Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: April 03, 2018

FILE NO.: WR 150793

Assessed Person(s): Krystyna Lazaridis, Nick Lazaridis

Appellant(s): Krystyna Lazaridis, Nick Lazaridis

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

Respondent(s): City of Toronto

Property Location(s): 86 Hillside Drive

Municipality(ies): City of Toronto

Roll Number(s): 1906-032-330-00920-0000

Appeal Number(s): 3254255

Taxation Year(s): 2017

Hearing Event No.: 692564

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

Heard: December 8, 2017 and January 22, 2018 by teleconference call

APPEARANCES:

Parties	Counsel+/Representative
Krystyna Lazaridis, Nick Lazaridis	Self-represented
MPAC	Andre Campbell
City of Toronto	No one appeared

DECISION OF THE BOARD DELIVERED BY MARCELLE BOURASSA

BACKGROUND

1Krystyna Lazaridis (the “Appellant”) is the owner of 86 Hillside Drive (the “Subject Property”) in the City of Toronto (the “Municipality’). It is a three-storey single family home (not on water) located on a cul-de-sac with an irregular shaped lot with a total effective area of 0.1 acres or 4,160.68 square feet (“sq. ft.”) and 41.37 ft. of effective frontage. It has a 3,141 sq. ft. of total building area, a basement with 966 sq. ft. of finished basement area and an attached garage. The property was built in 2012 and MPAC has assigned it a quality of construction rating of 7.5. It also received variable adjustments: for location on a ravine (positive 4%), for abutting two multi-residential properties (negative 5%) and a further negative adjustment of 10% due to nuisances for proximity to multi-residential properties.

2For the 2017 taxation year under appeal, MPAC returned the assessment for the Subject Property at $1,602,000.

3The Appellant has appealed the assessment for the 2017 taxation year to the Assessment Review Board (the “Board”), pursuant to s. 40 of the Assessment Act (“Act”). It is the Appellant’s position that MPAC’s assessment is too high and that the correct current value is $1,332,000. She expressed the view that MPAC has not given consideration to the Subject Property’s unique circumstances in that a portion of the Subject Property (approximately 26%) is roadway which forms part of a cul-de-sac/right-of-way that is shared with two other property owners. She also takes the position that, based on her estimated current value of $1,332,000, an equitable reduction of this current value, pursuant to s. 44.(3)(b) of the Act, is not required.

4Pursuant to the Act, the burden of proof as to the correctness of the current value of the Subject Property rests with MPAC. For the period of 2017 - 2020, the Subject Property is valued as of January 1, 2016. MPAC’s representative, Andre Campbell, initially estimated the current value of the Subject Property to be $1,520,000, based on the direct comparison approach, with no adjustment in equity being required. It was his initial position that the assessment should be reduced to $1,520,000 for the 2017 taxation year.

5However, during the hearing an issue arose as to the actual and effective frontage measurements utilized by MPAC. The hearing was adjourned for further investigation and review by MPAC. At the resumption of the hearing, Mr. Campbell advised the Board that the Subject Property’s actual frontage is 40.09 ft. and its effective frontage is 41.37 ft. The effective site area of 4.160.68 sq. ft. remains unchanged. Based on these corrected measurements, he revised his estimate of current value as $1,488,000. He also takes the position that an equitable reduction of this current value pursuant to s. 44.(3)(b)of the Act is not required.

6Pursuant to s. 40.(11) of the Act, the Municipality is a party to this proceeding. However, no one from the Municipality appeared at the hearing.

7At the completion of the hearing, the Board reserved its decision.

DECISION

8For the reasons that follow, the Board finds the current value of the Subject Property as of the January 1, 2016 valuation date is $1,473,000. Furthermore, the Board finds that the evidence does not lead to the conclusion that the current value, as determined, is inequitable relative to the assessments of similar lands in the vicinity. Therefore, a further adjustment under s. 44.(3)(b) of the Act is not required.

9Accordingly, for the 2017 taxation year, the assessment is reduced from $1,602,000 to $1,473,000.

Relevant Legislation

10Section 1 of the Act states:

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.

11Section 19.1(1) of the Act states:

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

12Section 19.2(1) of the Act states:

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.

