Bradley Thomas Romanek v. Municipal Property Assessment Corporation, 2018 CanLII 32166

Assessment Review Board / Commission de révision de l’évaluation foncière

ISSUE DATE: April 11, 2018 FILE NO.: WR 150042

Assessed Person(s): Bradley Thomas Romanek Appellant(s): Bradley Thomas Romanek Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 15 Respondent(s): City of Brampton

Property Location(s): 181 Folkstone Crescent Municipality(ies): City of Brampton Roll Number(s): 2110-100-037-18800-0000 Appeal Number(s): 3230439 Taxation Year(s): 2017 Hearing Event No.: 689779

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

Heard: November 27, 2017 in Brampton, Ontario

APPEARANCES:

Parties	Representative
Bradley Thomas Romanek	Self-represented
MPAC	Olivia Medeiros, Usha Prasad
City of Brampton	Aida Karreman

DECISION OF THE BOARD DELIVERED BY SUBUOLA AWOLERI

INTRODUCTION

1The subject property is a single-family one storey detached dwelling built in 1969, with construction quality of 6.0. It has a lot with 56.59 feet of effective frontage, 146.51 feet of effective depth, an effective site area of 0.19 acres and total building area of 1,064 square feet (“sq. ft.”). The first floor is 1,064 sq. ft., the basement area is 534 sq. ft. of which 400 sq. ft. is finished, making the split level a back split.

2For the 2017 taxation year, the current value assessment (“CVA”) was returned at $420,000. Olivia Medeiros, the assessor from MPAC, initially provided the Assessment Review Board (“Board”) with an opinion of value for the subject property at $461,000, which she later changed during the hearing to $472,000 based on the six comparable property sales within the vicinity of the subject property. Usha Prasad, MPAC’s advocate advised the Board that MPAC is not seeking an increase in assessment since it did not serve the Appellant with a notice of increase in value in accordance to Rule 40(b) of the Board’s Rules of Practice and Procedure (“Rules”) and requested that the Board confirm the $420,000 assessment as returned.

3Bradley Romanek, the Appellant submits that the assessment is too high. He provided the Board with various approaches which he used to determine what he believes to be the correct CVA for the subject property, and concluded that the correct CVA of the subject property should not be more than $403,000.

ISSUES

4The 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 in reference to the assessments of similar lands in the vicinity?

DECISION

5The Board finds the current value of the subject property for the 2017 taxation year to be $461,000 (rounded). MPAC did not file a notice of intention to seek a higher assessment. The Board confirms the assessment below the current value determined at $420,000 for the 2017 taxation year and finds this value to be fair and equitable.

REASONS FOR DECISION

Current Value – Evidence and Analysis

6In accordance with s. 44(3)(a) the first mandate of the Board is to determine “the current value of the land.” Section 1 of the Assessment Act (“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 the Act.

7Section 19.2(1) of the Act prescribes the valuation days, which provides:

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.

8Section 40.(17) of the Act places “the burden of proof as to the correctness of current value on MPAC.”

MPAC’s Position

9Ms. Medeiros presented the Board with six comparable property sales in proximity to the subject property. She testified that all six properties are considered similar to the subject property. The Time Adjusted Sale (“TAS”) prices for the six properties range from $452,708 to $545,591 with sale dates from June 2015 to March 2016. The total building area of the six properties range from 1,058 to 1,157 sq. ft., with three of these properties having the same year built as the subject property and the remaining three built in 1968. All six properties are one storey buildings with construction quality of 6.0, same as the subject property. The six properties all have lot areas smaller than the subject property between 0.14 to 0.16 acres. All six properties have basement areas that are finished like the subject property and only two of the sales have the same split levels as the subject property.

10Ms. Mederios testified that all the six sales are within six months prior and after the valuation date of January 1, 2016, and based on these six sales the current value range for the subject property is estimated to be $461,000. She further provided the Board with the median per sq. ft. for all the six comparable sales as $443.73 and applied this to the total building area of the subject property of 1,064 sq. ft., providing a current value of $472,000 (rounded).

11Ms. Prasad submits that MPAC did not make an adjustment for the subject property’s larger lot size, if it did, the CVA would be much higher.

12Ms. Mederios concluded her evidence on current value by stating that the correct current value of the subject property should be $472,000, however, MPAC is requesting that the Board confirms the CVA as returned.

Appellant’s Position

13Mr. Romanek commenced his evidence by advising the Board that this is the third time he is appearing before the Board and he believes he is being penalized by MPAC as a result of MPAC’s constant increase in the assessment of the subject property. He testified that he had submitted a 70 paged Request for Reconsideration (“RFR”) to MPAC and MPAC responded with only one page with no reason why his comparable sales were disregarded.

