Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: November 20, 2018

FILE NO.: WR 154595

Assessed Person(s): Kimble Ainslie

Appellant(s): Kimble Ainslie

Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 23

Respondent(s): City of London

Property Location(s): 46 – 1096 Jalna Boulevard

Municipality(ies): City of London

Roll Number(s): 3936-060-590-62945-0000

Appeal Number(s): 3186164

Taxation Year(s): 2016

Hearing Event No. 693969 and 701171

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

Heard: May 16, 2018 and July 4, 2018, in London, Ontario

APPEARANCES:

Parties	Representative
Kimble Ainslie	Self-represented
MPAC	Louis Biscaro, Jennifer Mills
City of London	No one appeared

DECISION OF THE BOARD DELIVERED BY DAN WEAGANT

INTRODUCTION

1Kimble Ainslie (“Appellant”) appealed the 2016 assessment of his property at 46-1096 Jalna Boulevard because he believed it was too high. The subject property is a 916 square foot, two bedroom residential condominium unit in a three storey walkup building constructed in 1986. The Appellant believed the correct assessment of the subject property was $93,000, based on its condition and a sale of the subject property that occurred in March 2015.

2For the 2016 taxation year, MPAC returned a value of $99,000. MPAC submitted that this value was based on the sales of properties comparable to the subject property that occurred in proximity to the valuation day stipulated in the Assessment Act (“Act”) for the 2016 taxation year, of January 1, 2012.

3The Board must decide two things in this appeal. Firstly, the current value of the subject property must be determined for the 2016 taxation year, based on the evidence at the hearing. Having reference to the assessments of similar properties in the vicinity, the Board must also determine if the current value found needs to be reduced for the purpose of equitable assessment.

DECISION

4The Board finds that the current value of the subject property for the 2016 taxation year is $101,000. The Board also finds that there is no evidence to support a reduction of this value to achieve equitable assessment. As MPAC has not made an application for an increase in assessment, the returned value is confirmed.

5Accordingly, the assessment of the subject property at 46-1096 Jalna Boulevard, for the 2016 taxation year, is confirmed at $99,000, in the Residential property class.

LEGISLATION

6In making its determination of these appeals, the Board must consider the relevant sections of the Act

7Section 1 of the Act states:

“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.

8Section 19.(1) of the Act states:

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

9Section 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.

What is the Current Value of the Subject Property?

MPAC’s Evidence and Position

10MPAC carried out a valuation of the subject property using the direct comparison approach to value. That approach uses comparable properties in the area that have sold in proximity to the statutory valuation day to approximate the current value of the property under appeal. Differences in characteristics between the comparable properties and the subject property are considered and appropriate adjustments to value are made to arrive at a value that it considers reasonable.

11MPAC selected 20 properties that sold between January 2010 and December 2012 in the same condominium as the subject property. These 20 properties sold in the date range of January 2010 to September 2012. These proposed comparable properties had sale values of between $95,000 and $110,000.

12MPAC testified that the 20 properties in the analysis were chosen because of their similarity to the subject property:

• They are all 916 square foot units with two bedrooms; and
• They are all in the same condominium development as the subject property.

13When the 20 sale values were considered, MPAC submitted that the median sale value was $102,500; indicating that the assessment returned for the subject property of $99,000 is reasonable.

Appellant’s Evidence and Position

14The Appellant sought first to impugn the evidence of MPAC by questioning the Assessor with respect to her personal knowledge of statistical analysis. He further submitted that the assessment reached by MPAC, of $99,000, is not statistically supported by the data. He suggested that, when reference is made to the document “Standard on Ratio Studies” published by the International Association of Assessing Officers (“IAAO”), an organization of authority referred to by MPAC, MPAC’s results do not provide an objective basis for the returned value of $99,000, when the 2015 sale of the subject property of $95,000 is considered.

