Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: April 13, 2018 FILE NO.: WR 150643

Assessed Person(s): Norman Camerman, Cynthia Mock Appellant(s): Norman Camerman, Cynthia Mock Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 09 Respondent(s): City of Toronto

Property Location(s): 77 Otter Crescent Municipality(ies): City of Toronto Roll Number(s): 1908-061-240-02000-0000 Appeal Number(s): 3256794 Taxation Year(s): 2017 Hearing Event No.: 694465

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

Heard: January 25, 2018 in Toronto, Ontario

APPEARANCES:

Parties	Representative
Norman Camerman	Self-represented
MPAC	No one appeared
City of Toronto	No one appeared

MEMORANDUM OF ORAL DECISION OF THE BOARD DELIVERED BY DAN WEAGANT

INTRODUCTION

1On the day of the hearing, no one appeared for either the City of Toronto or MPAC. The Board heard submissions from the Appellant, Dr. Norman Camerman as to his opinion of the value of the subject property, 77 Otter Crescent. Dr. Camerman also made references to the submissions made by MPAC in its disclosure, which was filed in accordance with the Board’s Rules of Practice and Procedure (“Rules”). MPAC’s submissions included a valuation report and an equity analysis.

2Also in accordance with the Rules, the Assessment Review Board (“Board”) delayed the start of the hearing for thirty minutes to give MPAC the grace they are entitled to. By 10 a. m, MPAC had still not arrived and the Board proceeded in their absence. There was no reason given at the hearing for this non-attendance. Dr. Camerman indicated that he fully expected MPAC to appear.

3The subject property is a single family dwelling in an area of Toronto that is being re-developed. Properties in the vicinity are being purchased for the purpose of demolishing existing dwellings and replacing them with new, larger dwellings. The property has a returned current value assessment (“CVA”) for the 2017 taxation year of $1,590,000. Dr. Camerman believed this value is too high and that $1,300,000 is more reasonable. That is the reason for his appeal.

4The Board must decide two things in this appeal. Firstly, the current value of the subject property must be determined for the 2017 taxation year, based on the evidence at the hearing. Having reference to the assessments of similar properties in the vicinity, the Board must also determine if the current value found needs to be reduced, for the purpose of equitable assessment.

5The Board rendered its decision orally at the conclusion of the hearing. Upon receipt of the decision from the Board, MPAC requested written reasons for the decision. Those reasons follow.

DECISION

6The Board finds that the current value of the subject property for the 2017 taxation year is $1,560,000. The Board also finds that there is evidence to support a reduction of this value to achieve equitable assessment. Accordingly, the current value is reduced to $1,440,000 to make the subject property’s assessment equitable with the assessments of similar properties in the vicinity.

7The assessment of the property at 77 Otter Crescent, for the 2017 taxation year is reduced from $1,590,000 to $1,440,000 in the Residential property class.

LEGISLATION

8In making its determination of these appeals, the Board must consider the relevant sections of the Assessment Act (“Act”).

9Section 1 of the Act states:

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.

10Section 19.(1) of the Act states:

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

11Section 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.

12Section 45 of the Act states:

45 Upon an appeal with respect to an assessment, the Assessment Review Board may review the assessment and, for the purpose of the review, has all the powers and functions of the assessment corporation in making an assessment, determination or decision under this Act, and any assessment, determination or decision made on review by the Assessment Review Board shall be deemed to be an assessment, determination or decision of the assessment corporation and has the same force and effect.

What is the Current Value of the Subject Property?

MPAC’S Evidence and Position – As set out in MPAC’s filed Valuation Report

13MPAC’s valuation report compares the subject property with six properties in the immediate area; five on Otter Crescent and one on Kimbark Boulevard, that sold between July 2015 and December 2016. The sale prices of these six properties range from $1,395,000 to $1,889,000.

14According to MPAC’s valuation report, Time Adjustment Factors (“TAF”) were applied to adjust the sale value of each of the comparable properties to show their likely sale value as if they were sold on January 1, 2016, the statutory valuation day stipulated in the Act for the 2017 taxation year.

15The resulting time adjusted sale (“TAS”) prices of the six properties in MPAC’s comparison range from $1,449,759 to $1,754,162. MPAC’s opinion of value of the subject property, drawn from the analysis of the six comparable sales was $1,700,000. There was no evidence to suggest that MPAC was seeking a value higher than what was returned.

Appellant’s Evidence and Position

16Dr. Camerman disagreed with MPAC’s opinion of value, but did not advance an argument specifically related to current value as defined in the Act. His evidence related to the fairness of the assessment when compared to the assessment of similar properties in the vicinity.

Board’s Analysis

17MPAC’s case suffers from the non-attendance of their assessor. There is no direct link provided in the disclosed valuation report between the six comparable sales cited and the resulting opinion of current value. The only reference to such an opinion appeared in the equity analysis where the $1,700,000 was used as a starting point for the application of an equity adjustment.

18Without the assessor present, the Board was forced to take a critical look at the contents of the current value valuation report and make its own determination from its contents.