14Mr. Romanek presented this 70 paged RFR as Exhibit 2, in which he used to refer the Board to three approaches he used to determine what he believes is the correct CVA of the subject property.

First Approach

15In Appendix 4, he provided a chart of 11 best sales comparable properties which were used by MPAC at the prior two appeals before the Board. He calculated the median increase of the 11 comparable properties as 25.723% between the 2012 and 2016 valuation years. When he compared this to the subject property’s valuation as of January 1, 2016, he asserts that MPAC has increased the subject property from $325,000 to $420,000 or 29.231%. He argues that the value of the subject property should not have increased more than these comparables. Consequently, he testified that the subject property’s CVA should be no more than $408,629, which is 25.732% higher than the 2012 valuation of $325,000.

Second Approach

16In Appendix 5, he presents MPAC’s residential market trend from MPAC’s website, which he states provides that the average phased-in assessment increase in the subject property’s area is 6% per year or 24% over four years. He asserts that the subject property has increased by 29.231% or 7.3% per year and there is no reason why the subject property should increase more than other properties in the same vicinity. Accordingly, the subject property should have a value of $403,000, which is 24% more than the 2012 valuation.

Third Approach

17In Appendix 7, Mr. Romanek, provided 29 comparable one storey properties, which he asserts are similar to the subject property and in the same vicinity as the subject property. He provided the average value per sq. ft. of the 29 properties as $379, while the sq. ft. of the subject property based on the returned assessment is $395. He further testified that most of the properties have finished basements larger than the subject property, with garages, which the subject property does not have and their valuation per sq. ft. is smaller than the subject property. The Appellant submits that he relies on these 29 comparable sales, by applying the average value per sq. ft. of $379 to the total building area of the subject property to arrive at the correct current value of the subject property as $403,000 (rounded).

Board’s Analysis

18The 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.

19Regarding the Appellant’s evidence, the Board can only make a determination on current value based on sales evidence within the shoulder years of the valuation date, which is 12 months on either side of the valuation date. This will reflect the market of what the subject property will sell for as of the valuation date. Sequel to this, the Board will disregard the Appellant’s evidence regarding his first and second approach to finding the current value for the following reasons: MPAC’s evidence in two prior assessment appeal, does not relate to this appeal as this tax year deals with a new cycle and a different valuation date. Furthermore, the Board does not determine current value based on MPAC’s residential market trend percentage, but rather based on the definition of current value as defined in the Act.

20All the sales presented by MPAC are within the shoulder years of the January 1, 2016 valuation date. In fact, MPAC provided sales six months prior and after the valuation date. The Appellant presented sales of 29 properties with sale dates from June 2011 to December 2015. The Appellant incorrectly used the assessment of these properties against the building sq. ft. to arrive at the amount per sq. ft. to determine the average sq. ft. of $379. During the hearing, the Appellant testified that he believed the figures as presented on MPAC’s website were time adjusted. The sale amount for these 29 properties were not time adjusted to the valuation date of January 1, 2016. The lot sizes of some of these sales range from 5,653 sq. ft. to 7,711 sq. ft. compared to the subject property’s lot size of 8,291 sq. ft.

21In determining the CVA for the subject property, the Board reviewed and used the six comparable property sales presented by MPAC as well as the comparable sales presented by the Appellant that are within the shoulder years of the valuation date. Seven of the Appellant’s 29 comparable properties sales are within the shoulder years between January 2015 to December 2015, which are: 27 Finsbury Drive, 165 Folkstone Crescent, 24 Evesham Crescent, 107 Folkstone Crescent, 7 Fernbank Road, 28 Finsbury Drive and 43 Flavian Crescent. MPAC directed the Board to the sale details of 107 Folkstone Crescent and 43 Flavian Crescent, in Exhibit 2 of the Appellant’s evidence, which revealed that these two sales cannot be considered as they are non-arm’s length sale transactions, which sold for $9,900 and $9,200 respectively. Three of the sales were also used by MPAC. One of the Appellant’s comparable sale which sold January 2015 is not time adjusted to the valuation date of January 1, 2016. Consequently, the Board was only able to time adjust only one of the Appellant’s sale which occurred in July 2015 in addition to MPAC’s six sales in its determination of the current value of the subject property. Details of these seven sales can be seen in Table 1 below:

