Timothy Pearson v. Municipal Property Assessment Corporation, 2018 CanLII 107723

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE:

November 09, 2018

FILE NO.:

WR 154943

Assessed Person(s):

Timothy Pearson

Appellant(s):

Timothy Pearson

Respondent(s):

Municipal Property Assessment Corporation (“MPAC”)

Region 15

Respondent(s):

Town of Milton

Property Location(s):

392 Highside Drive

Municipality(ies):

Town of Milton

Roll Number(s):

2409-010-003-62100-0000

Appeal Number(s):

3267724 and 3304943

Taxation Year(s):

2017 and 2018

Hearing Event No.

702265

Legislative Authority:

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

Heard:

August 15, 2018 in Milton, Ontario

APPEARANCES:

Parties

Counsel⁺/Representative

Timothy Pearson

Noreen Martens

MPAC

Valerie Lamothe

Town of Milton

No one appeared

DECISION OF THE BOARD DELIVERED BY TYRONE D. SKANES

PRELIMINARY ISSUE

1Noreen Martens, the common-law wife appearing on behalf of Timothy Pearson, advised that she had additional evidentiary material with her that she wished to introduce at the hearing. This material had not been disclosed to MPAC or provided to the Board.

2MPAC objected to the introduction of this material as it was contrary to the Board’s Rule on evidence production and the assessor had not had an opportunity to review this material.

3Rule 37 of the Board’s Rules of Practice and Procedure is clear that all evidence to be relied upon at a hearing must be filed on or before the filing deadline set out in the schedule of events. The due date outlined in the schedule of events in this matter was May 01, 2018. Rule 48 stipulates that a document will only be admitted into evidence if it has been disclosed, unless the Board determines there are exceptional circumstances. No exceptional circumstances have been identified in this instance.

4The Board ruled that Ms. Martens would not be permitted to introduce any new evidence at the hearing.

ISSUE

5The appeal before the Assessment Review Board ("Board") was filed by Timothy Pearson (the “Appellant”) in respect of the assessment of a single, detached family home located at 392 Highside Drive, the subject property (“SP”), for the 2017 taxation year and 2018 taxation year.

6The single storey 1,722 square foot ("sq. ft.") home was built in 1959 but has an effective year built of 1997, as there was an addition to the SP in 2007 measuring 689 sq. ft. The basement is measured at 1,651 sq. ft. of which 1,293 sq.ft. is finished. It is situated on a lot sized at 5,761 sq. ft. or 0.2 of an acre. The Quality Class ("QC") is 6.0.

Valerie Lamothe, representing MPAC entered four sales of comparable properties that she said were good comparators to the SP. All of the properties are located in the same homogenous neighbourhood as the SP. She used the direct comparison sales approach to value and used time adjusted sales (“TAS”) prices in her analysis. She said that the comparable properties had very similar building and lot sizes in comparison to the SP. She said that the current value assessment (“CVA”) initially was $866,000 but at the request for reconsideration (“RfR”) this value was reduced to $676,000, a value that was rejected by the Appellant. There were several errors in MPAC’s data relating to the SP that were identified by the Appellant. All of the errors were addressed and corrected at the RfR. They included changing the quality of construction (“QC”) rating from 7.0 to 6.0.

7There was a dispute regarding the size of the addition. MPAC’s records showed the addition to be 689 sq. ft. but the Appellant said the actual measurement was 606 sq. ft. The assessor said she had no reason to doubt the Appellant’s measurement and agreed to adopt the addition measurement as 606 sq. ft. The new measurement required the assessment to be adjusted. The assessor said she believed that a $5,000 reduction in the CVA would be appropriate. She said that this reduced the CVA even further to $671,000. She believed that this value was fair and reasonable and recommended the Board reduce the CVA from $866,000 to $671,000 for the 2017 taxation year and from $676,000 to $671,000 for the 2018 taxation year.

8Ms. Martens provided the addresses of five properties that she said had recent sales but there was no other information about these properties. She also provided the addresses of four other properties and their assessed values. There was no further information provided about these properties and from this information she provided what she believed was an equity analysis. Ms. Martens focused her argument on the errors that had been uncovered in MPAC’s data that she believed prevented an accurate assessment from being made. However, she did admit that upon consultation with MPAC all of the identified data errors had been corrected at the RfR. She also agreed with the assessor’s offer to reduce the assessment by $5,000 to account for the new addition measurement. She said that she believed a fair assessment of the SP was $578,000 and asked the Board to reduce the CVA to that value.

