Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: November 06, 2018

FILE NO.: WR 153243

Assessed Person(s): Marc Michel Rainville; Christine Huneault

Appellant(s): Marc Rainville

Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 30

Respondent(s): Municipality of Markstay-Warren

Property Location(s): 338 Rabbit Trail Road

Municipality(ies): Municipality of Markstay-Warren

Roll Number(s): 5208-000-003-06103-0000

Appeal Number(s): 3175322

Taxation Year(s): 2016

Hearing Event No. 696879

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

Heard: April 24, 2018, in Sudbury, Ontario

APPEARANCES:

Parties	Representative
Marc Rainville	Self-represented
MPAC	Marc Serré
Municipality of Markstay-Warren	No one appeared

DECISION OF THE BOARD DELIVERED BY LESLIE FLEMMING

REASONS

Background

1Marc Rainville (the “Appellant”) is the owner of 338 Rabbit Trail Road (the “subject property”) in the Municipality of Markstay-Warren (the “Municipality”) which is a single-family detached dwelling not on water built in 2011. The home is located in a rural neighbourhood, and is a two-level structure with an area of 1,300 square feet (“sq. ft.”) over both levels plus a top floor of 776 sq. ft. The land upon which the residence sits is 19.99 acres. Most of the area is used for residential and farm purposes. This structure is almost entirely above-grade, which makes it 2.5 storeys tall in MPAC’s judgement. One very important feature about its location is that it is across the road from an operational gravel pit.

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 2013 to 2016 taxation years, MPAC is required to assess this value as of the valuation date, January 1, 2012 (“current value”).

3MPAC returned a current value assessment of the subject property of $404,000. MPAC takes the position that the returned assessment is too high, and has recommended that the assessment be reduced to $359,000 for taxation year 2016.

4The Appellant has filed an appeal for taxation year 2016 with the Assessment Review Board (the “Board”), pursuant to s. 40 of the Act. It is his position that MPAC’s assessment of current value is too high and that the correct current value is, at most, $316,500 for the cycle under review. The Appellant also submits that the same value should be carried forward to the current assessment cycle: 2017 to 2020.

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

7MPAC 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, this ground for appeal is not in issue.

8At the completion of the hearing, the Board reserved its decision. For the reasons that follow, the Board finds that the current value of the subject property in the 2016 taxation year is $339,000. Pursuant to s. 44(3)(b) of the Act, an equitable reduction of this value is not required.

RELEVANT LEGISLATION

9Section 1 of the Act states:

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.

10Section 19.(1) of the Act states:

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

11Section 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:

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

12Section 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.

13Section 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

14The issue to be determined on this appeal is the correct current value of the Subject Property for the 2016 taxation year.

DISCUSSION, ANALYSIS AND FINDINGS

MPAC’S Evidence

15Marc Serré represented MPAC. He is a Property Valuation Analyst for MPAC in Sudbury, and prepared the Property Valuation Report and Equity Analysis Report accepted into evidence.

16Mr. Serré began his evidence by saying that he had reconsidered the evidence in total and had concluded that the proposed current value of $404,000 was too high. In the course of his evidence, he explained how he had arrived at the higher value and the steps in his logic which now led him to recommend a lower value of $359,000.

17MPAC usually determines the current value of residential properties by comparing features of the subject property with properties that have been sold close to the valuation day, in this case January 1, 2012. In order to bring values into the same period of time, MPAC uses a time adjustment procedure which calculates the changes in value during the months before and after the valuation day. In the previous cycle to the one in question, values in this vicinity had risen by 20.9%. By keeping track of the values of 600 sales in the vicinity of the subject property, MPAC is able to put a value on increases in the residential market per month. Using this tool, MPAC can look at data from recently sold properties and calculate the value of those sales as of January 1, 2012. The Appellant accepted the time adjustment process.

18Features that MPAC compared to the subject property included residential properties with septic systems instead of sewers, properties with their own water source as opposed to municipal water, and, in this case, unlike the subject property, residences with a basement.

