Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: March 28, 2018 FILE NO.: WR 151244

Assessed Person(s): Michael Andrew Bentley Appellant(s): Michael Andrew Bentley Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 16 Respondent(s): City of Barrie

Property Location(s): 63 Barre Drive Municipality(ies): City of Barrie Roll Number(s): 4342-050-003-21544-0000 Appeal Number(s): 3224655 Taxation Year(s): 2017 Hearing Event No.: 693169

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

Heard: February 23, 2018 by telephone conference call

APPEARANCES:

Parties	Representative
Michael Bentley	Self-represented
MPAC	David Zhao, Ziad Al-Hillah
City of Barrie	No one appeared

DECISION OF THE BOARD DELIVERED BY ANTHONY LaREGINA

INTRODUCTION

1The subject property is a single-family, one storey, detached dwelling located at 63 Barre Drive. The dwelling was built in 1993, with construction quality of 6.5. The lot has 38.81 feet of frontage and 130.53 feet of depth for a total effective site area of 7,150 square feet (“sq. ft.”). The dwelling has a total building area of 1,842 sq. ft. on the first floor and 1,842 sq. ft. in the basement of which 1,400 sq. ft. is finished space. The property has an attached garage, abuts a ravine and a basement walkout. The Current Value Assessment (“CVA”) for the 2017 taxation year was returned at $480,000.

2Ziad Al-Hillal, the assessor from MPAC, provided the Board with an estimate of current value of $525,000 based on eight comparable property sales located in the vicinity of the subject property. Mr. Al-Hillal also entered an equity study showing a median Assessment to Sale Ratio (“ASR”) level of 0.966. After careful consideration of Mr. Bentley’s evidence showing the ASR’s of the eight MPAC comparables Mr. Al-Hillal noted that seven of the eight comparable sales were not in the equity study. Mr. Al-Hillal then added the additional seven properties to the equity study, resulting in a median ASR of 0.936. Mr. Al-Hillal made the further adjustment to current value of $525,000 based on the ASR of 0.936 to arrive at a new assessment of $491,400. Mr. Al-Hillal is not requesting an increase in assessment and therefore recommends a confirmation of the $480,000 CVA for the 2017 taxation year.

3Mr. Bentley, the Appellant, concedes that it is very difficult to determine the value of his home because MPAC was not co-operative in making sales information available.

4Mr. Bentley’s estimates that his property CVA should be 15% less than the returned CVA of $480,000, or $408,000.

ISSUES

5The issues to be determined are:

i.) What is the correct current value of the subject property for the 2017 taxation year?

ii.) Is the current value as determined by the Board equitable with the assessments of similar lands in the vicinity?

DECISION

6The Board finds that the current value of the subject property for the 2017 taxation year is $490,485.

7The Board also determines that it would be inequitable to assess the subject property at current value because the evidence shows that property in the vicinity is, on average, assessed at 93.6% of its current value. The Board therefore reduces the current value of $490,485 by 6.4% to arrive at an equitable assessment of $459,074.

8The Board therefore reduces the CVA of the subject property from $480,000 to $459,000 (rounded) for the 2017 taxation year.

REASONS FOR DECISION

Current Value – Evidence and Analysis

9In accordance with s. 44.(3)(a) of the Assessment Act (“Act”) the first mandate of the Board is to determine “the current value of the land”. Section 1 of the Act defines current value 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, for the 2017 taxation year, the Board must determine what the subject property would have sold for in an arm’s length transaction on the January 1, 2016 valuation day set by s. 19.2 of the Act.

MPAC’s Position

10Mr. Al-Hillal presented eight comparable property sales located in the vicinity of the subject property. He testified that all eight sales are similar to the subject property. The first four comparables, 117 Grace Crescent, 132 Taylor Drive, 22 Bloxham Place and 146 Taylor Drive, all have ravine lots while the second four, 33 Grand Forest Drive, 69 and 20 Kingsridge Road and 18 Newberry Court, have no ravines. Mr. Al-Hillal time adjusted all eight comparables to a January 1, 2016 valuation day and made a further 5% positive adjustment to the second four to account for the lack of a ravine. The time plus ravine adjusted sale (“TAS”) values for the eight properties range from $436,165 to $609,440 with sale dates from February 2015 to June 2016.

11The total building area of the eight comparable properties range from 1,510 sq. ft. to 1,833 sq. ft., with all having a similar year built as the subject property. All eight properties are one storey buildings with construction quality of 6.5 and very similar effective lot areas as the subject property. Regarding actual frontage the Board notes that the subject has an actual frontage of 38.81 feet while all of the others, except 22 Bloxham Place, are closer to 50 feet. 22 Bloxham Place has a lot width of 36.94 feet, which is very similar to the actual frontage of the subject property.

12Mr. Al-Hillal determined the mean time and ravine adjusted sale value of the eight comparable properties to be $525,105. Based on this analysis Mr. Al-Hillal recommends a current value for the subject property of $525,000.

The Appellant’s Evidence

13Mr. Bentley entered the sale of 16 properties in support of current value showing that the characteristics of the properties were incorrect or under described by 50% to 75% and therefore asserting that when MPAC uses these comparable sales to establish the current value for his property, his property would be overvalued. Mr. Bentley asserts that these properties have not been inspected and items such as finished basements, air conditioning and the number of bathrooms are understated. Mr. Al-Hillal agreed with Mr. Bentley that for the most part all homes had air conditioning and probably finished basements but confirmed that the purchase price paid by the new owners would account for the features in each of the properties. Mr. Al-Hillal assured Mr. Bentley that these differences would make little difference to the valuation of his property and that the comparables he used were all similar to the subject property.

