Assessment Review Board
Commission de révision de l’évaluation foncière
ISSUE DATE: October 24, 2018
FILE NO.: WR 154296
Assessed Person(s): Romlek Enterprises Inc.
Appellant(s): Romlek Enterprises Inc. and Thomas Jakobek
Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 09
Respondent(s): City of Toronto
Property Location(s): 36 Glen Manor Drive
Municipality(ies): City of Toronto
Roll Number(s): 1904-091-140-05001-0000
Appeal Number(s): 3235877 and 3299489
Taxation Year(s): 2017 and 2018
Hearing Event No. 700864
Legislative Authority: Section 40 of the Assessment Act, R.S.O. 1990, c. A.31, as amended
Heard: June 13, 2018 in Toronto, Ontario
APPEARANCES:
Parties
Representative
Romlek Enterprises Inc.
Thomas Jakobek
MPAC
Chantelle MacMillan-Zembik
City of Toronto
No one appeared
DECISION OF THE BOARD DELIVERED BY LESLIE FLEMMING
Background
1Romlek Enterprises Inc. is the owner of 36 Glen Manor Drive (the “Subject Property”), which is a residential duplex located in the Beaches district of Toronto. The general reassessment of the property resulted in an assessment of $1,311,000. The Appellants seek a reduction in this value, arguing that it is too high. The corporate appellant is represented by Thomas Jakobek, an owner of the corporate appellant.
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, 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 $1,311,000 in the residential property class. The Board must determine the value of the Subject Property on January 1, 2016, for the 2017 and 2018 taxation years (“current value”).
4Romlek Enterprises Inc. and Thomas Jakobek, (the “Appellants”) have filed appeals for taxation years 2017 and 2018 with the Assessment Review Board (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 $1,238,852 and $1,270,085. At this hearing, MPAC takes the position that its assessed value is correct.
5Pursuant to s. 40(11) of the Act the City of Toronto 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 the municipal tax burden according to the value of the property possessed by each ratepayer. MPAC took the position that it’s Equity Analysis Study, based on 50 sales of residential properties in the vicinity, showed that the level of assessment was 97 per cent, well within an acceptable margin of error tolerated in previous Board decisions. MPAC takes the position that an equitable reduction is not required. The Appellant did not assert that an equitable reduction is required. Therefore, in this proceeding, equity 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 assessment for 2017 to 2018 tax years is $1,271,000. Pursuant to section 44(3)(b) of the Act, an equitable reduction of this value is not required.
Relevant Legislation
- “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.
9Section 19.(1) of the Act states:
19.(1) Assessment based on current value. – The assessment of land shall be based on its current value.
10Section 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:
- For the period consisting of the four taxation years from 2017 to 2020, land is valued as of January 1, 2016.
11Section 40.(17) of the Act states:
40.(17) 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.
12Section 44.(3) of the Act states:
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.
Issue
13The only issue is the correct current value of the Subject Property for the 2017 and 2018 taxation years.
DISCUSSION, ANALYSIS AND FINDINGS
MPAC’s Evidence
14Chantelle MacMillan-Zembik represented MPAC, and Chris Vallier testified on behalf of MPAC. Mr. Vallier is a Property Valuation Analyst for MPAC and the author of the Valuation Report and Equity Analysis Reports entered into evidence with his testimony.
Preliminary Matter
15The Appellants had asked to have both of their properties, 36 and 38 Glen Manor, heard together on the ground that the two properties were virtually the same, although admittedly not identical. The motion to hear the properties together was denied on the ground that they were not identical in all respects, and would therefore not be suitable to being heard at the same time.
16Mr. Vallier began his testimony for MPAC by describing his work history with the assessment corporation for over 21 years. He was not being qualified as an expert witness, but rather as someone who has represented the assessor frequently before the Board and who has personal knowledge of the subject properties since 1998. He is the author of the valuation report dated February 28, 2018.
17MPAC describes the Subject Property as a triplex – a semi-detached building purpose-built in 1927. The lot is 22.37 feet in width and 100 feet in depth. In 2006 the current owner renovated extensively, putting in new kitchens and bathrooms, and upgrading wiring. The entire building is 2,461 sq. ft. It is generally a two-storey building with a small third storey of 252 square feet (“sq. ft.”).
18For its valuation, MPAC used the direct sales comparison method, a method of computer assisted valuation where similar properties were compared. He selected duplex-style buildings with separate stairways and entrances in the area south of Queen Street and in the area commonly known as the Beaches.
19MPAC used 12 comparable residential buildings in its assessment. All the buildings housed three separate living quarters, and that the comparable properties proposed by MPAC were chosen because they were similar in size and in improvements. All the buildings were built in the 1920s, except 107 Kenilworth, which was built in 1865. They had all been improved, renovated, or renewed between 1990 and 2015, except the Kew Beach property and 80 Wineva Avenue, which were both renewed in 1980.