19Mr. Serré introduced seven residential properties in the area that he deems to be similar. All the comparable sales have lots over two acres, their own septic systems and water sources. Despite the fact that all the comparable homes have basements, while the subject property does not, Mr. Serré offered the opinion that all the seven properties were inferior to the subject property.

20Because all seven comparable properties had quite different lot sizes, but relatively similar residence sizes, Mr. Serré calculated the square foot values of each comparable home, and then took the median value ($205 per sq. ft.) and multiplied it by the area of the subject property. The result was a higher value than initially assessed. However, Mr. Serré then adjusted for details which came to light in the 2016 Request for Reconsideration. He reduced the usable area of the site area on the grounds that part of the land was rocky, steep and un-usable. He also reduced the structural value by $10,164 because the ground floor of the subject property has essentially the same utility as the basements of the comparable sales. Mr. Serré changed the description of an outbuilding from a shed to a carport, generating approximately $17,000 in value reduction. Lastly, Mr. Serré changed the assessment by applying a site variable for “Abutting/or in Proximity to an Industrial Property”, which gave an additional -4% over and above the original -4% applied. The result was that he recommends a reduction of the current value to $359,000 for January 1, 2012.

MPAC’s Submissions

21Relying on its evidence, MPAC’s submits that the correct current value for the taxation year 2016 is $359,000.

Appellant’s Evidence

22The Appellant represented himself, and provided all the evidence in support of his appeal. He submitted a brief written presentation, and also provided information from an organization called “Gravel Watch”. The research the Appellant submitted dealt with Dust and Air Quality Issues and legislated standards vis-à-vis permissible levels of particulate matter. The research indicated that there is no safe level of particulate matter in the air we breathe. The Appellant also provided photographs he had taken depicting the land quite close to his home taken while gravel removal operations were underway. The photographs depict a thick haze of dust all around the site of his home.

23The Appellant testified that the gravel trucks cause considerable tension and worry to him and his wife because they have children. He recounted one incident where a gravel truck smashed into a hydro pole. That could have been disastrous had the children been there awaiting their school bus. He noted that the constant truck traffic destroys the road in a short time, and also presents a constant hazard. On one occasion the bus could not deliver the children at the end of the school day because of poor visibility caused by dust from the quarry.

24The amount of dust created by the quarry operation is a major nuisance. The Appellant testified that the owners of the quarry, Coloured Aggregates, has a quota as to the amount of stone the company can remove from the site (20,000 tonnes a year) but he also testified that Coloured Aggregates can process 150,000 tonnes of stone from another site. This large quota of processed stone makes for significant truck travel on the gravel road along with significant dust generation any time the quarry is processing stone.

25Dust generated by the quarry is the key problem for the Appellant and his family. The Appellant takes the position that there is no safe level of dust in air. Referring to an excerpt from the Gravel Watch website entitled “Property Values”, a 2006 study suggests that a large pit or quarry can reduce the value of residential properties by as much as 25% for homes within half a kilometer of the operation and 15% for homes within one kilometer of the quarry. Applying this logic to his own assessment, Mr. Rainville posits that the value of his property should be reduced by $87,500 for a current value of $316,500.

26The Appellant also introduced evidence of comparable property sales in the area. As with the comparable properties proposed by MPAC, the Appellant’s comparable sales are mostly smaller, less valuable homes than his own. These properties included:

(a) 364 Rabbit Trail Road: The home next door, assessed at $168,000 but sold in 2013 for $214,000. This value is not time-adjusted. This home was built in 1985, is only 1,176 sq. ft. in area (main floor) but it also has a basement of 1,176 sq. ft. The site area is also approximately two-thirds smaller than the site area of the subject property.

(b) 981 Hwy. 539: This property sold in September, 2015, for $255,000. It was built in 2002, and was 1,459 sq. ft. on the main floor with a basement area of 1,414 sq. ft. The site area is 22.45 acres, so this property might have been a little bit more comparable. However, it is still a small home by comparison to the subject property.

(c) 99 Curry Point: This property sold for $320,000 in April, 2015. It had been assessed for $352,000. It is a large home with 1,512 sq. ft. and a basement of 1,382 sq. ft. However, this home has no source of central heating. Unlike the subject property it is not close to the quarry.