14Of the sixteen properties entered in support of current value Mr. Bentley relied on the same eight comparables entered by MPAC as they were the most similar and the sale values were time adjusted. Of the remaining eight properties Mr. Bentley entered no additional properties in support of current value. Furthermore the remaining eight properties that sold were not time adjusted.

15In Mr. Bentley’s final summation he estimated that the comparables used by Mr. Al-Hillal were under-described between 50% and 75% and that based on this finding he arbitrarily estimated that his property should be valued at 15% less than the $480,000 CVA set by MPAC or $408,000

Board’s Analysis of Current Value

16The best evidence of current value is the sale of the subject property on or near the valuation date of January 1, 2016. When no such sale occurs, as in this appeal, the Board looks to the recent sale of other similar properties in the vicinity to determine current value.

17The Board normally makes a determination of current value based on sales evidence within the shoulder years of the valuation date in this case January 1, 2016. This will reflect the market value of the subject property as of the valuation date.

18The Board will consider the eight sales comparables provided by MPAC as they are within the shoulder years and properly time adjusted to reflect a January 1, 2016 valuation day.

19Of the eight comparables submitted by MPAC, the first four are the most similar to the subject property as they also have ravine lots. The Board will only use these four sales to establish the current value of the subject property. The Board does not believe a 5% adjustment for properties without ravines accurately reflects the market, or the decision of the willing buyer. Furthermore, no supporting data has been submitted by MPAC to support a 5% adjustment for the ravine.

20The TAS value range of the four properties with ravines is from $436,165 to $609,440. The Board concludes that the current value of the subject property lies within this range.

21The Board will use the adjusted sale value of 22 Bloxham Place $436,165 as the basis to establish the current value of the subject because both these properties have very similar actual frontages. The subject has 38.81 feet verses 22 Bloxham Place which has 36.94 feet. The other three ravine properties have frontage of 50 feet which are larger than the subject property.

22The Board acknowledges that the subject property has a larger building area of 1,842 square feet while 22 Bloxham Place is only 1,638 square feet indicating that the current value of the subject should be higher than the adjusted sale value of 22 Bloxham Place. In order to adjust for the larger building area of the subject property the Board will establish the adjusted sale value per square foot of $226.26 for Bloxham Place and apply it to the building area of the subject property of 1,842 to arrive at a value of $490,453.

23The Board finds that the current value of the subject property is $490,453, which falls within adjusted sale range of the four properties with ravines.

24The Board is in agreement with Mr. Bentley that based on the fact that many of these properties have not been inspected to confirm a finished basement, whether they have air conditioning or the number of bathrooms. The Board therefore relies on Mr. Al-Hillal’s testimony that in fact most homes have air conditioning and finished basements and that these factors have been taken into consideration in the purchase price of the property. Furthermore Mr. Al-Hillal has also testified that these differences have little impact on the overall value of the subject property.

Board’s Analysis of Equity

25Section 44.(3)(b) of the Act directs that after determining current value, the Board shall 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”.

26The Assessment to Sale Ratio (“ASR”) of a sample of sold properties is a tool often used to determine if property in the vicinity is assessed below its current value. If other property is assessed below its current value then a reduction in the assessment below current value is required to make the assessment equitable with the assessments of similar lands in the vicinity. The ASR is determined by dividing the assessment as returned by the TAS.

27Mr. Al-Hillal presented an equity analysis of 30 residential sales with sales that occurred from January 1, 2015 to December 31, 2016, all located within two kilometers of the subject property, which had a median ASR of 0.966. Mr. Al-Hillal submits that MPAC standards indicate that for residential property, the median ASR should fall between 0.95 and 1.05. If the median ratio falls within this range, this reveals that the CVA are reflective of sales prices in the vicinity and therefore no further adjustment is required.

28During cross-examination the appellant entered the time adjusted ASR’s for the eight sales MPAC submitted in support of current value ranging between 0.71 and 1.04. It was also determined during cross examination that MPAC had failed to include seven of the eight sales into the equity study. Having acknowledged the oversight, Mr. Al-Hillal recalculated the median ASR of the 37 properties at 0.936.

29Mr. Bentley also entered into evidence the assessments of 18 similar properties on his own street showing a range of assessments from $376,000 to $469,000. Of the 18 properties four had identical building areas of 1,842 sq. ft. and their assessments ranged from $451,000 to $469,000.

30The Board will accept the revised equity study showing a median ASR of 0.936 based on the larger and more inclusive sample of 37 properties. That ASR indicates that property in vicinity is, on average, assessed well below its current value. It would, therefore, be inequitable to assess the subject property at its current value.

31The Board will make a further downward adjustment to the current value of $490,453 based on the ASR of 0.936 to establish the assessment of the subject property of $459,064, rounded to $459,000. This value is very much in line with the assessments of the four ravine properties that sold to support current value between $438,000 and $465,000 as well as the assessments of the four properties submitted by Mr. Bentley between $451,000 and $469,000 with identical building areas located on the same street.

CONCLUSION

32Based on all of the evidence, the Board reduces the CVA of the subject property from the returned value of $480,000 to $459,000 for the 2017 taxation year.