Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: November 13, 2018

FILE NO.: WR 153442

Assessed Person(s): Charlotte Talsky

Appellant(s): Charlotte Talsky

Respondent(s): Municipal Property Assessment Corporation (“MPAC”), Region 09

Respondent(s): City of Toronto

Property Location(s): 10 Mandel Crescent

Municipality(ies): City of Toronto

Roll Number(s): 1908-114-050-01400-0000

Appeal Number(s): 3239371 and 3295476

Taxation Year(s): 2017 and 2018

Hearing Event No.: 696664

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

Heard: May 17, 2018 in Toronto, Ontario

APPEARANCES:

Parties

Representative

Charlotte Talsky

Charlotte Talsky

Steven Talsky

MPAC

Tyler Nastich

City of Toronto

No one appeared

DECISION OF THE BOARD DELIVERED BY LESLIE FLEMMING

Background

1Charlotte Talsky (the “Appellant”) is the original owner of 10 Mandel Crescent in the City of Toronto, formerly Willowdale, (the “subject property”), which is a home built in 1965 on a lot measuring 50 feet by 124 feet. The home is a bungalow, with four bedrooms and one and a half bathrooms. It is 2,290 square feet (“sq. ft.”) in size and is situated on a lot measuring 0.14 of an acre. The lot is located on the edge of a ravine

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 Municipal Property Assessment Corporation (“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 $779,000.rs. Talsky, the Appellant, has filed appeals for taxation years 2017 and 2018with the Assessment Review Board (the “Board”), pursuant to s.40 of the Act. It is her position that MPAC’s assessment of current value is too high and that the correct current value is $400,000 to $500,000. At this hearing, MPAC takes the position that its assessed value is correct.

4Pursuant to s. 40(11) of the Act, the City of Toronto is party to this proceeding. However, the City did not advise the Board of its position on the issues raised on this appeal, and no one appeared on the City’s behalf.

5Section 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. In this case, MPAC calculated the current value based on comparable properties sold in the neighbourhood and determined that an equity adjustment was not necessary. The Appellant herself did not seek an equitable adjustment nor make any submissions on this ground. It is MPAC”s position that an equitable reduction is not required. As such, this issue in not dispute in this proceeding.

6At the completion of the hearing, the Board reserved its decision. For the reasons that follow, the Board finds that the current value for the 2017 and 2018 tax years is $779,000.

Relevant Legislation

7The Act:

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.

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.

5. After 2020, for each subsequent period consisting of four consecutive taxation years, land is valued as of January 1 of the year that precedes the period by two years.

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

8The issue to be determined on this appeal is what is the correct current value of the subject property for the taxation years 2017 and 2018?

Discussion, Analysis and Findings

MPAC’s Evidence

9Tyler Nastich, a Property Valuation Analyst, represented MPAC, and he also gave evidence from the Market Valuation Report he authored. Mr. Nastich explained his methodology, which was the direct sales comparison method to establish current value. In addition, being well aware of the multitude of repair issues faced by the Appellant, Mr. Nastich applied a 20% overall reduction in value. This amount had been applied in previous assessments of this property he advised.

10Mr. Nastich chose seven homes in the neighbourhood, one of which was situated on Mandel Crescent and the others of which were on Pineway Boulevard, Craigmont Drive, Bernick Road and Adamede Crescent. All of the homes are located in the City of Toronto just north of Finch Avenue East and west of Leslie Street. This is an older neighbourhood, and all the comparable homes chosen by Mr. Nastich were built in a few years between 1965 (the year the subject property was built) and 1968. None of the selected homes has been significantly renovated; all are two storeys, as is the subject property, which is a back split design. The homes are all of average construction, with the exception of 5 Adamede Crescent, which is described as “fair”. The subject property is described as “poor” condition. The homes presented are very similar in size to the subject property, which is 2,290 sq. ft. All have secondary structures in the form of an attached garage of 480 sq. ft. The lot sizes differ somewhat, ranging between 0.14 of an acre like the subject property and 0.19 acres like 11 Pineway Boulevard.