13Section 40.(17) of the Act states:

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.

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 an adjustment would result in a reduction of the assessment of the land.

ISSUES

15The issue(s) to be determined on this appeal are:

1. What is the correct current value of the Subject Property as of the January 1, 2016 valuation date;

2. Whether there should be an equitable reduction of the current value pursuant to s. 44.(3)(b) of the Act, and, if so, what the amount of this reduction should be.

Discussion, Analysis and Findings

Issue No. 1: What is the correct current value of the Subject Property as of the January 1, 2016 valuation date?

MPAC’S Evidence

16Mr. Campbell relies on a Valuation Report. He provided information on the sales of four properties with time adjusted sales (“TAS”) that range from $1,426,493 to $1,912,531 that occurred between January 1, 2015 and December 31, 2016. He provided information on the sales of these properties.

17He stated that the property located at 53 Don Valley Drive has a larger effective site area of 0.28 acres, a smaller effective frontage of 35.1 sq. ft., a similar total building area of 3,154 sq. ft., and a lower quality of construction rating of 7 than the Subject Property. It underwent a substantial “D” renovation in 2006 that also added 2,217 sq. ft. and has an effective year built of 2004. Like the Subject Property, it is located on a ravine and receives a positive variable adjustment. It sold in August 2016 for $2,035,000 (TAS of $1,912,551).

18He stated that the property located at 6 Barbara Crescent has a slightly larger effective site area of 0.19 acres, a larger effective frontage of 45 ft. 1 ft., a larger total building area of 3,296 sq. ft., and a lower quality of construction rating of 7 than the Subject Property. It underwent a “C” renovation in 2004 that also added 2,358 sq. ft. and has an effective year built of 2005. Like the Subject Property, it is also located on a ravine and receives a positive variable adjustment. It sold in September 2015 for $1,465,000 (TAS of $1,510,000).

19He stated that the property located at 43 Don Valley Drive has a larger effective lot size at 0.23 acres, a smaller effective frontage of 38 ft., a smaller total building area of 2,532 sq. ft., and a lower quality of construction rating of 6 than the Subject Property. It underwent a “C” renovation in 1986, 522 sq. ft. were added in 2004 and it has an effective year built of 1984. Like the Subject Property, it is also located on a ravine and receives a positive variable adjustment. It sold in September 2016 for $1,530,000 (TAS of $1,426,493).

20He stated that the property located at 18 Davies Crescent has a similar effective lot size at 0.12 acres, a smaller effective frontage of 36 ft., a smaller total building area of 2,759 sq. ft., and the same quality of construction rating of 7.5 than the Subject Property. It was constructed in 2014. Like the Subject Property, it is also located on a ravine and receives a positive variable adjustment. It also receives a negative 14% variable adjustment for heavy traffic. It sold in February 2012 for $1,550,000 (TAS of $1,530,403). He considers this property as most comparable to the Subject Property.

21Mr. Campbell stated that the median selling price was $1,520,261 and the average selling price was $1,594,892. Based on the direct comparison approach, he estimates the correct current value of the Subject Property to be $1,520,000, which is the median selling price of the four sales comparables. However, as it was subsequently confirmed that the Subject Property’s actual frontage is 40.09 ft. and its effective frontage is 41.37 ft. (and not 46.95 ft. and 48.16 ft., respectively). Mr. Campbell stated that his revised estimate of current value is $1,488,000.

22In response to a question by the Board, Mr. Campbell provided details for 87 and 89 Hillside Drive. He stated that neither property receives any variable adjustments and are located on smaller lots. He stated that the property at 89 Hillside Drive has a total site area of 2,457.40 sq. ft., a total building area of 1,096 sq. ft. and a quality of construction rating of 7.5. He noted that it sold in November 2015 for $989,000 (TAS $1,001,828) and is assessed at $1,096,000. He stated that the other property at 87 Hillside Drive did not have a sale and is assessed at $1,091,000.

MPAC Representative’s Submissions

23MPAC uses effective frontage measurements in equalizing lot dimensions.

24Mr. Campbell submits that the current value of the Subject Property is $1,488,000.

