property.

14The subject property is located in a unique neighborhood with a mixture of single-detached, semi-detached, townhouse and multi-residential properties. Mr. Tom is not the original assessor on the file and he provided information on the sales of six properties including three with similar frontages as the subject property and three with smaller ones. He is of the opinion that the subject property’s current value is likely above the time adjusted sale of $1,462,777 for Sale D, 74 Lyall Avenue, which shares some similarities with the subject property and, in his opinion, is the best comparable. However, he asks the Board to set the current value at the revised value of $1,289,000.

15Mr. Tom submitted an Equity Analysis (Exhibit 3) that considered 30 arm’s length sales of residential properties within 0.28 kilometres of the subject property that took place between January 2011 and December 2012. They produced a median Assessment to Sales Ratio (“ASR”) of 0.97, which is within the acceptable standard of 0.95 to 1.05 required to establish that the level of assessments of similar properties is reflective of the level of sales prices in the vicinity. Therefore, no equity adjustment is required.

Appellants’ Case

16Mr. Rideout stated that they bought the subject property in October 2014 and paid more than they should have. Ferina Murji added that it was a huge commitment for them as their family includes three young children. They expected to pay taxes based on a 2012 current value assessment of $940,000.

17Prior to moving into the property, extensive renovations were made that included new wiring and plumbing. Plans for the renovation work were filed with the City of Toronto to obtain the building permits. However, a portion of the renovation work indicated on the permit drawings was not completed including a planned addition and finishing the basement area. Mould was discovered in the basement area which had to be remediated at a cost of $8,000 - $10,000. The cost for the renovations carried out was about $200,000 and not $300,000 as indicated on the building permits. Mr. Rideout stated that the property was never inspected.

18The appellants stated that they received several Notices that are included in Exhibit 4: an Amended Property Assessment Notice (PAN) for the 2015 -2016 property tax years indicating an assessed value of $940,000 as of January 1, 2012 (Tab 3); a Property Assessment Change Notice (“PACN”) (supplementary notice) for the 2015 property tax year following completion of the major renovation indicating an increase in assessed value of $542,000 due to “improvement to property” for a revised total assessed value of $1,482,000, effective as of August 1, 2015 (Tab 4); and an Amended Property Assessment Notice (PAN) for the 2016 taxation year showing the assessed value of $1,482,000 (Tab 5).

19The appellants requested a reconsideration of the reassessment and raised various errors in MPAC’s Property Profile Report including the total floor area (2,914 sq. ft. instead of 3,104 sq. ft., three instead of four full bathrooms, an unfinished basement instead of a finished basement area and no second floor addition.

20They are of the opinion that the revised value of $1,289,000 is still too high and that the subject property should be assessed within the range of $1,000,000 - $1,050,000. Reference was made to properties included in a “My Neighborhood Properties of Interest” report included at Tab 7 of Exhibit 4 in response to how MPAC assessed the subject property. The appellants also referenced and relied on the Multi-listing Service (“MLS”) listings for six properties in the vicinity with sales around 2012 as obtained through a local real estate agent.

Current Value

21On November 5, 2015, MPAC issued a PACN (supplementary notice) for the 2015 property tax year following completion of the major renovation indicating an increase in assessed value of $542,000 due to “improvement to property” for a revised total assessed value of $1,482,000, effective as of August 1, 2015 (Tab 4). MPAC had the statutory authority to do so pursuant to s. 34 of the Act.

22The appellants requested a reconsideration of the assessment citing various errors in the property profile report and that not all of the work contemplated in either the original or revised building plans submitted to the City of Toronto had been completed.

Based upon a review of the e-mail exchanges between the original assessor and Mr. Rideout (Tab 8, Exhibit 4), it appears that the assessor made all of the corrections as per the information provided by the appellants and that information was duly considered in arriving at the revised value of $1,289,000.

23The Board will proceed to determine whether the revised value of $1,289,000 reflects the correct current value under the Act.

24The initial task of the Board is to use the best evidence available to determine the current value of the property as required by s. 1, s. 19.(1) and s. 44.(3)(a) of the Act.

25The best evidence the Board can receive of current value is an arm’s length and market-tested sale of the subject property on the valuation day or close to it. If, as in this case, no such transaction took place, the next best measure of current value is arm’s length and market-tested sales of comparable properties located nearby, as close as possible to the valuation date of January 1, 2012. The measure acts as a benchmark and a gauge of the accuracy for the assessed value of the subject property and comparable properties.

26To enable an estimate of value for the subject property to be derived from suggested comparable properties, there must be sufficient elements of similarity, in terms of physical factors such as building area, land area, land frontage, age of construction, physical condition, etcetera, so as to enable a direct comparison to be made between a suggested comparable property and the subject property.

27The Board considered the following sales:

28Sales A & B - 299 Kingswood Road - a two storey detached property originally built in 1915. It has 50 ft. of frontage, a smaller total building area (1,794 sq. ft.) and a smaller effective site area (5,000 sq. ft.) than the subject property and a lower quality class rating of 7.0. It also has a finished basement area and a detached garage. It underwent a “D’ renovation in 2010. There were two sales, the first in August 2011 for $1,199,900 (time adjusted sale (“t.a.s.”) $1,236,398), and a second one in September 2013 for $1,250,000. The Board will only consider the August 2011 sale as the second sale is too far removed from the January 1, 2012 valuation date. The Board finds this property to be inferior to the subject property given its much smaller house, the smaller lot and the lower quality class rating.