Table 1

Address	Assessment ($)	Sale Date / Sale Amt. ($)	Time / Adjusted Sale ($)	Building/Size (sq. ft.)	Lot Size (acres)	Year Built	Sale per sq. ft. TAS (amt.)	Sale per sq. ft. sale (amt.)
Subject Property 181 Folkstone Crescent	420,000	N/A	N/A	1,064	0.19 (A) 8291(F)	1969	N/A	N/A
Sale A 17 Fidelia Crescent	427,000	August 2015 (463,000)	499,313	1,064	0.14	1969	469.27	435.15
Sale B 4 Esplanade Road	434,000	March 2016 (471,000)	452,708	1,058	0.14	1968	427.89	445.17
Sale C 33 Edgebrook Crescent	418,000	January 2016 (550,000)	545,591	1,122	0.14	1968	486.26	490.19
Sale D 7 Fernbank Road.	438,000	November 2015 (445,000)	456,055	1,120	0.16	1969	407.19	397.32
Sale E 27 Finsbury Drive	439,000	October 2015 (455,000)	474,157	1,157	0.14	1969	409.81	393.25
Sale F 24 Evesham Crescent	440,000	June 2015 (473,000)	528,521	1,150	0.15	1968	459.58	411.30
Sale G (Appellant) 28 Finsbury Drive	425,000	July 2015 (428,000)	469,944	1,083	0.14 6050(F)	1969	433.92	395.19

22The Board reviewed the characteristics of each of the comparables and determines that these seven sales are similar to the subject property, in terms of construction quality (all 6.0), year built, building structure, building size and location. The only difference is that the subject property has a larger lot.

23The median adjusted sale value per sq. ft. for the seven comparable sale is $433.92, applying this to the subject property building size provides a current value of $461,000 (rounded). The Appellant testified that at the last assessment appeal before the Board, he raised concerns regarding MPAC’s time adjustment methodology, which the Board agreed were valid concerns. In this appeal, the Appellant did not present evidence in this regard. However, using the unadjusted sale prices of the eight sales (including 165 Folkstone Crescent, from the Appellant, which sold in January 2015 at $393,800 with a sale per sq. ft. at $351.60), the median sale per sq. ft. is $404.31. Applying this to the building size of the subject property the current value of the subject property will be $430,000 (rounded), which is still higher than the returned CVA.

24The Board determines that the correct current value of the subject is $461,000 (rounded). MPAC did not file a notice of intention to seek a higher assessment, as required by Rule 40(b) of the Board’s Rules. As a result, the Board confirms the assessment below the current value determined at $420,000 for the 2017 taxation year.

Equity Analysis

25Section 44.(3)(b) mandates and 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 Sales Ratio (“ASR”) is a tool often used to determine if a reduction in the assessment below current value is required to make an assessment equitable with the assessments of similar lands in the vicinity. The ASR is determined by dividing the assessment as returned by the TAS price.

27Ms. Medeiros presented an equity analysis of 27 residential sales with sales that occurred from June 30, 2015 to June 30, 2016, all within same residential neighborhood as the subject property, with a median ASR of 0.953. She submits that MPAC standards indicate that for residential property, the median ASR should fall between 0.95 and 1.05, which is in line with the International Association of Assessing Officers standards, which state that the median ratio should fall between 0.90 and 1.10. If the median ratio falls within this range, this reveals that the current value assessments are reflective of sales prices in the vicinity. Ms. Medeiros further submits that similar properties in the vicinity have been assessed accurately and uniformly, consequently there is no need for an equity adjustment.

28The Appellant’s equity argument is based on the assessment of three identical properties in the same vicinity as the subject property. The only difference being that one has an attached garage which the subject property does not have, this is assessed at $417,000 and the remaining two are both assessed at $405,000. The Board notes that in Appendix 6 of Exhibit 2, which shows the property details of these three properties, the subject property has the largest lot size while the three properties have lot sizes which range from 6.046 sq. ft. – 6,366.1 sq. ft. There were also no valid sales on these properties between January 1, 2012 – December 31, 2015, which the Board could use to determine if these three properties were assessed at their current value.

29For establishing equity, properties need not be as similar as they need to for valuation purposes; however, they need to be of the same general nature, character or function. It will be difficult for the Board to establish equity based on the assessment of three properties alone, as the purpose of s. 44.(3)(b) of the Act is to ensure that the municipal tax burden is shared fairly and equally among similarly situated taxpayers. The Board cannot determine this based on just three properties.

30The best evidence on equity is presented by MPAC and based on this the evidence does not lead the Board to the conclusion that the assessment of the property should be reduced below its current value to make it equitable with the assessments of similar lands in the vicinity.

CONCLUSION

31Based on all of the evidence, the Board determines the current value to be $461,000 (rounded), however, MPAC did not file a notice of intention to seek a higher assessment, as required by Rule 40(b) of the Board’s Rules. Consequently, the Board confirms the assessment below the current value determined at $420,000 for the 2017 taxation year and finds this value to be fair and equitable.