15The Appellant also submitted evidence to suggest the property under appeal suffered from sub-standard conditions. The conditions submitted included:

• The subject building is of wood construction which is of inferior quality and value when compared to concrete or steel construction;
• The driveway and parking lots at the subject building are in need of repair;
• Carpeting in the subject buildings common areas is stained and in need of replacement; and
• Tiles in stairways are damaged and are in need of replacement or repair.

16The Appellant’s position is that the best indication of the subject property’s current value as of January 1, 2012 is its sale in March of 2015, less a reasonable amount for the cost to cure the exterior and common element shortcomings on the property. He estimates this cost at $2,000, resulting in a current value of $93,000.

Board’s Analysis

17When reviewing the comparable properties used by MPAC, the Board finds that the most comparable are the sales of units on level 3; the same as the subject property. These units have the same disadvantages and advantages derived from their location on the 3rd floor. The other 12 properties advanced by MPAC are on other floors of the building and are less reliable indicators of the value of the subject property as a result.

18There is no discernible difference among these eight remaining properties and the subject property from the evidence. However, three of these eight proposed comparable properties sold in 2010 with sale dates that were 17, 19 and 24 months before the January 1, 2012 valuation day. The Board disregards these three sales as their proximity to the valuation day exceeds the remaining five properties which all sold in either 2011 or 2012, and eight months or less from the valuation day.

19The Appellant submitted that the subject property suffers from a less desirable physical condition. His concerns in this regard apply to elements external to the subject unit. These condition concerns are applicable to all of the comparable properties advanced by MPAC as well. The Appellant did not provide any evidence to support that the subject property was of lesser physical condition that the comparable properties advanced by MPAC.

20The Appellant relied on the amount of the 2015 sale of the subject property. This sale occurred 38 months after the valuation day applicable to the 2016 taxation year under appeal. The Board disregards this sale as it is too far removed from January 1 2012.

21The mean sale price of the five most comparable properties in MPAC’s sample is $100,700 or $101,000, rounded. The Board finds that these five sales are the best evidence of what the subject property would have sold for on or near the valuation day. The Board finds that current value of the subject property is $101,000.

Is a reduction in the current value necessary to achieve equitable assessment when reference is made to the assessments of similar properties in the vicinity?

22The concept of reducing the current value determined to make the subject property’s assessment equitable with that of similar properties in the vicinity requires the Board to change a correct assessment finding to one that is incorrect to make it fair and equitable. Adjustments for this purpose cannot therefore be made without compelling evidence to do so.

23Neither party advanced a specific argument related to this question. However, MPAC’s review of 20 sales in its valuation report indicates that the mean average sale value is $102,000, with a mean average assessed value of $97,971.

24This represents a mean Assessment to Sale Ratio (”ASR”) of 0.9605. The ASR is a commonly used method of determining level of assessment, or equity of assessment, when applied to multiple sales of similar properties in the vicinity. A mean ASR of 0.9605 indicates that, among the sample used, similar properties in the vicinity of the subject property are assessed at approximately 96% of their corresponding sale values. The Board is required, where possible, to consider all elements of comparison available when considering this question of equitable assessment.

25Accordingly, the Board considered the five most comparable properties in MPAC’s sample. These five were all the identical size when compared to the subject property; they all were located in the same condominium development and had sales that occurred in either 2011 or 2012, and within 8 months of the valuation day. The mean ASR of these five properties is 0.983, indicating that, on average, they were assessed at a level of approximately 98% of their sale value.

26When this ASR is applied to the current value determined by the Board, the result is $98,988, or $99,000 rounded. It has been widely held by the Board that ASR studies that result in values above 0.95 indicate that properties are assessed near enough to their current value, based on sales, to be considered equitable. Accordingly, the Board finds that in this case, no reduction in value is necessary for the current value determined for the subject property to be considered equitable. No adjustment is required.

CONCLUSION

27The current value of the subject property is $101,000. There is no evidence to suggest a reduction in this amount is necessary for the purposes of equitable assessment.

28As MPAC did not make application to increase the assessment of the subject property, the assessment of 46 – 1096 Jalna Boulevard is confirmed for the 2016 taxation year at $99,000, in the Residential property class.