Kelly v. Municipal Property Assessment Corporation (MPAC), 2018 CanLII 107719

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: November 09, 2018

FILE NO.: WR 156042

Assessed Person(s): Mary Noreen Kelly and Leonard Patrick Kelly

Appellant(s): Mary Noreen Kelly and Leonard Patrick Kelly

Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 02

Respondent(s): Township of Tay Valley

Property Location(s): 104 Lakeview Lane

Municipality(ies): Township of Tay Valley

Roll Number(s): 0911-914-015-40500-0000

Appeal Number(s): 3265698 and 3288979

Taxation Year(s): 2017 and 2018

Hearing Event No.: 701590

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

Heard: September 13, 2018 in Perth, Ontario

APPEARANCES:

Parties

Representative

Mary Noreen Kelly and Leonard Patrick Kelly

Greg Kelly

MPAC

Lincoln Pearce

Township of Tay Valley

No one appeared

MEMORANDUM OF ORAL DECISION DELIVERED BY JENNIFER GRIFFITH ON September 13, 2018

Background

1Mary Noreen Kelly and Leonard Patrick Kelly (the “Appellants”) are the owners of 104 Lakeview Lane (the “Subject Property”), which is located in the Township of Tay Valley.

2Pursuant to the provisions of the Assessment Act, R.S.O. 1990, c. A.31 (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 (“current value”).

3MPAC has assessed the current value of the Subject Property at $326,000 for the 2017 taxation year and at $315,000 for the 2018 taxation year.

4The Appellants have filed appeals for the 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 should be $211,000. At this hearing, MPAC takes the position that its assessed value should be $315,000.

5Pursuant to s. 40(11) of the Act, the Township of Tay Valley is a party to this proceeding. However, no one appeared at the hearing on the Township’s behalf.

6Section 44(3)(b) of the Act, directs the Board to reduce the assessment 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 takes the position that an equitable reduction is not required. The Appellants assert no position on equity. Therefore, equity is not at issue at this hearing.

7At the completion of the hearing, the Board rendered an oral decision. For the reasons that follow, the Board finds that the current value is $315,000. Therefore, the Board reduces the returned assessment from $326,000 to $315,000 for the 2017 taxation year and confirms the returned assessment of $315,000 for the 2018 taxation years for the Subject Property. Pursuant to s. 44(3)(b) of the Act, 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.

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:

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

Burden of proof

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.

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

9The issue to be determined on these appeals is the correct current value of the Subject Property for the taxation years 2017 and 2018.

Description of the Subject Property

10The Subject Property is a one-storey, seasonal and recreational dwelling – First Tier on Water, located at 104 Lakeview Lane, in the Township of Tay Valley. The Subject Property has a total building area of 1,161 square feet (“sq. ft.”), estimated year built of 1980, with a quality of construction rating of 5.5 and with a lot area of 0.97 acres.

Discussion, Analysis and Findings

The correct current value of the Subject Property for the taxation years 2017 and 2018

MPAC’s Evidence

11Lincoln Pearce represents MPAC. Mr. Pearce presents a Valuation Report, dated March 16, 2018, which he prepared and testifies to the information contained in the report.

12Mr. Pearce testifies that he inspected the Subject Property on April 9, 2014. He states that during the inspection he reviewed and confirmed that the Subject Property data and classification are correct. Mr. Pearce testifies that the classification code is a 391 Seasonal and Recreational dwelling and the Structure code is 381 Mobile Home.

13Mr. Pearce testifies that although the structure code of the Subject Property represents a Mobile home as per its original state, it would require a permit in order to move the structure, because it is no longer on wheels and is mounted on concrete blocks. Mr. Pearce also testifies that the Subject Property has been renovated with an addition, an enclosed porch and truss roof over the entire structure. Based on these changes, Mr. Pearce argues that the Subject Property no longer presents like a mobile home as demonstrated in the photograph presented into evidence and as compared to the photographs of the comparable properties presented by MPAC.

