Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: December 19, 2018 FILE NO.: WR 154597

Assessed Person(s): Christopher Lore and Patricia Mary Lore Appellant(s): Christopher Lore Respondent(s): Municipal Property Assessment Corporation (“MPAC”), Region 15 Respondent(s): Town of Oakville

Property Location(s): 223 Westdale Road Municipality(ies): Town of Oakville Roll Number(s): 2401-020-010-13800-0000 Appeal Number(s): 3259846 and 3307189 (deemed 2018 appeal) Taxation Year(s): 2017 and 2018 (deemed appeal) Hearing Event No.: 694384 and 701902

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

Heard: March 14, 2018 and July 25, 2018 in Oakville, Ontario

APPEARANCES:

Parties	Counsel*/Representative
Christopher Lore	Robert Baranowski
MPAC	Terence Johnston Donald G. Mitchell*
Town of Oakville	Susan Price

DECISION OF THE BOARD DELIVERED BY SUBUOLA AWOLERI, JOANNE LAWS AND MARGARITA OKHOVATI

INTRODUCTION

1This is an appeal of the assessed value of 223 Westdale Road (“subject property”). The Appellant’s representative, Robert Baranowski, argued that the assessment, as of the January 1, 2016 valuation day, should be in the range of $1,001,853 to $1,075,854.

2MPAC argued that the correct current value for the 2017 and 2018 taxation years is $1,281,402 ($1,281,000 rounded) and that based on its equity analysis it should be reduced to $1,210,545 ($1,210,000 rounded).

3The assessment as returned for the 2017 and deemed 2018 taxation years is $1,227,000 in the residential taxation class.

ISSUES

4The issues to be determined are:

i.) Does the subject property abut Green Space or an educational institution?

ii.) What is the correct current value of the subject property for the 2017 and 2018 taxation years?

iii.) Is the current value as determined equitable in reference to the assessments of similar lands in the vicinity?

DECISION

5We find that the subject property abuts Green Space and not an educational institution.

6We find that the current value of the subject property, as of the January 1, 2016 valuation day, is $1,599,000.

7We find that an assessment below current value, at $1,551,000, is required to ensure that the assessment of the subject property is equitable with the assessments of similar lands in the vicinity.

8However, this value exceeds the assessment as returned. Because no one is seeking an increase in the assessment, we confirm the assessment of $1,227,000 in the residential property class for the 2017 and deemed 2018 taxation years.

LEGISLATION

9Section 44.(3)(a) Assessment Act, R.S.O. 1990, c. A.31 (the “Act”), requires the Assessment Review Board (“Board”) to “determine the current value of the land”. Current value is defined in s. 1 as “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”. That is, we must determine what the subject property would have sold for in an arm’s length transaction on the valuation day, set pursuant to s. 19.3 of the Act, which, in this case is January 1, 2016 for the 2017 and 2018 taxation years.

10Once we have determined the current value, s. 44. (3)(b) of the Act requires that we “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” but only if that adjustment would result in a reduction of the assessment.

PRELIMINARY MATTER

11On March 14, 2018, at the commencement of the hearing of this appeal, Mr. Baranowski raised an issue regarding the description of the subject property, specifically that it does not abut Green Space as disclosed by MPAC, but an educational institution, and that the valuation of the subject property should reflect this. He argued that Green Space is defined as publicly owned land and that the 4% positive adjustment for abutting Green Space should be removed and a 2% negative adjustment for abutting an educational institution should be applied to the assessment of the subject property.

12MPAC and the Town took the position that ownership is not a criterion for the definition of Green Space.

13We requested further written submissions from the parties on three questions:

a. What is Green Space?

b. What is the criterion for abutting Green Space, specifically whether ownership determines if a property abuts Green Space? and

c. Whether the subject property abuts Green Space.

What is Green Space?

