Phillip Poichuk and Nancy Buckley-Poichuk v. Municipal Property Assessment Corporation, 2018 CanLII 102684

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: October 24, 2018

FILE NO.: WR 155950

Assessed Person(s): Phillip R. Poichuk; Nancy Buckley-Poichuk

Appellant(s): Phillip Poichuk; Nancy Buckley-Poichuk

Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 03

Respondent(s): City of Ottawa

Property Location(s): 2364 Keystone Court

Municipality(ies): City of Ottawa

Roll Number(s): 0614-600-214-23414-0000

Appeal Number(s): 3262568 and 3289209

Taxation Year(s): 2017 and 2018

Hearing Event No. 703172

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

Heard: August 23, 2018 by telephone conference

APPEARANCES:

Parties	Representative
Phillip Poichuk	Self-represented
MPAC	Jason Murree
City of Ottawa	No one appeared

MEMORANDUM OF ORAL DECISION DELIVERED BY LESLIE FLEMMING ON AUGUST 23, 2018

BACKGROUND

1Phillip Poichuk and Nancy Buckley Poichuk (the “Appellants”) are the owners of 2364 Keystone Court, Ottawa (the “Subject Property”), which is a single-family detached residential building located in the area Blackburn Hamlet east of the downtown core in the City of Ottawa. This home is a bungalow in a neighbourhood of similar buildings. The home was built in 1975.

2Pursuant to the provisions of the Assessment Act (the “Act “), the assessment of land shall be based on its current value. The Act also provides that, for the 2017 to 2020 taxation years, the MPAC is required to assess this value as of the valuation date, January 1, 2016.

3MPAC has assessed the value of the Subject Property, as of January 1, 2016, at $376,000. Consequently, the Assessment Review Board (the “Board”) must determine the value of the Subject Property on that date for the 2017 to 2018 taxation years (“current value”).

4The Appellants have filed appeals for the 2017 and 2018 taxation years with the Board, pursuant to s. 40 of the Act. It is their position that MPAC’s assessment of current value is too high and that the correct current value is between $340,000 and $355,000. At this hearing, MPAC takes the position that its assessed value is correct.

5Pursuant to s. 40(11) of the Act, the City of Ottawa is a party to this proceeding. However, the City did not advise the Board of its position on the issues raised in these appeals, and no one appeared at the hearing on the City’s behalf.

6Section 44.(3)(b) of the Act, directs the Board to reduce the current value of the Subject Property if similar lands in the vicinity have been assessed at a lower value (“equitable reduction”). The purpose of this provision is to fairly distribute of the municipal tax burden according to the value of the property possessed by each ratepayer. MPAC did not take a position on equity; nor did the Appellant. No evidence was led on this issue. Therefore, in this proceeding, this ground for appeal is not in issue.

7At the completion of the hearing, the Board reserved its decision. For the reasons that follow, the Board finds that the 2017 and 2018 tax years is $376,000 and an equitable reduction of this value is not required.

Relevant Legislation

8The relevant sections of the Act are as follows:

1. “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.

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

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 the period consisting of the four taxation years from 2013 to 2016, land is valued as of January 1, 2012.

4. For the period consisting of the four taxation years from 2017 to 2020, land is valued as of January 1, 2016.

s.32 Correction of errors, etc., in assessment roll

32. (1) Despite the delivery of any notice provided for under this Act, the assessment corporation at any time before the time fixed for the return of the assessment roll may correct any defect, error, omission or misstatement in any assessment and alter the roll accordingly.

Same, factual error only

(1.1) Despite the delivery of any notice provided for under this Act, for 2009 and subsequent taxation years, the assessment corporation may, at any time during the taxation year, correct any error in the assessment or classification of a property that has resulted from incorrect factual information about the property, and not from a change in opinion as to current value,

s.33 Change re land omitted from tax roll

33. (1) The following rules apply if land liable to assessment has been in whole or in part omitted from the tax roll for the current year or for all or part of either or both of the last two preceding years, and no taxes have been levied for the assessment omitted:

34. The assessment corporation shall make any assessment necessary to correct the omission. . . .

S. 34 Supplementary assessments to be added to tax roll

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; . . .