14Mr. Pearce also testifies that the Subject Property is located on the north eastern side of Bob’s Lake and has year round road access. He testifies that Bob’s Lake is a highly sought after location for boating and outdoor enthusiasts, because of its location, size, and natural beauty. Mr. Pearce testifies that there have been numerous sales on the lake and prices range between $200,000 and $500,000. However, Mr. Pearce states that he was not able to find sales of similar mobile constructed homes in the area and surrounding neighbourhoods.

15In support of current value, Mr. Pearce presents an analysis of the sales of six suggested comparable properties within close proximity to the Subject Property. Most of these six suggested comparable properties are located on the same lake as the Subject Property. These suggested comparable properties are located at 82 Oak Shore Lane, sold in 2014 for $300,000; 26 Maple Grove Crescent, sold in 2016 for $359,000; 346 Pine Shores Lane, sold in 2015 for $350,000; 1556 Crozier Road D, sold in 2015 for $325,000; 160 Farren Lake Lane, sold in 2017 for $310,000; and at 903 Sherbrooke Drive A, sold in 2017 for $282,500.

16The analysis contains both actual and time adjusted sale prices. The actual sale prices of these six sales range from $282,500 to $359,000 (time-adjusted sale prices range from $271,260 to $355,764). These six suggested comparable properties have an average total building area of 1,024 sq. ft., an average frontage of 246 feet, an average lot size of 0.86 acre, an average year built of 1970 and a median sale price of $312,500 (time-adjusted sale price of $319,826).

MPAC’s Submissions

17On cross-examination, MPAC agrees that there is a right of way that goes through the Subject Property and through other neighbouring properties. However, MPAC states that the right of way has no financial impact on the assessed value of the Subject Property.

18MPAC argues that the Realtor’s Comparative Market Analysis should not be relied on, because it was completed in 2013 and does not reflect current value as of the valuation date of January 1, 2016.

19MPAC argues that the appraisal value of $211,000 should not be relied on, because there are inaccuracies in the report (e.g. square footage of the structure and sale dates of the suggested comparable properties used in the appraisal) and the author of the Appraisal Report is not in attendance to be cross-examined. MPAC submits that although the Appellants argue that the Subject Property should be compared to mobile homes, the Appraisal Report also includes suggested comparable properties that are not mobile homes.

20Relying on its evidence, MPAC submits that the correct current value is $315,000.

Appellants’ Evidence

21The Appellants are represented by their son, Greg Kelly.

22The Appellants testify that the Subject Property is assessed to high because it is built on concrete blocks and does not command the same value as properties that are built directly on the site area. They also testify that the setback requirement for waterfront properties is 100 feet and that the Subject Property has a setback of 60 feet.

23The Appellants testify that the renovations of the Subject Property in the 1990’s were cosmetic. They state that the addition of the enclosed porch was already done when they purchased the Subject Property in 1989; and after the Subject Property was purchased the deck and the truss roof was done. The Appellants testify that the truss roof was done in 1995 to fix a water leak; the crawl space is dirt; the ramp is wooden; and that the boathouse is in poor condition with walls falling in.

24The Appellants also argue that the Subject Property does not have year-round road access and agreed that the deeded right-of-way is ploughed by neighbours. The Appellants argue that the right-of-way leads to less privacy and severely restricts possible future developments.

25In support of current value, the Appellants present an Appraisal Report by Rivington Appraisers Inc. and signed by Tanya McVeigh, CM CNAREA, on August 25, 2016, which estimates the value of the Subject Property to be $211,000.

26The Appellants also present a Realtor’s Comparative Market Analysis, from The Gallery of Homes, prepared by Christine Jennings, dated August 23, 2013, in which she suggested a list price for the Subject Property in a range between $195,000 and $205,000; and a probable final sale price in a range between $189,000 and $198,850.

Appellants’ Submissions

27The Appellants submit that the Appraiser also used suggested comparable properties that are not mobile homes to arrive at a value of $211,000.

28The Appellants submit that they are unable to respond to questions surrounding some of the data contained in the Appraisal Report, because they just did not know the answers.

29Relying on their evidence, the Appellants submit that the correct current value for taxation years 2017 and 2018 should be $211,000.