25Mr. Campbell submits that MPAC has no way to quantify the effect, on the determination of current value, of the fact that a portion of the Subject Property’s site area includes a roadway.

Appellants’ Evidence

26Ms. Lazaridis represented herself and her husband.

27She stated that her husband is a builder.

28Ms. Lazaridis provided a copy of her survey and the Maintenance Agreement entered into among the owners of 86, 87 and 89 Hillside Drive. The owners share a private cul-de-sac /driveway and have granted each other reciprocal easements/rights-of-way with respect to the cul-de-sac/driveway to accommodate vehicular access to their respective properties that have been registered on title. The owners (not the City of Toronto) are responsible for winter maintenance and street cleaning and maintenance of services.

29She expressed her view that MPAC has not given due consideration to the Subject Property’s unique circumstances in that 26% of the Subject Property’s site area is roadway which forms part of the above described shared cul-de-sac/right-of-way.

30Ms. Lazaridis expressed her view that none of MPAC’s comparables have a road included in their respective site areas.

31Ms. Lazaridis also expressed her view that MPAC has not taken into account that there is a lot of traffic on their street and that the Subject Property is next to a run-down apartment building with only a curb to separate the properties. She further stated that the ravine is very steep and there is a lot of noise, as the Subject Property backs onto the Don Valley Parkway (“DVP”). She expressed the view that while the ravine adds privacy, it is very steep and the noise from the DVP would also make it more difficult to sell the Subject Property.

32Ms. Lazaridis expressed the view that the property at 89 Hillside Drive is very comparable to the Subject Property and is subject to the same easements/rights-of-way with respect to the cul-de-sac/driveway. She stated that it was built around the same time by the same builder (her husband) with similar finishes. It sold in March 2010 for $739,000 and again in November 2015 for $989,000. She asserts that there was in increase in value of 25% over a period of 5.5 years. She stated that in applying a 5% increase per year to the 2012 current value assessment (“CVA”) of $1,110,000 over the four year period of January 1, 2012 to January 1, 2016 to the Subject Property, represents an increase in value of $220,000. She estimates the current value of the Subject Property to be $1,332,000 using the same formula.

33Ms. Lazaridis also provided a letter from her real estate agent, John Grigoriadis, who expresses the opinion that the Subject Property has a market value of between $1,200,000 and $1,250,000. In support of his opinion, the letter in includes his observation that there are two multi-residential properties (a 6-plex and a 12-plex) adjacent to the Subject Property. His opinion letter also attaches several Multiple Listing Services (“MLS”) listings were.

Appellants’ Submissions

34Ms. Lazaridis submits that MPAC has not given due consideration to the Subject Property’s unique circumstances in that 26% of the Subject Property’s site area is roadway which forms part of a shared cul-de-sac/right-of-way. She also submits that MPAC has not given consideration to the level of traffic on their street, the proximity of the rundown apartment building, the steepness of the ravine and the noise from the DVP.

35Ms. Lazaridis submits that none of MPAC’s comparables have a road included in their respective site areas.

36Ms. Lazaridis asserts that the current value of the Subject Property to be $1,332,000.

37In response to Mr. Campbell’s submission that MPAC has no way of quantifying the effect on current value of a portion of the Subject Property’s site area being roadway, Ms. Lazaridis relies on the opinion of her real estate agent that the Subject Property has a market value of between $1,200,000 and $1,250,000.

Findings on Issue 1

38The initial task of the Board is to use the best evidence available to determine the current value of the property as required by s. 1, s. 19.(1) and s. 44.(3)(a) of the Act.

39The best evidence the Board can receive of current value is an arm’s length and market-tested sale of the Subject Property on the valuation day 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 located nearby, as close as possible to the valuation date of January 1, 2016. The measure acts as a benchmark and a gauge of the accuracy for the assessed value of the Subject Property and comparable properties.

40To enable an estimate of value for the Subject Property to be derived from suggested comparable properties, there must be sufficient elements of similarity, in terms of physical factors such as building area, land area, land frontage, age of construction, physical condition, etcetera so as to enable a direct comparison to be made between a suggested comparable property and the Subject Property.