9The issue before the Board for determination is whether the assessment of the SP for the 2017 taxation year and 2018 taxation year is at current value and whether the assessment is equitable with the assessment of similar lands in the vicinity.

DECISION

10The Board is required by s. 44. (3) of the Act to determine the current value of the land and 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.

11The Board finds that the current value of the SP as of January 1, 2016, is $756,000 (rounded). Therefore, the Board will reduce the CVA to $756,000 from $866,000 for the 2017 taxation year and to $676,000 from $756,000 for the 2018 taxation year and finds that it is equitable with the assessments of similar lands in the vicinity

REASONS FOR DECISION

Relevant Legislation

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.

MPAC's Position and Evidence

13Ms. Lamothe’s valuation report was entered into evidence as Exhibit 1 and her Equity Analysis as Exhibit 2. She testified that the direct sales comparison approach to value was used in determining the current value of the SP.

14Ms. Lamothe entered the sales of four comparable properties that she opined were good comparators to the SP. She said that the SP and comparable properties were in the same homogenous neighbourhood and that all had recent sales. The sale prices had been time adjusted to the valuation date of January 1, 2016. She said that all the properties were the same structure type as the SP and the year built was within 12 years of each other, with the exception of Sale 4, which was built in 2003 that resulted in a gap of 44 years with the SP. The lot and building sizes were very similar and all had attached garages. She opined that these properties were more similar than dissimilar in comparison to the SP.

15Ms. Lamothe testified that the SP had been inspected by another MPAC employee and had reported that the measurement for the property addition was 689 sq. ft. However, the Appellant advised that measurement was incorrect as he had measured the addition and found that it was actually 606 sq. ft. She said that she had no reason to doubt the Appellant and recommended a $5,000 reduction to the CVA to account for the difference.

16Ms. Lamothe entered an Equity Analysis Report in which she examined the sales of 30 similar lands located within one kilometer of the SP. She testified that the median Assessment to Sales (“ASR”) ratio returned at 0.97, which indicated to her that similar lands in the vicinity were being assessed at or near their correct current values.

17Ms. Lamothe summed up her presentation by asking the Board to reduce the CVA of the SP for the 2017 taxation year from $866,000 to $671,000 and reduce the CVA from $676,000 to $671,000 for the 2018 taxation year.

18On cross examination, Ms. Martens advised that she had uncovered another error in MPAC’s data in relation to the Equity Study. She said that at Line 15 of Appendix B of Exhibit 2, 404 Highside Drive, it showed the assessed value to be $756,000, which she believed to be incorrect. She asked the assessor if that assessed value was correct. The assessor requested a brief recess to allow her to confirm the data. Upon her return she advised that the correct assessed value of that property was $677,000. Ms. Martens asked her how this would affect her finding of a median ASR of 0.97. The assessor replied that she conducted the analysis twice and arrived at two different results. One median ASR was 0.98 and the second median ASR was 0.99. She said that either median ASR only reinforced her belief that an adjustment for equity was not required.

Appellant’s Position and Evidence

19Ms. Martens introduced a brief documentary package into evidence as Exhibit 3. In this document were five addresses that she said had sold recently but there was no information pertaining to these properties. There were also four addresses where the only information provided was their assessed values. She included those four properties to counter MPAC’s equity study. She outlined several data errors in MPAC’s evidence but admitted that all of the errors had been corrected at the RfR. She said she provided this information to highlight that MPAC’s data was not perfect and there were possibly other errors that affected their ability to correctly assess properties. She pointed out how she had discovered an error in MPAC’s equity study that affected the assessor’s opinion of the median ASR. She did not highlight any other errors in MPAC’s evidence that might affect the CVA.

20Ms. Martens asked the Board how it could place any confidence in MPAC’s evidence when it was filled with errors and she implored the Board to ignore MPAC’s evidence and reduce the CVA of the SP to $578,000.

Board's Deliberations - Current Value

21The best evidence of current value is the sale of the SP if the sale meets the definition of current value on or near the valuation day. When no such sale occurs, as in this instance, the Board looks to the sale of similar properties in the vicinity to determine current value.

22The Board has carefully considered the testimony of the parties and the documentary evidence tendered as exhibits.

23The Board, when comparing properties, does not expect exactness or sameness. Therefore, the Board looks at similarity of characteristics, amenities and location to determine comparability.

24The Board usually considers the sales of comparable properties that have occurred within one year on either side of the valuation date as the ideal time period for consideration. The Board occasionally does extend the time period for considering comparable properties when the parties have demonstrated that there are an insufficient number of relevant sales during the ideal time period.