29Sale C – 3 Wayland Avenue - a two and one-half storey detached property originally built in 1908. It has 40 ft. of frontage, a similar total building area (2,708 sq. ft.) and a smaller effective site area (5,600 sq. ft.) than the subject property and a lower quality class rating of 7.0. It has a finished basement, an attached garage and an outdoor pool. It underwent a “D” renovation in 2012. There was a sale in November 2014 for $1,790,000. The Board will not consider this property as the sale in November 2014 is too far removed from the January 1, 2012 valuation date.

30Sale D – 74 Lyall Avenue - a two storey detached property originally built in 1900. It has 50 ft. of frontage, a smaller total building area (2,084 sq. ft.) and a smaller effective site area (5,600 sq. ft.) than the subject property and a lower quality class rating of 7.0. It has a finished basement and an outdoor pool. It underwent a “C” renovation in 2002 that upgraded the washrooms, the kitchen and the electrical wiring. There was a sale in July 2011 for $1,410,000 (t.a.s. $1,462,777). While this property shares many similarities, the Board finds this property to be inferior to the subject property given its smaller house, the smaller site area and the lower quality class rating.

31Sale E – 13 Kimberley Avenue - a two storey detached property originally built in 1922. It has 34 ft. of frontage, a smaller total building area (1,971 sq. ft.) and a much smaller effective site area (5,134,000 sq. ft.) than the subject property and a lower quality class rating of 7.0. It has a detached garage. It underwent a “C” renovation in 2013. There was a sale in August 2014 for $1,291,000. The Board will not consider this property as the sale in November 2014 is too far removed from the January 1, 2012 valuation date.

32Sale F – 20 Kimberley Avenue - a three storey detached property built in 2010. It has 30.35 ft. of frontage, a similar total building area (2,932 sq. ft.) and a much smaller effective site area (2,510.14 sq. ft.) than the subject property and a similar quality class rating of 7.5. It has a finished basement. There was a sale in November 2012 for $1,142,857 (t.a.s. $1,069,210). While this property is similar in terms of its building size and quality class rating, the Board finds it to be inferior to the subject property given its much smaller site area and smaller frontage.

33The appellants referred to properties included in a “My Neighbourhood Properties of Interest” report included at Tab 7 of Exhibit 4 in their response to how MPAC assessed the subject property. The Board has reviewed the report and notes that some of the single family detached properties are located in the same neighborhood as the subject property and that many have similar frontages and lot sizes. However, most are unrenovated and of a lower quality class rating than the subject property. More importantly, only two properties have sales, 74 Lyall Avenue (considered above) and 101 Glen Davis. The Board did not consider the sale for 101 Glen Davis as it is not comparable given its unrenovated condition.

34The appellants also referenced the MLS listings for six more properties in the vicinity with sales around 2012 as obtained through a local real estate agent. The Board finds that the MLS listings do not provide key elements for comparison purposes and so did not consider them. For instance, 10 Lyall Avenue would appear to have a much smaller lot and frontage, the total building area is not specified and the level of renovation and the quality class is not apparent. From the listing, there also appears to be an issue with Urea Formaldehyde Foam. Similarly for 80 Malvern Avenue, it would appear to have a much smaller lot and frontage, the total building area is not specified and it doesn’t appear to have been renovated. For 25 Main Street, it would appear to have a smaller lot and frontage, the total building area is not specified and the level of renovation and the quality class is not apparent. For 24 Juniper Avenue, it would appear to have a similar frontage but the total building area is not specified and while the MLS listing references renovation and restoration, the level of renovation and the quality class is not apparent. For 219 Willow Avenue, it would appear to have a similar frontage but the total building area is not specified and the level of renovation and quality class is not apparent. For 106 Blantyne Avenue, it has a much smaller lot and frontage, the total building area is not specified and the level of renovation and quality class is not apparent.

35The range of t.a.s. sales is $1,106, 210 for Sale F, which the Board finds to be inferior to the subject property and $1,462,777 for Sale D, which the Board finds to be inferior to the subject property given its smaller house, the smaller site area and the lower quality class rating. The Board agrees with Mr. Tom that the subject property’s current value is likely above the t.a.s. of $1,462,777 for Sale D, which shares some similarities with the subject property and is the best sales comparable in evidence. The revised value of $1,289,000 falls within this range and it appears reasonable in light of the evidence before the Board. The current value is set at $1,289,000.

Equity with Similar Lands in the Vicinity

36The Board must also consider the assessments of similar properties in the vicinity and determine whether the correct current value, as established, is inequitable relative to those assessments. If so, it should be adjusted to make it equitable, as required by s. 44.(3) of the Act.

37For purposes of establishing equity, properties do not need to be comparable; they need to be of a similar nature and within a reasonable proximity. The ASR from a reasonable sample of sold properties is usually the best indicator for that purpose.

38Mr. Tom submitted an Equity Analysis (Exhibit 3) that considered 30 arm’s length sales of residential properties within 0.28 kilometres of the subject property that took place between January 2011 and December 2012. They produced a median ASR of 0.97, which is within the acceptable standard of 0.95 to 1.05 required to establish that the level of assessments of similar properties is reflective of the level of sales prices in the vicinity. The Board also included the ASRs for Sales B, D and F into the above analysis and this produced a median ASR of 0.96 which remains within the acceptable standard. Where the subject property’s current value assessment is also at its likely sale value, then there is no basis for a finding of inequity relative to those similar properties.

CONCLUSION

39As directed by s. 44.(3)(a) of the Act, the Board finds that the current value of the property, as of the valuation day of January 1, 2012, to be $1,289,000. Furthermore, the Board finds that there is no evidence leading to the conclusion that the current value, as determined above, is not equitable relative to the assessments of similar lands. It requires no further adjustment under s. 44.(3)(b) of the Act.

40For the 2015 taxation year, the Board reduces the supplementary assessment from $542,000 to $349,000, effective August 1, 2015.