14Mr. Baranowski argued that the subject property abuts an educational institution and not Green Space without furnishing this panel with any analysis or relevant case law on how he reached this conclusion. He provided MPAC documents in Tabs 1-3 of his written submissions that do not contradict MPAC’s and the Town’s argument. The definition of Green Space in Tab 5 of his submission in a report titled Green Space Acquisition and Stewardship in Canada’s Urban Municipalities is specific to this report and not for valuation purposes. The Report states that the purpose is to provide an overview of the state of Canada’s urban green space with a focus on municipal green space needs, standards, and expenditures. Tabs 5, 6 & 7 of the Appellant’s evidence also focus on municipal green space. None of his documents support his position that green space is limited to publicly owned lands.

15MPAC and the Town agree to the definition of Green Space as provided in MPAC’s document titled MPAC’s Residential Valuation Theory and Data Collection Manual, as “property that abuts or is in proximity to any open green space or park providing a positive view”. Furthermore, that the “area will not be developed and is designated as Green Space or Open Space by Municipal zoning bylaw or designation”. This excludes playgrounds and sports fields. MPAC and the Town further submit that the section of the land owned by Appleby College physically touching the subject property is zoned environmental, and is under the jurisdiction of the Halton Region Conservation Authority. It is a natural area and its permitted uses are limited, which includes Conservation, Private Park, Public Park, etc. These permitted uses run with this section of the land. We prefer this approach as it deals specifically with valuation of properties.

Does Ownership Determine if Land is Green Space?

16MPAC and the Town submit that from the definition of Green Space as provided in MPAC’s document, ownership of the abutting Green Space is not a criterion, that Appleby College is limited to the permitted uses and that it is inconsequential that the natural area belongs to Appleby College. The Appellant provided no submission on this. We accept MPAC and the Town’s submission that the abutting green space ownership is not a criterion for determining if a property abuts Green Space.

Does the Subject Property Abut Green Space?

17We find that the subject property abuts Green Space.

18MPAC and the Town have provided evidence, on the balance of probabilities, that the subject property abuts green space. We accept MPAC’s definition of Green Space and that ownership is not a criterion. This finding is supported by the photographs provided by all three parties that show the subject property abuts a naturalized area which provides a buffer between the College and the subject property.

19Moreover, the first legislative mandate of the Board is to determine the current value of the subject property, this would be determined by the sale of the subject property. If there is no recent sale of the subject property, we would then review sales of similar properties at or close to the valuation date of January 1, 2016. The sale of similar properties in proximity to the subject property with the same locational and site influences will reflect how those locational and site influences impact market values. As a result, the determination that the subject property abuts green space has little impact on our mandated valuation exercise.

20Regarding the second issue raised by Mr. Baranowski in his written submissions on Green Space, on the effective lot size of the subject property vis-à-vis the conservation authority’s jurisdiction, this was not raised at the commencement of the hearing and it is not one of the questions before us.

CURRENT VALUE

Description of the Subject Property

21223 Westdale Road is located in southwest Oakville in an area bounded by Lakeshore Road West to the west, Appleby College to the north, and Lake Ontario to the east. The lot has a 100 foot frontage, a 156 foot depth and an effective site area of 0.35 acres.

22The lot is improved with a single family detached bungalow built in 1956. The bungalow underwent renovations in 2001 which included a 226 square foot (“sq. ft.”) addition. The total building size is 1,662 sq. ft. with the same area in the basement, 800 sq. ft. of which is finished. There is a 726 sq. ft. attached garage. MPAC has allocated an effective year built of 1962 due to the 2001 renovations and addition and has allocated a 6.5 quality of construction to the bungalow.

Evidence and Finding of Current Value

23MPAC has assessed the subject property at $1,227,000 and submits that its current value evidence supports a value of $1,281,000 and its equity evidence supports a value of $1,210,000. Mr. Baranowski objected to MPAC seeking a higher current value than the returned assessment and submitted Hamill v Municipal Property Assessment Corp, Region No 15, [2014] O.A.R.B.D. No. 59. In reviewing the decision, we see that MPAC requested the Board find a higher current value than the assessment as returned but the Member made no findings on this issue. We further note that MPAC is not seeking a higher assessment for the subject property despite its sales evidence indicating that the current value is higher than the assessed value.

