Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: January 18, 2018

FILE NO.: WR 144842

Assessed Person(s): Vern William Harding

Appellant(s): Vern William Harding

Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 07

Respondent(s): City of Kawartha Lakes

Property Location(s): 16 Rockway Trail

Municipality: City of Kawartha Lakes

Roll Number(s): 1651-340-020-32500-0000

Appeal Number(s): 3179255

Taxation Year(s): 2016

Hearing Event No.: 652270

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

Heard: December 13, 2016, in Lindsay, Ontario

APPEARANCES:

Parties	Representative
Vern William Harding	Self-represented
MPAC	Judy Piggott
City of Kawartha Lakes	Melita Andrews

DECISION OF THE BOARD DELIVERED BY MARK SPRAGGETT

INTRODUCTION

1The subject property, 16 Rockway Trail, is a lake front seasonal/recreational one- and-one-half storey detached dwelling, located on Balsam Lake. Originally built in 1966 and renovated in 2003, its effective year built is 1996. Having a site area of 17,424 square feet, (s.f.) it has an effective frontage and depth of 114.00 feet and 156.00 feet respectively. With a quality designation of 6.0 and a building total area of 2,084 s.f., the property also contains a boathouse and cabin.

2The subject property was assessed by MPAC at $668,000, as of the valuation date, January 1, 2012 (“CVA”). This is the value of the property for each of the taxation years for the 2013 to 2016 taxation years in the four year assessment cycle, unless there has been a change in the property. In this case, none of the parties assert that there has been a change. Vern William Harding (the Appellant), has filed an appeal in respect of the 2016 taxation year, and it is his position that the CVA should be $600,000. The City of Kawartha Lakes did not participate in this hearing.

3At the completion of the hearing, the Board reserved its decision.

ISSUE

4The Appellant did not assert that an equitable reduction of the CVA is required. Therefore, the sole issue before the Board is what is the correct CVA of the subject property.

DECISION

5In the matter of the current value and for the reasons stated below and as directed by s. 44.(3)(a) of the Assessment Act (“Act”), the Board finds that the current value of the subject property, as at the valuation day January 1, 2012, is $666,000 for the 2016 taxation year.

6Accordingly, the current value assessment of the subject property as at the valuation day, January 1, 2012, is $666,000.

REASONS FOR DECISION

MPAC’S Position

7Judy Piggott, appearing on behalf of MPAC, provided an analysis which used the Direct Sales Approach to Value for the purposes of establishing the current value assessment (“CVA”) of the subject property. Ms. Piggott presented four sales of purportedly comparable properties, concluding that the CVA as returned of $668,000 is reasonable for the subject property. Although three of the suggested comparable properties were found to be inferior to the subject and the remaining fourth comparable being superior, Ms. Piggott determined the subject property’s current value as returned, fell somewhere within the range of $504,000 (rounded) to $866,000 (rounded), based on her analysis of each suggested comparable, stating that the assessment as returned was reasonable

8The Board is being asked to confirm the assessment as returned at $668,000 as of the January 1, 2012 valuation date, for the 2016 taxation year.

Appellant’s Position

9The Appellant appeared as self-represented at this hearing event. Mr. Harding relied on three properties in support of his recommendation to the Board. The Appellant relied on MPAC’s own ‘Comparable Property Report’ detailing the three suggested comparables, namely 1 Otter Road; 11 Otter Road and 15 Otter Road. In addition, the Appellant provided photograph submissions of the subject property’s exterior in relation to neighbouring properties, allegedly illustrating flooding impact on his property from poor drainage and runoff due to a spring melt. Mr. Harding alleges that new construction by his neighbour resulted in obstructing proper drainage of spring melt by blockage of a street culvert. Photographs were provided highlighting the undrained water as a result of the alleged blockage. Mr. Harding also alleges that his neighbours’ eavestroughs in concert with an elevated landscape, negatively impacts on his property with the runoff directed towards his property.

10The Board is being asked to accept the Appellant’s recommended current value of $600,000 as of the January 1, 2012 valuation date, for the 2016 taxation year.

ANALYSIS OF CURRENT VALUE

The Legislation

11Section 19.(1) of the Act states:

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

12Section 1 of the Act defines “current value” as:

“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.

13Section 19.2(1)3 of the Act state:

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 each subsequent period consisting of four consecutive taxation years, land is valued as of January 1 of the year preceding the first of those four taxation years.

Exception

(5) Subsection (1) does not apply in respect of the valuation of land for a taxation year after 2004 if the Minister prescribes a different day as of which land is valued for that year.

14Section 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 as adjustment would result in a reduction of the assessment of the land.