(d) 196 Rabbit Trail Road: The Appellant describes this home as having the same features as his home does. It is classified at a storey and three-quarters while his home is classified as two-and-one-half storeys. Mr. Rainville suggests that his home is described as being 2.5 storeys in height because it has wood timbers running the entire height of the house instead of a portion of stone or block at the ground level. Had he used a block foundation, he believes, his lower level would be classified as a basement and that would have resulted in a lower value overall. This property sold in December, 2013, for $277,000.

27Lastly, the Appellant entered into evidence two appraisal reports relating to his property. One was completely illegible. The second, a Residential Appraisal Report from Jeff Marsh of Charles Bell Real Estate is also very difficult to read and is unhelpful for that reason.

Appellant’s Submissions

28Relying on his evidence, the Appellant submits that the correct current value for taxation year 2016 is $315,000.

Board’s Analysis and Findings

29The best evidence of value is a sale of the subject property on or around the valuation day. In this case, the valuation day is January 1, 2012, quite a long time away from the present time, which makes it difficult for both parties in trying to raise evidence to support their cases.

30Both parties have produced a number of “comparable sales” which both concede are not especially similar given the quality of the building at 338 Rabbit Trail Road, the size of the structure (3,376 sq. ft.), the site area (19.99 acres). The building has a timber exterior, which, as the Appellant has noted, adds value to the exterior. Value was also added because the home is not built underground very much at all, and does not have a traditional “basement”. Because the lower floor appear much like a regular living floor, the value attributed to each level is greater than if the home had a traditional basement construction.

31A review of the comparable sales establishes that the subject property would have a value greater than $255,000 (the Appellant’s property #7 selling price) and likely a greater value than $308,000, which is the value of MPAC’s sale E. All of MPAC’s other comparable residences were less valuable than this amount, with the median value being $286,634 (time adjusted).

32MPAC has taken into consideration various factors which would serve to diminish value, including changing recognition of the lower floor by its utility as a basement, even though it is above ground. A carport was valued as a shed and served to reduce the value further, and a further small reduction was implemented to adjust for a steep unusable slope to the west of the driveway.

33While the Appellant urges the Board to accept the data contained in the Gravel Watch report, the Board must be mindful that other properties in the vicinity are affected by the proximity to the aggregates operation and they have sold in the shoulder years surrounding the valuation day of January 1, 2012. The evidence from the Appellant about a sale of the next door home, and evidence of another sale at 196 Rabbit Trail Road are useful in determining value.

34364A Rabbit Trail Road, the property adjacent to the subject property, sold in 2013 for $214,000. The property is one storey with a full basement of the same size – and is rated a quality 6 for construction quality, as opposed to the 6.5 rating given to the subject property. The home is smaller than the subject property, and the site area is approximately one-third the size of the subject property’s site area. This home is inferior to the subject property. Its value works out to $182 per square foot (“psf”).

35196 Rabbit Trail Road sold in December, 2013, for $277,000. This property is smaller than the subject as well, but is one and three-quarter storeys in height with a main floor of 1,914 sq. ft. and a basement of 1,197 sq. ft. It is a construction quality 6 according to MPAC and was built in 2010. The subject property has one and a half more baths and 2 more bedrooms than this comparable property. Its value works out to $145 psf. However, both of these properties would be worth less than the subject property given the better quality of the subject. If I calculate the average value per square foot of each of these two property sales the result is $163.5. Multiplying this by the living area of the subject property (2076 sq. ft.) results in a value of $339,426. This value is quite low for the subject property given the better quality of construction, the larger home, and the larger site area when compared to its neighbours. However, the result shows that the properties in the neighbourhood have value and their proximity to the gravel pit is reflected in the sale prices.

36Even though the subject property is a larger and better quality home than the comparable sales noted above, it is also closer to the gravel pit. Therefore, despite its superior construction and size, these advantages will be offset by the negative impacts from the gravel pit.

37In conclusion, the Board finds that the current value is $339,426 or $339,000 rounded.

DECISION

38The Board hereby reduces the assessment from $404,000 to $339,000 for the 2016 taxation year.