20The proposed comparable properties were all situated on lots that were between 22 and 27 feet wide, with depths of 90 to 108 feet, with two exceptions: 28 Wineva Avenue being 124.02 feet in depth, while 58 Hubbard Boulevard being 75.28 feet in depth.
21In cross-examination, Mr. Vallier admitted that he had not visited each of the 11 comparable properties he was using, but added that he had fully investigated each proposed property. While there were originally 12 properties produced as proposed comparable properties, MPAC withdrew 27 Hammersmith Avenue, indicating that it is dissimilar and a higher rated building in construction quality. The Subject Property and the remaining properties selected as comparable property sales by MPAC are all a class 6 or 6.5 in construction quality according to MPAC’s rating system.
22Some of the details of the selected 11 comparable property sales chosen by MPAC appear in the following chart. Added to them, at the bottom, are two comparable property sales in the same vicinity proposed by the Appellant. The comments made by both parties in relation to the total of thirteen property sales are contained in the chart. MPAC advised that the following five properties were the most comparable to the Subject Property: 46 Glen Manor Drive; 45 Wineva Avenue; 60 Glen Manor Drive; 18 Hammersmith Avenue; and 28 Wineva Avenue. By using the sales values of these five properties primarily, Mr. Vallier was able to determine an assessment for 36 Glen Manor Drive in the amount of $1,311,000.
MPAC’s DIRECT SALES COMPARISONS
Duplex and Triplex Properties near the Beaches
Address
Year built/ Year last reno’d
No. of Units
Time-adjusted Sales Price
Proximity to Subject Property
MPAC’s comments
Appellants’ comments
Subject Property
1927/2006
3
46 Glen Manor
1927/2015
3
$1,238,852
0.163
Slightly smaller so less valuable
Good comparable.
45 Wineva Ave.
1925/1990
3
$1,270,085
0.054
Older, very close by, good comparable.
3 bedroom, not 2 bed property; 12 feet longer; much superior.
107 Kenilworth Ave (2 sales)
1865/2014
3
$1,533,044 (2015) $1,435,000 (2017)
0.5869
Superior; newer reno.; larger lot
Single Family detached; not comparable.
60 Glen Manor
1927/2014
3
$1,329,215
0.1643
Good comparable; smaller; les parking; newer renos.
Single family detached; not comparable.
18 Hammersmith Ave.
1929/2012
3
$1,423,908
0.1237
Very good comparable; near SP; recent reno.
Good comparable, but closer to lake.
80 Wineva Ave.
1928/1980
3
$1,637,553
0.0878
Larger lot; detached property; more valuable
Detached duplex; stands on its own.
28 Wineva Ave.
1929/1999
3
$1,393,375
0.1484
Good comparable, longer lot, good finishings and more parking.
3, not 2 bedroom property; 12 feet longer; much superior
83 Hammersmith Ave.
1928/2012
$1,317,109
0.1187
Inferior to SP; somewhat smaller; coded as single family
Single family detached; not comparable
58 Hubbard Bvld.
1925/1990
3
$1,838,921
0.1824
Superior due to location across from park; same use
Prime location facing lake; therefore not comparable.
20 Kew Beach Ave.
1914/1980
3
$1,317,373
0.8537
Significantly smaller; despite location by park, is inferior.
Prime location facing lake; therefore not comparable.
21 Hammersmith Ave. (Appellant Comparable)
No information
No information
$1,000,000 (not time adjusted)
No information
Had not been severed; one building. Not comparable.
Excellent comparable; (no sale date given)
58 Scarborough Beach Bvld. (Appellant Comparable)
No information
No information
$1,061,250 (not time adjusted)
No information
Discarded - not upgraded like the other sales.
Good comparable sale as very similar to my building.
MPAC’s Submissions
23MPAC submitted that, on the issue of valuation, the use of direct sales comparisons gave the most accurate result when it came to residential properties. By selecting 11 properties to compare with the Subject Property, MPAC was increasing the number of properties and thereby making the estimate of value more accurate than if only a few comparable property sales were produced. MPAC concluded that the value of $1,311,000 was supported by the comparable sales they had used.
Appellants’ Evidence
24Thomas Jakobek represented the Appellants and testified on behalf of the Appellants.
25The Appellants began by giving a brief history of the neighbourhood. Close to an amusement area called Scarborough Fair, the area was purchased and developed following the closing of the amusement park. Approximately 60 properties, very much like the Subject Property, were built in the area to house several families. The Appellants testified that there were many comparable properties in the immediate vicinity of the Subject Property, and they saw no reason to use examples from closer to the lake where property values were higher.
26Mr. Jakobek did not seek to be qualified as an expert witness, but pointed out in his testimony that he was born in this neighbourhood and represented it for 20 years at City Council. He started purchasing duplexes in 1982, and purchased the Subject Property in 2005 or 2006. He is very well acquainted with this community and testified that he has been brought in to renovate and consult on half a dozen areas. The main four streets, all running south of Queen Street, are Wineva Avenue, Hammersmith Avenue, Scarborough Beach Boulevard, and Glen Manor Drive.