11Mr. Nastich provided the following explanation of the assessment process. Assessment is a cyclical process and the current taxation years under appeal are part of a four-year cycle in which the current value is based on the amount of money the fee simple would have cost in an arm’s length transaction between a willing seller and a willing buyer. The valuation day in this case is January 1, 2016, and it is the value of the subject property on this day that is important. Using sales that took place either before or after the valuation day establishes the values at which similar properties were exchanged, and if the properties are similar enough, the sales values of these comparable properties can be extrapolated and applied to the subject property with adjustments for different features. Mr. Nastich explained that he used time adjustment factors in order to convert sales prices to an adjusted price effective on January 1, 2016. These time adjustments reflect the value based on all the changes in the market at the time. The Board notes that, given the significant reductions subsequently applied to the subject property as a result of the maintenance problems, it is not necessary to itemize each sale here. Mr. Nastich testified that the proposed comparable homes sold between July 28, 2015 and October 3, 2016. The homes, on fairly similar lots, and being within approximately 110 sq. ft. of the total building size of the subject property, sold at values ranging from $915,000 and $1,535,000. One of these homes, 11 Pineway Boulevard, sold two times, once on July 30, 2015, and again on January 21, 2016. The first selling price was $915,000, while the second was $1,399,800. Mr. Nastich confirmed that renovations had taken place, accounting for the increase in value in just five and a half months.

12Based on his analysis of the seven property sales, Mr. Nastich determined that the current value of the subject property was $1,363,000 prior to any reductions related to the condition of the property. However, Mr. Nastich conceded that this value was not realistic given the “poor” condition of the property. While he had given it a construction quality code of 5, this code did not reflect the actual condition after a lengthy period of time without maintenance. Mr. Nastich testified that he then tried an alternative method of determining current value. He compared the subject property to the unrenovated property at 11 Pineway Boulevard, calculated the value per square foot of that property and applied it to building area of the subject property to arrive at a current value of $893,000 or $890,000 rounded. Lastly, Mr. Nastich applied a 20% functional obsolescence deduction to arrive at a value of $779,000. Mr. Nastich also advised that his estimate of the value of the land alone, based on MPAC’s model for this area, was a value of $844,000. The final current value of $779,000 was lower than his assessed value of the land only.

The Appellant’s Evidence

13The Appellant managed this property on her own. She and her husband separated soon after purchasing the property, and the Appellant indicated that she believed she was taken advantage of by the builder because she was female and not knowledgeable about house design and the hazards of poor design and/or building. She says that the property had a fire hydrant on it, and that it acted as a catch basin for runoff. She testified that the foundation was built badly so that the crawl space under the home leaked frequently. Despite warranties in place, the Appellant was never able to have the foundation repaired properly so as to remove the potential occurrences of water leaks.

14The Appellant gave a history of various attempts to repair the home, including three roof replacements, chimney repairs, and other attempts to solve the problem of the incursion of raccoons in the attic. Nothing has succeeded, which means that the Appellant has been living in an increasingly deteriorating home with very little success in obtaining the help she needs to fix it.

15The Appellant gave evidence of other nuisance factors in this neighbourhood. These include the proximity of the train tracks and the Old Cummer GO station. She is very close to the GO station. She testified that the frequency of GO trains along with freight trains is a nuisance that she has never become used to. There is also increased traffic on her street because of the people driving to the GO station.

16By far, the greatest problem for the Appellant living in the subject property is the fact that there is an infestation of raccoons. She complained that the raccoons are active and noisy and get into her attic and keep her awake at nights. Because of this infestation, she believes the home is of a very low value. She argues that no one would want to buy it.

17The Appellant provided the Board with photographs of the interior of the home and the roof. The photographs were taken by her son, Steven Talsky, who accompanied his mother to the hearing and was able to verify that the photographs depicted the state of the home. The photographs show clearly the damage caused by the leaking roof at various times. One photograph showed a very damaged roof, which has since been repaired, but not before interior damage to ceilings and walls took place.