19When reviewing the comparable properties used by MPAC, the Board finds that there is no direct link between the various time adjusted sale values and the data presented for each property. For instance, larger lots sold for less than smaller lots and smaller dwellings sold for more than larger dwellings. It appears that this neighbourhood is ‘in transition’, which describes the situation whereby re-development pressure comes to bear on sale prices. Dr. Camerman testified that at least two of the six comparables used by MPAC were torn down after the 2017 assessment was returned. The Board finds that the value of properties in this neighborhood is found in their lot areas.

20Given the sale data available, the Board finds that the best evidence of the value of the subject property is the median TAS value of the six properties in evidence, as there is no evidence to suggest dwelling sizes have any impact on sale values in MPAC’s valuation report. The Board finds the current value of the subject property is $1,560,000, rounded.

Is a reduction in the current value necessary to achieve equitable assessment when reference is made to the assessments of similar properties in the vicinity?

Appellant’s Evidence and Position

21Dr. Camerman was especially concerned about the fairness of his assessment when it was compared to the assessments of similar properties in the vicinity. To this end, he testified that:

• His assessment is too high when compared to the property at 79 Otter Crescent;
• Of those of his neighbours who filed a Request for Reconsideration, 47% received a reduction;
• MPAC models of determining value do not work in this case;
• Adjustments made to the subject property’s assessment by MPAC in previous assessment cycles have either been ignored for the 2016 CVA or are not properly articulated in MPAC’s evidence;
• The 2012 CVA was $1,140,000 and the increase to $1,590,000 for the 2016 CVA represents an increase of 39% and is not reasonable when compared to the increase at 79 Otter Crescent, which was 8%.

22Dr. Camerman submitted that his property is inferior to his immediate neighbour to the north, 79 Otter Crescent. He testified that 79 Otter had a 2016 CVA of $1,616,000. He submitted that 79 Otter is superior to his property, the house has much more curb appeal and that it does not suffer from the same building layout issues as the subject property. Dr. Camerman explained that unlike all of the properties in his neighbourhood, his house stands only 18 feet wide at its frontage onto Otter Crescent and this makes his property unique.

23Dr. Camerman also pointed out that it was unfair for his neighbor at 79 Otter Crescent to have a 2012 CVA to 2016 CVA increase of only 8%, when his increase over the same time period was 39%.

MPAC’s Evidence and Position – As set out in MPAC’s filed Equity Analysis Report

24MPAC’s equity analysis report provides a clear approach to the issue of equity of assessment on the subject property. Thirty similar properties in the vicinity that sold in proximity to the valuation day had their 2016 CVAs compared to their 2016 TAS values. The comparison of these assessments to sale values is called the Assessment to Sale Ratio (“ASR”).

25The ASRs in MPAC’s equity analysis range from 0.64 to 1.168. with a median ASR of 0.923. This means that generally speaking, properties that are similar to the subject property, in the vicinity are assessed at approximately 92.3% of their current value. MPACs equity analysis states that a median ASR that is anywhere between 0.95 and 1.05 suggests that properties are generally assessed at their current value, and that there is no requirement to reduce the current value determined to make the assessment equitable.

26In this case the median ASR is below the ‘no-adjustment’ range suggested by MPAC. In the analysis, MPAC suggests their opinion of current value of $1.7 million could be reduced by the median ASR determined by their equity analysis, to arrive at a reduced value of $1,569,000.

Board’s Analysis

27The concept of reducing the current value determined to make the subject property’s assessment equitable with that of similar properties in the vicinity requires the Board to change a correct finding of current value to one that is incorrect to make it fair and equitable. Adjustments for this purpose cannot therefore be made without compelling evidence to do so.

28Dr. Camerman’s case focused on a direct comparison with his next door neighbor. In doing so he pointed out that his property should be assessed lower because his property is inferior. However, he was not able to make any specific submissions as to what that difference in value should be except to suggest $1,300,000 was appropriate. He also made the erroneous comparison of 2012 to 2016 CVA changes between the two properties. Such comparisons are not helpful in determining equitable assessment because the characteristics of the two properties being compared are not in evidence. In addition, without knowing how the 2012 CVA was arrived at, percentage increases compared between two properties are equally unreliable indicators of specific, equitable assessment.

29In contrast, MPAC’s equity analysis takes a broad statistical approach to comparing the sale values (current values) of thirty area residential properties and compares them to their respective 2016 CVAs. This provides a direct, median comparison to determine if these types of properties are being assessed equitably. In this case, the analysis shows that assessments are generally below current values.

30The Board finds that the best indicator of equitable assessment is that of MPAC. Accordingly, the median ASR in MPACs equity analysis, of .923 is applied to the current value determined above to arrive at a reduced value, for the purposes of equitable assessment, of $1,440,000.

CONCLUSION

31The Board finds that the current value of the subject property for the 2017 taxation year is $1,560,000. The Board also finds that there is evidence to require a reduction of this value to achieve a fair assessment. Accordingly, the current value is reduced to $1,440,000 to make the subject property’s assessment equitable with the assessments of similar properties in the vicinity.

32Accordingly, the assessment of 77 Otter Crescent is reduced for the 2017 taxation year from $1,590,000 to $1,440,000, in the Residential property class.