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.

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.

Discussion, Analysis and Findings

Issue No. 1: What is the correct current value of the Subject Property for the taxation years 2017 and 2018?

MPAC’s Evidence

9Jason Murree represented MPAC at the hearing and gave the evidence in support of the assessment corporation. He entered into evidence a Valuation Report prepared by Darren Cadeau, Property Valuation Analyst, dated April 23, 2018.

10Mr. Murree gave a brief description of the area in which the Subject Property is located – an area called Blackburn Hamlet, which is east of the downtown core of Ottawa by approximately 15 kilometers. He testified that current values of the residential properties in the area range between $340,000 and $500,000. The Subject Property is described as a bungalow with a double garage, abutting a park, and on the end of the street near a cul-de-sac. The home has three bedrooms and one and a half bathrooms. The main floor is 1,625 square feet (“sq. ft.”) with an unfinished basement the same size.

11MPAC uses a method of residential property assessment called direct sales comparison. Mr. Murree explained that the value of a property is derived by looking at similar properties in the neighbourhood which have sold near the “valuation day”. For the current assessment cycle the valuation day is January 1, 2016. In order to assess the subject property, MPAC chose six property sales in the neighbourhood (identified by MPAC as Au6-165). All proposed comparable properties were bungalows, quality of construction of 6 out of 10, all but one with garages on site, and all with three or four bedrooms and one or one-and-a-half bathrooms.

12The report provided by MPAC included an analysis of the change in sales prices over time, but Mr. Murree chose to compare the properties using actual sales prices. The following chart sets out the sales information for the six properties, and details including lot size, building size, finished basement size if any, year built, sale date and actual sale amount.

Property	Eff. Yr. Built	Eff. Site Area (acres)	Eff. Build. Area	Sale Date	Sale Price	Basement Area
Subject Property	1975	0.23	1,625 sq. ft.			1,625 sq. ft.
34 Alder Cres.	1977	0.19	1,634 sq. ft.	Sep/2017	$390,000	1,634 sq. ft. **
61 Eastpark Drive	1957	0.34	1,204 sq. ft.	Apr/2016	$378,000	1,204 sq. ft. **
12 Highpark Cres.	1968	0.14	1,530 sq. ft.	Aug/2014	$480,000	1,530 sq. ft.
40 Westpark Drive	1969	0.14	1,584 sq. ft.	Feb/2016	$492,500	1,584 sq. ft. **
22 Woodview Cres.	1969	0.14	1,514 sq. ft.	Jul/2017	$435,250	1,514 sq. ft. **
2605 Cleroux Cres.	1968	0.2	1,250 sq. ft.	Jun/2016	$442,000	1,250 sq. ft.

“sq. ft.” = “square feet” ** = Finished basement

13Mr. Murree concluded his presentation by noting that the Subject Property is valued at a similar price to the amount of money the vendors of the comparable properties sold these properties for near the valuation day. Some of the homes which sold for more than the assessed value of the Subject Property are not actually better than the Subject Property; 22 Woodview Crescent for example. This property has the same number of bedrooms, one bathroom, a slightly smaller living area, and a carport rather than a garage. It has the advantage of a partially finished basement. The selling price for this property was $435,250 in July, 2017, which is much more than the current value assessed for the Subject Property.

MPAC’s Submissions

14Relying on its evidence, MPAC submits that the correct current value for the taxation years 2017 and 2018 is $376,000. Even though the proposed comparable sales are not on the same street as the Subject Property, they are all bungalows in the neighbourhood of the Subject Property. If there are discrepancies in the information in MPAC’s files and the actual improvements on the properties used as comparable sales exceed those captured in the assessment, this would be the result of MPAC not having conducted recent inspections of some of these homes. Given the information in MPAC’s files, these six comparable properties clearly support the value given the Subject Property.