Findings on Current Value

30Under s. 44.(3)(a) of the Act, the Board must first determine “the current value of the land.” The best evidence the Board can receive of current value is an arm’s length and market-tested sale of a property on the valuation date or close to it.

31In regard to the Appellants issue that the renovations of the Subject Property are cosmetic, the Board rejects that argument because the property was inspected by MPAC on April 9, 2014 and confirmed that the renovations of the truss roof, enclosed porch, and deck were done. Also, recent photograph of the Subject Property demonstrates fairly significant changes when compared to photographs of the Subject Property when it was purchased in 1989.

32In regard to the dirt crawl space; the wooden ramp; and the poor condition boathouse, the Appellants present no quantitative evidence to demonstrate the impact on the assessed value of the Subject Property. Therefore, the Board puts little weight on this argument. Also, MPAC testifies that the crawl space and the wooden ramp have no financial impact on the assessed value of the Subject Property.

33In regard to the issue that the Subject Property is assessed to high because it is built on concrete blocks and does not command the same value as properties that are built directly on the site area, the Board agrees that the sales of similar structured mobile homes are preferable. However, both parties agree that there are little or no sales of similar structured mobile homes. Therefore, the Board considers the sales of suggested comparable properties presented into evidence by both parties in determining current value.

34In regard to the issues of the driveway (right-of-way), the Board finds that the right-of-way is a deeded access that runs through the Subject Property and other neighbouring properties. The Board accepts MPAC’s evidence that the right-of-way has no financial impact on the assessed value of the Subject Property, because the Appellants present no evidence to the contrary. The Appellants present no quantitative evidence to show what impact the right-of-way has on the lack of privacy and future development on the assessed value of the Subject Property, as such, the Board puts no weight on this argument.

35In regard to the year round access, the Board finds that the Subject Property is assessed as a Seasonal and Recreational type property and not a year round property. However, year round access to the Subject Property is made possible if the Appellants are so desired, because they testify that the road is ploughed by the neighbours.

36In reviewing MPAC’s six sales evidence in support of current value, the Board did not rely on the three sales at 82 Oak Shore Lane, sold in 2014 for $300,000; 160 Farren Lake Lane, sold in 2017 for $310,000; and at 903 Sherbrooke Drive A, sold in 2017 for $282,500. The Board did not rely on these three sales because the sale dates are too far removed from the valuation date of January 1, 2016 to provide any meaningful test of current value.

37The remaining three sales are 26 Maple Grove Crescent, sold in 2016 at time adjusted sale price of $355,764; 346 Pine Shores Lane, sold in 2015 at time adjusted sale price of $350,354; and 1556 Crozier Road D, sold in 2015 at time adjusted sale price of $328,653. These sale prices range from $328,653 to $355,764.

38In reviewing the Appellants evidence in support of current value, the Board rejects the Realtor’s Comparative Market Analysis. The market analysis was completed in 2013, well outside the valuation date of January 1 2016, and the sale dates of the suggested comparable properties used in the analysis are too far removed from the valuation date to provide a true test of current value.

39In regard to the Appraisal value, the Board rejects the appraisal, because MPAC indicates that according to MPAC’s record, the sale dates, and total building area of the suggested comparable properties are inaccurate. In response, the Appellants were unable to accurately confirm the sale dates, the total building area, and other locational influences that impact the assessed value of the suggested comparable properties. Most importantly, the Appraiser was not in attendance to be cross-examined about the information contained in the report.

40Based on the above evidence, the Board accepts the above three sales presented by MPAC, which range in prices range from $328,653 to $355,764. Because these three comparable properties are not mobile structure built homes, the Board finds that the current value of the Subject Property is more likely to be less than the minimum sale price of $328,653, which supports MPAC’s recommended value of $315,000.

DECISION

41The Board finds that the current value is $315,000. Therefore, the Board reduces the returned assessment from $326,000 to $315,000 for the 2017 taxation year and confirms the returned assessment of $315,000 for the 2018 taxation year for the Subject Property.