24Mr. Baranowski argued that because Appleby College is an educational institution, and because MPAC’s model provides that a -2% adjustment may be applied to assessments of properties which abut educational institutions, the subject property should receive such an adjustment. We disagree. We have found that the area of Appleby College which abuts the subject property is a natural area, a green space. Both MPAC and the Town of Oakville agree that Appleby College is not a typical educational institution and that it has a positive influence on area sale prices. We received no evidence that Appleby College was a nuisance or that it negatively affects sale prices in the area. Accordingly, we reject Mr. Baranowski’s argument that a negative adjustment is warranted for abutting an educational institution.

25Mr. Baranowski argued that the subject property is located within a designated conservation area, and, as such, no additional development is allowed or that development may be difficult to achieve. He argued that the land value should be reduced by 50%. No evidence was presented to support this effect on value or that there are restrictions on development on the subject property.

26The best evidence of the current value of a residential property is an arm’s length sale of that property on or near the valuation day. When that evidence is not available, arm’s length sales of similar properties on or near the valuation day are the next best evidence.

27The parties presented a total of four property sales which are summarized in Table 1. Each sale occurred within a year of the valuation day and is located between 0.03 and 0.32 kilometres from the subject property. MPAC presented Sales 1, 2, 3 and 4. The Municipality presented Sales 1, 3 and 4 and the Appellant presented Sale 1. They are similar to the subject property in lot size, in that they are all bungalows of a comparable age with the same quality of construction (6.5). Included in Table 1 are MPAC’s time adjusted sale values as of the January 1, 2016 valuation day. All three parties relied on MPAC’s time adjustment factors and values.

Table 1

	Subject Property	Sale 1 235 Tilford Road	Sale 2 232 Tilford Road	Sale 3 231 Westdale Road	Sale 4 1021 Westdale Road
Effective Lot Size in feet (frontage and depth) and area in acres	100 x 156 0.35	74 x 169* 0.35	100 x 150 0.35	100 x 156 0.36	100 x 184 0.35
Year Built/ Effective Year Built	1956/1962	1956	1956	1957/1976	1956
Building Area (sq. ft.)	1,662	1,713	1,599	2,071	2,150
Basement/Finished Basement (sq. ft.)	1,662/800	1,713/600	1,599/nil	2,071/1,810	2,150/1/750`
Garage Area (sq. ft.)	726	480	480	489	480
Pool	No	No	No	No	Yes
Sale Date	N/A	April 2016	November 2016	September 2015	August 2015
Sale Amount	N/A	1,252,000	1,680,000	1,500,000	1,605,000
Time Adjusted Sale Amount	N/A	1,179,210	1,417,504	1,598,682	1,743,359

*235 Tilford is a corner lot with an actual frontage of 158 feet and an actual depth of 69 feet.

Bracketing of Sales

28We find that 235 Tilford Road is inferior to the subject property. Compared to the subject property it has a similar sized lot and the building is slightly larger. However, it is a corner lot, which MPAC testified is less desirable in the marketplace. It does not abut green space, it has not been renovated and the garage is somewhat smaller. For these reasons, the subject property would likely sell for more than the time adjusted sale price of $1,179,210.

29We find that 232 Tilford Road is inferior to the subject property. Compared to the subject property it has a similar sized lot and building but it has not been renovated, there is no finished basement area, the garage is smaller, and it does not abut green space. For these reasons, the subject property would likely sell for more than the time adjusted sale price of $1,417,504.

30We find that 231 Westdale Road is similar to the subject property. The building size is larger, however the garage area is smaller. The lots are a similar size, the buildings are a similar age and it, too, has been renovated. It is located next door to the subject property, on the same side of Westdale Road, and backs onto the same green space as the subject property. For these reasons, the subject property would likely sell for $1,598,682.

31Susan Price, the Town of Oakville’s representative, testified that 1021 Westdale Road was demolished in May 2016. However, we find that at the time of the sale, and on the January 1, 2016 valuation day, it was superior to the subject property. It backs onto green space, has a similar sized lot and had not been renovated. However, the building area is almost 30% larger than the subject property. Accordingly, the subject property would likely sell for less than the time adjusted sale price of $1,743,359.

32Based on a bracketing analysis, we find that the subject property would likely sell for $1,599,000, rounded.