15The initial task for the Board is to determine the current value of the subject property as required by s. 44.(3)(a) of the Act “…the Board shall…determine the current value of the land…”

16Section 19.(1) of the Act states that “…the assessment of land shall be based on its current value…” and s. 1 of the Act defines current value as “…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…”

Current Value

17The best test of current value is an arm’s length and market tested sale of the subject property on the valuation day, January 1, 2012 or close to it. If, as in this case no such transaction took place, the next best measure of current value is arm’s length and market tested sales of comparable properties in the same vicinity and market, on or close to the valuation day. This measure acts as a benchmark and a gauge of the accuracy for the assessed value of the subject property and comparable properties.

18To enable an estimate of value for the subject property to be derived from a comparable property, there must be sufficient elements of similarity, in terms of physical factors such as total building area, land area, land frontage, age of construction, physical condition etc.; and in terms of neighbourhood characteristics such as access to amenities, type and nature of housing etc., so as to enable a direct comparison to be made between the comparable property and the subject property.

19Furthermore, to be indicative of both the market and values on the valuation day, a sale of a suggested comparable property should occur close to the valuation day. Generally, the Board prefers the sale of properties that occur within six months on either side of the valuation day. When such evidence is either limited or not available, the Board has accepted sales of properties up to 18 months on either side of the valuation day, or in exceptional circumstances, greater time periods.

20The Board reviewed the properties presented into evidence by both parties, notably the four suggested sales comparables provided by MPAC, as well as the three suggested comparables submitted by the Appellant.

21Regarding the Appellant’s suggested comparables, the Board finds that only one property had a sale, with the remaining two properties having no sale information. Furthermore, the sole sale occurred in the year 2009, far removed from the January 1, 2012 valuation date, making it unreliable as a valid comparable to the subject property in the determination of current value. The remaining two suggested comparables also lack the requisite sales information for the purposes of determining current value as per s. 19.(1) of the Act and therefore are of no assistance in determining the current value of the subject property.

22The Board finds that the Appellant’s suggested comparables are not comparable to the subject property in terms of location. The subject property is an open lake front property, whereas properties 11 and 15 Otter Road are not lakefront but on a Bay of Balsam Lake, a location considered inferior to a lakefront location of the subject property.

23The Board finds that the Appellant’s suggested comparables are significantly different in lot frontage, lot depth, site area, age, quality classification, building total area, building type and age to that of the subject property, making them unreliable candidates to be comparables. Based on this analysis the Board gives little weight to these suggested comparables in its determination of current value.

24In regards to the Appellant’s submission that drainage problems should negatively impact the current value of the subject property, the Board cannot speculate on the impact any spring thaw may have on the value of the subject property, nor the alleged affects of runoff from neighbouring properties, including blocked street culverts. The Board notes no third party evidence or market evidence of flooding impact, was provided to support the Appellant’s submission. Furthermore, the Board heard no evidence to indicate that the drainage problem is more than a temporary condition. Based on this analysis, the Board gives little weight to this evidence.

25As the Appellant’s suggested comparables are not reliable comparables to the subject property, and it is the mandate of the Board to select the best evidence available from which to arrive at a current value, the Board finds MPAC’s evidence to be the basis from which the Board shall make a determination of current value.

26The Board finds MPAC's suggested comparables are mostly inferior with the exception of one superior property. While the evidence is somewhat limited, the Board is satisfied that the valuation range established from the analysis of these suggested comparables, is sufficiently persuasive to find that the CVA of $668,000 is reasonable. The Table below illustrates the variation in house total area and lot frontages to that of the subject property. The Board finds the three inferior properties have significantly smaller house areas compared to the subject property. Furthermore, the subject property has a larger lot frontage compared to the three inferior properties. For these reasons in particular, the Board finds the value of the subject property to be higher than these properties. The superior property (4 Hardwood St.) is considered the ceiling of the value range being considered for the subject property. As this property has a much larger lot area, a newer house with additional structures, a higher quality classification, the Board finds as reasonable MPAC's recommended CVA of $668,000.

Property	Rating	House Area Sq. Ft.	Lot Frontage Feet	Time Adjusted Sale
Subject		2,084	114
4 Hardwood St.	Superior	2,023	145	866,394
193 Ridge Dr.	Inferior	1,117	100	595,735
24 Treewood Lane	Inferior	1,120	50	503,596
56 West Bay Blvd.	Inferior	1,476	110	507,252

27The Appellant noted that there was an error in the total area of the second floor of the subject property, stating that it should be 68 square feet less. MPAC agreed and indicated the CVA should be reduced by $2,000. The Board finds this downward adjustment is reasonable.

28Accordingly, the Board finds that the CVA of the subject property is $666,000 for the 2016 taxation year.

CONCLUSION

29The assessment of the subject property as of the valuation day, January 1, 2012, is reduced from $668,000 to $666,000 for the 2016 taxation year.