27Rather than introduce many other comparable properties, the Appellants filed a disclosure document as an exhibit in which they critiqued MPAC’s proposed comparable properties. They attached photographs of two more properties which he proposed as comparable properties as well: 21 Hammersmith Avenue and 58 Scarborough Beach Boulevard. While the sale dates were not included in his evidence, the Appellants included the assessment and sale price of each. They did not adjust these sales as MPAC had done; however, they are included in the chart above. The Appellants’ comments with respect to the comparable properties proposed by MPAC are also included in the chart, along with comments made by MPAC Vallier in reply to evidence relating to the two properties proposed by the Appellants.
Appellants’ Submissions
28Relying on their evidence, the Appellants submit that the correct current value for taxation years 2017 and 2018 is $1,228,000. The sales that the Appellants accepted as being useful in determining the value of his property were:
46 Glen Manor Drive, sold for $1,238,852;
18 Hammersmith Avenue, sold for $1,423,908;
21 Hammersmith Avenue, sold for $1,000,000; and
58 Scarborough Beach Boulevard sold for $1,061,250.
Post-Hearing Telephone Conference, June 25, 2018
29Following the hearing of this matter, a second hearing had been scheduled to take place involving 38 Glen Manor Drive, the other duplexed property attached to the Subject Property. At the start of that hearing, the parties came to an agreement respecting the value of that property. A telephone conference was arranged to discuss with the parties in attendance what effect, if any, the settlement of the other appeal might have on the Subject Property.
30At this subsequent hearing, the parties advised that the settlement of the other appeal has no bearing on the Subject Property. One reason for this is that the Subject Property has a parking space available, rented annually from the City. The parties dispute whether or not the leased space adds value to the Subject Property.
31Very simply, MPAC argued that the space, suitable for parking one vehicle only, adds $40,000 annually to the value of the property. The Appellants argued that the use of the space adds no value to the property, or, in the alternative, if it does add value, it is a small amount like $10,000 or $15,000. In their opinion, because you could not mortgage the space or otherwise part with it by way of sale, it is not part of the Subject Property and has no effect on the value of the Subject Property.
Board’s Findings
32The evidence discloses that the semi-detached and detached structures used as evidence of the sales of comparable properties were all quite similar, whether detached or not. The proposed comparable sales offered in evidence by MPAC were suitable examples of structures with the same purpose as the Subject Property: three separate living areas to house three separate families or individuals. Therefore, the Board finds that the eleven comparable properties provided by MPAC were instructive in determining a value for the Subject Property.
33Unfortunately, while the Appellants’ evidence also included proposed comparable building sales in the same area, insufficient details were provided to make them truly comparable. The dates of each sale are essential for determining how the market may have affected the price of the home between the sale date and the valuation day. In addition, not enough evidence was available about the condition of the homes. MPAC took the position in respect of the two comparable sales proposed by the Appellants that one was not severed and therefore not comparable and that the other was not upgraded. In all of MPAC’s proposed comparable sales, the date the unit was most recently updated or renovated was given, showing that most of these buildings had been renovated in the last 20 years. If, as MPAC argued, the two comparable proposed sales provided by the Appellant were indeed not renovated or not severed, they are not comparable.
34Of the remaining 11 proposed comparable properties, the parties agreed on the suitability of only two: 18 Hammersmith Avenue and 46 Glen Manor Drive. The Appellant pointed out that 18 Hammersmith Avenue has a higher value than many of the other proposed property sales because it is closer to Lake Ontario. The evidence does show that the properties closer to the Lake or with a view of the Lake sold for more.
35MPAC selected five of the proposed sales as the closest to the Subject Property; they are listed above. The five properties all differ from the Subject Property by having more space or less space; larger lots or smaller lots; or proximity to the Lake. In this case, while no two proposed properties are identical, they give a good gauge of the local market at the valuation day. Of the five preferable comparable properties selected by MPAC, the median value is $1,329,215, ($1,329,000, rounded) which is the value of 60 Glen Manor Drive. While this property is smaller and described by the Appellant as a single family detached property, not a duplex, its function is the same in that it houses three separate living units. It was built the same year as the Subject Property, but renovated more recently. The Board finds that the median value of the five most suitable comparable sales is therefore the current value for the Subject Property on the valuation day, January 1, 2016.
36The Board finds that the leased parking space adds no value to this property. Land is assessed against the owners pursuant to section 17 of the Act, so whatever the value of the parking space, it is not assessed against this property.
DECISION
37The correct current value of the Subject Property is $1,329,000 for the 2017 and 2018 taxation years. However, as no one made application to increase the assessment of the Subject Property the Board confirms the assessment as returned at $1,311,000.
38An equitable reduction of the current value of the Subject Property, pursuant to s. 44.(3)(b) of the Act, is not required.
“Leslie Flemming”
LESLIE FLEMMING
MEMBER
Assessment Review Board
A constituent tribunal of Environment and Land Tribunals Ontario
Website: www.elto.gov.on.ca Telephone: 416-212-6349 Toll Free: 1-866-448-2248```