41MPAC proposes a revised estimate of current value is $1,488,000 which is slightly lower than the median TAS of $1,520,000 for MPAC’s four sales comparables.

42The Board has considered the sales in evidence.

43The property located at 53 Don Valley Drive is located in the same homogeneous neighbourhood as the Subject Property and is also a ravine property. It is similar with a total building area of 3,154 sq. ft. However, it differs from the Subject Property in several respects – it has a much larger effective site area of 0.28 acres, a smaller effective frontage of 35.1 sq. ft. and a lower quality of construction rating of 7. It was originally built in 1941 and underwent a “D” renovation in 2006 that also added 2,217 sq. ft. for an effective year built of 2004. It has a TAS of $1,912,551. The Board finds this property to be superior to the Subject Property.

44The property located at 43 Don Valley Drive is located in the same homogeneous neighbourhood as the Subject Property and is also a ravine property. It differs from the Subject Property in many respects - it has a larger effective lot size at 0.23 acres, a slightly smaller effective frontage of 38 ft., a much smaller total building area of 2,532 sq. ft. and a much lower quality of construction rating of 6. It was originally built in 1944 and 522 sq. ft. were added in 1984. It underwent a “C” renovation in 1986 for an effective year of 2004. It has a TAS of $1,426,493. The Board finds this property to be inferior to the Subject Property notwithstanding the larger lot size.

45The property located at 6 Barbara Crescent is located in a different homogeneous neighbourhood and is the furthest comparable away from the Subject Property. It is also a ravine property. It differs from the Subject Property in several respects - it has a larger effective site area of 0.19 acres, a much larger effective frontage of 45 ft. 1 ft., a slightly larger total building area of 3,296 sq. ft. and a lower quality of construction rating of 7. It was built in 1943 and underwent a “C” renovation in 2004 that added 2,358 sq. ft. and has an effective year built of 2004. It has a TAS of $1,510,000. The Board finds this property to be superior to the Subject Property given its larger site area, frontage and building area.

46The property at 18 Davies Crescent is comparable to the Subject Property in many respects with its similar effective lot size at 0.12 acres, the same quality of construction rating of 7.5.and its location of a ravine. However, it has a smaller effective frontage of 36 sq. ft. and a smaller total building area of 2,759 sq. ft. It also receives a negative 14% variable adjustment for heavy traffic whereas the Subject Property receives a negative 15% variable adjustment for abutting and nuisance for proximity to two multi-residential properties. It sold in February 2012 for a TAS of 1,530,403. This property shares many similarities with the Subject Property. However, the Board finds 18 Davies Crescent to be slightly superior, as the Subject Property abuts two multi-residential properties, which is a less desirable feature.

47As noted above, Ms. Lazaridis referred to an opinion letter from their real estate agent, Mr. Grigoriadis, that the Subject Property has a market value of between $1,200,000 and $1,250,000, citing his investigation and analysis and because there is a 6 plex and a 12 plex adjacent to the property. Although he provided several MLS listings key details including the total buildings area, age and condition were not available to make meaningful comparisons with the Subject Property. For this reason, the Board finds that it cannot rely on this letter of opinion. In further support of this finding, the Board notes that Mr. Grigoriadis’ opinion of market value is lower than Ms. Lazaridis’ view that the current value of the Subject Property is $1,332,000. The Board also notes that the Ms. Lazaridis referred to this letter of opinion only to respond to MPAC’s assertion that it has no way to quantify the effect on current value of a portion of the Subject Property’s site area being roadway. However, the letter of opinion only references the 6 plex and 12 plex buildings adjacent to the Subject Property and not the issue of the roadway.

48Ms. Lazaridis has expressed the view that the property at 89 Hillside Drive is very comparable to the Subject Property and is subject to the same easements/rights-of-way with respect to the cul-de-sac/driveway. It also had a TAS sale of $1,001,828. The Board finds that this property shares similarities with the Subject Property in terms of similar finishes, a quality of construction rating of 7.5, year of build and being subject to the same easements/rights-of-way with respect to the cul-de-sac/driveway. However, its total site area at 2,457 sq. ft. is about half of the size of the Subject Property and it total building area at 1,728 sq. ft. is about two thirds of the size of the Subject Property and so the Board finds that it is not comparable.