Analysis and Findings

18The Board accepts the seven properties put forward by Mr. Nastich are comparable properties, but does not accept the time-adjusted sales amounts for the reason that almost half the proposed comparable homes actually lost value between the sale date and January 1, 2016. Mr. Nastich’s study of only 65 sales between January, 2012 and February 2017 indicates that prices rose 117% over the period of the study. Three of the proposed comparable sales fell between the sale date and January 1, 2016. Three others increased in the same period and one stayed exactly the same. This discrepancy between the overall results of the study and the seven comparable property sales only served to provide contradictory and unhelpful information. As a result, the Board will not apply the time-adjusted sales figures and, instead, will use the actual sales figures.

19None of the proposed comparable home sales was in the same state of deterioration as the subject property. However, the sales confirmed Mr. Nastich’s evidence that he had taken a number of steps to reduce the value of the subject property based on its lack of repair.

20The Appellant’s evidence largely concerned factors of home ownership which are within the control of the owner. For a number of reasons alluded to by the Appellant, including the breakdown of her marriage, her lack of income, and her physical inability to deal with the repairs to the home on her own, the home became more and more run down. The Appellant is trapped in a dilemma: if she were to sell the home, the amount a buyer would pay for it would be much less than the value of her neighbours’ homes. However, unless she can afford to undertake substantial renovations, the home will continue to deteriorate. Some of the nuisance factors described by the Appellant, including the infestation of raccoons, would be curable if this homeowner had the money to afford pest control and suitable renovations to stop the entry of the animals into the home. Factors such as peeling paint, animal infestations, old and outdated wiring, no air conditioning, and no dishwasher, are all factors within the control of the homeowner. They do not affect value in and of themselves, unless, as is the case here, the situation is severe. However, while the structure itself may not have much value, as here, the land does have a value. Therefore, where Mr. Nastich lowered the current value to below the land value, the other nuisance factors, including proximity to the GO station, will not contribute to a further reduction in value because they have already been included in the global reduction of 20% applied to the land value.

21In this case, the Appellant provided the Board with no evidence respecting the “cost to cure” for the problems, including, for example, gutting and renovating the home, or perhaps demolishing the structure entirely. While the Board is sympathetic with the Appellant’s dilemma, it only has jurisdiction to make decisions based on the evidence available. MPAC has presented evidence showing a reasonable and supportable value which incorporated many of the deficiencies of the subject property. The Appellant presented no evidence which would either contradict Mr. Nastich’s submissions or which would quantify the value of the various nuisance factors. The Board must rely on the best evidence, which, in this case, is Mr. Nastich’s evidence.

2018 DEEMED APPEAL

22An appeal for the 2017 taxation year is presently before the Board. Section 40.(26) of the Assessment Act provides that the appellant is deemed to have made the same appeal for the subsequent taxation year if the appeal is not finally disposed of before March 31 of the subsequent taxation year. The Board has not disposed of the 2017 appeal before March 31, 2018. For that reason, this decision also applies to the 2018 taxation year.

23Section 40.(26) of the Act directs:

Deemed appeals, 2009 and subsequent years

(26) For 2009 and subsequent taxation years, an appellant shall be deemed to have brought the same appeal in respect of a property,

(a) in relation to the assessments under sections 32, 33 and 34 for the year; and

(b) in relation to the assessment, including assessments under sections 32, 33 and 34, for a subsequent taxation year to which the same general reassessment applies, if the appeal is not finally disposed of before March 31 of the subsequent taxation year or, if an assessment has been made under section 32, 33 or 34, before the 90th day after the notice of assessment was mailed.

24The Board finds that the correct value for the subject property located at 10 Mandel Crescent is $779,000 for the taxation years 2017 and 2018 and thereby confirms the assessment returned for both years.