Appellant’s Evidence

15Phillip Poichuk represented the Appellants and testified on behalf of himself and Nancy Poichuk. He began by noting that the homes in the neighbourhood are not expensive homes, but he thinks the comparable homes provided by MPAC are superior to his own. When he tried to sell his property some time ago he was not successful. Mr. Poichuk objected to MPAC’s choices of comparable residential properties because, in his opinion, once you get out of his neighbourhood, you are not really in Blackburn Hamlet. Most of the homes in his neighbourhood were built in or around 1975 and they were selling for similar prices at the time. They were not expensive homes, and Mr. Poichuk objected to the fact that MPAC has inflated the values over time.

16Mr. Poickuk testified that the most comparable home in his view is 2605 Cleroux Crescent with the double garage like his own. The difficulty in using it as a comparable sale is that it has been rebuilt inside and out and has a lock stone driveway that he estimated cost $100,000 as well as a spa in the back yard. It is worth much more than his home and is therefore not an appropriate comparable property.

17Mr. Poichuk testified that he only knows of one other bungalow in the neighbourhood which sold for $325,000 or $329,000: 2411 Cleroux Crescent. However, he concedes that this property is inferior to his own.

18Mr. Poichuk also indicated that MPAC had the dimension of the property wrong because it is an irregular-shaped lot: 75’ X 53’ X 120’ X 48.37’ X 150’. The lot appears to be large, but the area does not allow him to install a swimming pool because there is insufficient space.

19His property also abuts a school which is constantly being threatened with demolition. This doesn’t give him much confidence in the value of the property because the future of the abutting lot remains uncertain.

Appellants’ Submissions

20Relying on his evidence, the Appellant submits that the correct current value for taxation years 2017 and 2018 is $340,000 to $355,000.

Findings on Current Value

21The very best way of determining the current value of a property is if it has recently been sold. That gives a market-tested value for the property which is essentially its current value at the time of the sale. Where a sale has not taken place anywhere near the valuation day, as here, the Board has to look to other methods of proving value. Certainly the direct sales comparison method is a “tried and true” method of determining value in relation to residential real estate, but it is not the only method. However, the Board has to base its decision on the evidence provided by the parties, and in this case, the only evidence of value comes from comparing the Subject Property with other bungalows sold in the neighbourhood.

22Other methods of proving real estate values include obtaining appraisals or opinions of value from real estate professionals and entering these into evidence. In the present case, while Mr. Poichuk gave evidence respecting his own property and the neighbourhood, he did not tie any of his evidence into the value of his property. Mr. Poichuk concluded that “the comparative value system doesn’t work”, but provided no examples to back up his hypothesis, nor to explain why $340,000 to $355,000 would be a more appropriate value for the Subject Property.

23Because MPAC provided comprehensive evidence of six residential property sales in the area, they were able to support their estimate of value of the Subject Property. It is clear from Mr. Poichuk’s testimony and the evidence of comparable properties that the Subject Property has not been improved with a finished basement, an in-ground pool, lockstone driveway or spa. But in comparing it with the proferred six sales, the subject property has a larger lot than five the proposed comparable sales, a larger garage than four of the six comparable properties, and a larger building area than five of the six comparable properties. The Subject Property would not be valued at very much less than the comparable properties with finished basements for the reason that it has the large lot and larger building area than most of the others. For example, 61 Eastpark Drive, a smaller home with a larger lot than the subject property, which has a finished basement, sold for $378,000 in April 2016. The Subject Property is a newer home with 430 sq. ft. more area than the 61 Eastpark Drive property. The Subject Property is probably worth almost the same amount as this proposed comparable home. Given these details about the Subject Property, MPAC has supported the current value at $376,000, and the Board agrees.

DECISION

24The correct current value of the Subject Property is $376,000 for the 2017 and 2018 taxation years. The Board hereby confirms the assessed value of $376,000. An equitable reduction of the value of the Subject Property pursuant to s. 44.(3)(b) of the Act is not required.