49Ms. Lazaridis referenced the property at 89 Hillside Drive in order derive an estimated current value for the Subject Property, noting that none of MPAC’s sale comparables have a road included in their respective site areas. By applying a 5% increase per year to the 2012 CVA of $1,110,000 over the four year period of January 1, 2012 to January 1, 2016 to the Subject Property, represents an increase in value of $220,000. She estimates the current value of the Subject Property to be $1,332,000.

50The Board does not accept Ms. Lazaridis’ suggested approach as the Board finds that there are sufficient sales comparables in evidence to determine a current value for the Subject Property. The Board concludes that the current value falls within the range of TAS $1,426,493 (43 Don Valley Drive) and TAS 1,530,403 (18 Davies Crescent). The Board sets the current value at the midpoint of the range at $1,473,324 or $1,473,000 (rounded). This value is just slightly lower than MPAC’s revised opinion of current value of $1,488,000.

51Ms. Lazaridis also raised her concerns that MPAC has not considered the level of traffic on their street, their proximity to a rundown apartment building next door, the steepness of the ravine and the noise from the DVP.

52The Board notes that MPAC has addressed the location on a ravine with a positive 4% variable adjustment. However, Ms. Lazaridis’ assertion that a higher adjustment is required due to the steepness of the ravine is not supported by any evidence. Therefore, on the evidence adduced, the Board accepts that the adjustment should be 4%. For the same reason, the Board accepts MPAC’s variable adjustments respecting the two abutting multi-residential properties (negative 5%) and the nuisances for proximity to multi-residential properties (negative 10%). The Board also finds that there is insufficient evidence before it to quantify an adjustment for the level of traffic, noise from the DVP or the effect of a portion of the Subject Property’s site area being roadway.

Issue No. 2: Whether there should be an equitable reduction of the current value pursuant to s. 44(3) (b) of the Act, and, if so, what should the amount of this reduction be.

MPAC’S Evidence

53Mr. Campbell also relies on an Equity Analysis Report that considered the TASs of 30 single family detached properties that occurred within the period of January 1, 2015 to December 31, 2016 and that are located within a radius of 1 kilometre from the Subject Property.

54In his report, he states that the level of appraisal is established by determining the median Assessment to Sale Ratio (“ASR”) in the sales sample. The International Association of Assessing Officers (“IAAO”) standards state that the level of appraisal for all property types should fall between 0.90 -1.10. In this instance, the sales sample produced a median ASR of 0.964 which is within the target level of appraisal.

55Appraisal uniformity among individual properties is measured by determining the average percentage deviation from the median ASR, known as the Coefficient of Dispersion (“COD”). In this case, the COD is 6.7% which is below the IAAO standard of CODs of not more than 15% for residential properties. It means that individual ASRs differ, on average, by 6.7% from the median ASR.

56Therefore, he concludes that the Subject Property is equitably assessed relative to the assessments of similar lands in the vicinity and that no further adjustment under s. 44.(3)(b) of the Act is required.

MPAC’s Submissions

57Mr. Campbell submits no adjustment in equity is required under s. 44.(3)(b) of the Act.

Appellant’s Evidence/Submission

58Ms. Lazaridis is not asking for her estimate of current value of $1,332,000 to be reduced further in equity.

Findings on Issue 2

59Section 44.(3)(b) of the Act requires that the Board address the issue of whether an equitable reduction of the current values of Subject Property for the 2017 taxation year.

60None of the parties assert that an adjustment under s. 44.(3)(b) of the Act is required. Accordingly, the Board finds that the evidence does not lead to the conclusion that an adjustment to reduce the current value of the Subject Property is required.

CONCLUSION

61For the reasons stated above, the Board finds the current value of the property as of the January 1, 2016 valuation date is $1,473,000. Furthermore, the Board finds that the evidence does not lead to the conclusion that the current value, as determined above, is inequitable relative to the assessments of similar lands in the vicinity. Therefore, a further adjustment pursuant to s. 44.(3)(b) of the Act is not required.

62Accordingly, for the 2017 taxation year, the assessment is reduced from $1,602,000 to $1,473,000.