Land Value

33The evidence of Susan Price, the Town of Oakville’s representative, is that 1021 Westdale Road was demolished in May 2016, shortly after its sale. Donald Mitchell, MPAC’s counsel, argued that this sale can also be considered a land sale and we agree. The lot is a similar size to the subject and it backs onto green space. This sale indicates that similar residential land sales may fetch over $1,700,000.

Findings on Current Value

34The most likely indication of the subject property’s current value is the most comparable property, 231 Westdale Road. This sale indicates that the subject property’s current value is $1,599,000. The second most likely indication of current value is the ‘land sale’ of 1021 Westdale Road which indicates that the subject property may sell in the vicinity of $1,700,000. Based on the above analysis, we find that the current value of the subject property, as of the January 1, 2016 valuation day, would be no lower than $1,599,000. This is the current value.

EQUITY

35Once we have determined the subject property’s current value we must also consider the assessments of similar properties in the vicinity and determine whether the current value, as established, is inequitable relative to those assessments. If so, the current value should be adjusted to make it equitable, as required by s. 44.(3)(b) of the Act.

36Mr. Baranowski argued that five properties are sufficient to determine equity because the properties in his sample are very similar to the subject property. He presented the four sales used for determining the current value plus 606 Lakeshore Road West, a sale that had been disclosed by the Municipality but was later withdrawn. Using the time adjusted sale prices, the median assessment to sale ratio (“ASR”) for these five properties is 0.88 and the average is 0.90.

37Mr. Johnston presented an equity analysis of 30 residential properties that sold within 5 kilometres of the subject property. He submitted that, like the subject property, they are all single family homes. Like Mr. Baranowski, he used the time adjusted sale prices and found that the median ASR was 0.945.

38Mr. Baranowski argued that the word ‘similar’ in s. 44.(3)(b) of the Act means similar in all aspects such as lot and building sizes, number of floors, age, etc. In support of this argument, he submitted Municipal Property Assessment Corporation v. 699958 Ontario Ltd., 2005 CanLII 37002 (ON SCDC). We note that this was a motion for leave to appeal a Board decision that was denied. Mr. Baranowski relied on the wording in paragraph 2 which appears to be a summary of the moving party’s argument rather than a decision.

39Mr. Baranowski submitted five decisions where Board Members used a small sample of sales to determine equity. We have reviewed these decisions and note that the Members relied on the smaller sample because either a larger sample was not provided by the parties or the Member found fault with a larger sample.

40For the purpose of establishing equity using ASRs, we find that properties do not need to be as similar as it is needed in the determination of current value. As determined by the Ontario Divisional Court in Municipal Property Assessment Corp. v. Loblaw Properties Ltd., 2017 ONSC 1299, [2017] O.J. No. 1010 ONSC 1299, “…All points of comparison must be considered…” The 30 single – family detached homes selected by MPAC within 5 kilometres of the subject property are similar to the subject property, in terms of location, nature, and use of these properties. We are satisfied that the criteria of similar lands have been met in MPAC’s equity analysis.

41The ASR is a test of whether MPAC’s model is statistically sound. We prefer a larger sample over a smaller sample because a larger sample will give a more accurate picture of whether the model is working well. An ASR that is below 1.00 indicates that MPAC’s model is tending to under-assess properties.

42Accordingly, we prefer Mr. Johnston’s equity analysis which contains a larger sample of properties. We find that MPAC is under-assessing residential properties in the vicinity of the subject property. Applying MPAC’s equity analysis factor of 0.945 to the current value of $1,599,000 results in a value of $1,551,000, rounded.

CONCLUSION

43We find that the current value of the subject property, as of the January 1, 2016 valuation day, is $1,599,000 for the 2017 and deemed 2018 taxation years. However, the evidence shows that this value is inequitable and should be reduced to $1,551,000 in order to make the assessment equitable with the assessments of similar land in the vicinity.

44This value exceeds the assessment as returned of $1,227,000. Because no one has served a notice to increase the assessment pursuant to Rule 40 of the Board’s Rules of Practice and Procedures, we confirm the assessment of $1,227,000 in the Residential Property Class for the 2017 and 2018 taxation years.