25MPAC entered the sales of four properties located within the same homogenous neighbourhood as the SP. These properties are very similar to the SP. The properties all have a QC rating of 6.0 and the building sizes are within 300 sq. ft. of the SP. All have attached garages. However, Property 4 was built in 2003 and there is a 44 year gap between it and the SP’s year built. For that reason, the Board will not consider this property. The Board will consider properties 1, 2 and 3. These properties are reflected below in Table 1.

26Ms. Martens entered five property sales into evidence. However, there was no information regarding these properties from which the Board could conduct a comparative analysis.

27Instead, she chose to focus her argument on the unreliability of MPAC’s evidence due to actual or perceived errors. The assessor admitted that there were a number of errors in the data that was addressed at the RfR and which Ms. Martens agreed were corrected. Ms. Martens then highlighted another error in MPAC’s equity study.

28The Board believes that the errors referenced by the parties might be classified as incorrect data instead of errors. Both parties agree that the incorrect data was updated at the RfR after an inspection had been completed and the correct data collected. This leads credence to the Board’s belief about incorrect data as opposed to errors.

29Ms. Martens asked the Board how it could rely on such error filled data despite agreeing that the incorrect data had been corrected. If there were further errors then Ms. Martens should have identified those for the Board. However, the Board cannot ignore or not consider evidence simply because there “may” be errors. Therefore, the Board will not agree with Ms. Martens request to disregard MPAC’s evidence.

30As Ms. Martens had no comparable sales properties to provide for the Board’s consideration, the Board is left to consider MPAC’s three sales comparable properties.

31These properties are:

Table 1

Property

Building Size

(Sq. ft.)

Lot Size

(Acres)

Year Built

Quality Construction

(QC)

Sale

Date

Time Adjusted Sale Price (TAS)

Current Value Assessment (CVA)

Subject Property

1,651

0.2

1959

6.0

$671,000

Sale 1

1,305

0.16

1968

6.0

February 2015

$532,788

$528,000

Sale 2

1,269

0.17

1971

6.0

January 2016

$625,895

$552,000

Sale 3

1,312

0.19

1960

6.0

June

2015

$632,486

$575,000

32The Board recognizes that, although the comparable properties are fairly similar to the SP, they are inferior in some respects. The building and lot sizes are smaller than the SP. Although all of the properties have some portion of the basement finished, the SP’s finished area is greater. All of the properties have attached garages.

33The fact that the SP is slightly superior to the comparable properties also lends credence to the fact that the proposed CVA of the SP at $671,000 is higher than any of the comparable properties TAS price or assessments.

34The Board is normally reluctant to use a single aspect of comparison when determining comparability between sales properties. However, the Board must deal with the evidence placed before it. Therefore, the Board will utilize the value per square foot of building value method. The Board determined that the average value per square foot of the comparable properties is $461.18. When this value is applied to the square footage of the SP at 1,651, a value of $761,408.18 is returned. The Board will further reduce this value by $5,000, to account for the incorrect building measurement.

35The Board finds that the current value of the SP is $756,000 (rounded).

Board’s Deliberations – Equity

36MPAC entered an equity study into evidence whereby the sales of 30 similar properties located within 1.5 kilometres of the SP were analyzed. The assessor determined that the median ASR returned at 0.97 and that this fell within MPAC’s ideal range of 0.95 to 1.05 which indicates that similar lands in the vicinity are being assessed at or near their correct current values.

37However, the Appellant found that one of the properties used in the equity analysis had what she believed was incorrect data. She conducted an analysis to determine the median ASR using the corrected assessed value and advised that having performed the analysis twice she obtained two different ASR values at 0.98 and 0.99. She said that either of these values only bolstered her opinion that the equity study determined that the median ASR fell well within the acceptable range to indicate that an adjustment for equity was not required.

38The Board conducted its own equity analysis using MPAC corrected values and determined that the median ASR changed minimally and returned at 0.97.

39Therefore, the Board accepts this equity analysis despite the Appellant’s opinion that there were other errors. When asked, the Appellant could not point to any other specific errors. The Appellant did not present any evidence from which the Board could conduct an analysis that would indicate a different result.

CONCLUSION

40The Board finds that the current value of the SP as of January 1, 2016, is $756,000 (rounded).

41Therefore, the Board reduces the CVA to $756,000 from $866,000 for the 2017 taxation year. MPAC has not applied for an increase to the assessment per Rule 40 of the Board’s Rules of Practice and Procedure, therefore the Board confirms the CVA at $676,000 for the 2018 taxation year and finds that it is equitable with the assessments of similar lands in the vicinity.