Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: January 29, 2018

FILE NO.: WR 149943

Assessed Person(s): Heather Gemmell-Brown

Appellant(s): Mark Brown, Heather Gemmell-Brown

Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 31

Respondent(s): Township of North Shore

Property Location(s): 1186 Highway 538

Municipality(ies): Township of North Shore

Roll Number(s): 5740-020-002-06424-0000

Appeal Number(s): 3254555

Taxation Year(s): 2017

Hearing Event No. 689880

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

Heard: December 6, 2017 by teleconference call

APPEARANCES:

Parties	Representative
Mark Brown and Heather Gemmell-Brown	Mark Brown
MPAC	Lana Hicks
Township of North Shore	No one appeared

DECISION OF THE BOARD DELIVERED BY TYRONE D. SKANES

ISSUE

1The appeal before the Assessment Review Board ("Board") was filed by Mark Brown and Heather Gemmell-Brown (the “Appellants”) in respect of the assessment of a single, detached family seasonal/recreational home on water, located at 1186 Highway 538, North Shore Township (“SP”) for the 2017 taxation year.

2The single-storey dwelling with 842 square foot ("sq ft") was built in 1974 with additions in 1980 and 1985 for an effective year built of 1980. A 304 sq ft sleep cabin was built in 1996. The lot size is 0.77 of an acre with a water frontage of 145 feet (“ft”) and a sandy beach. There is also a small shed on the property and it has a private well and a septic bed. The property has year round access.

3Lana Hicks, representing MPAC introduced the sales of three comparable properties that she opined were good comparators to the SP, despite their differences. She said that the current value assessment (“CVA”) of the SP at $174,000 was fair and reasonable and recommended that the Board confirm this assessment.

4The Appellant, representing himself and his wife, did not enter any comparable sales into evidence, although he did agree that MPAC’s Sale 2 was a good comparator. Instead, Mr. Brown focused his argument on equity and said that the equity analysis provided by the assessor did not make sense to him. He said that he believed that the assessment of the SP ought “to be around $100,000”.

5The issue before the Board for determination is whether the assessment of the SP for the 2017 taxation year is at current value and whether the assessment is equitable with the assessment of similar lands in the vicinity.

DECISION

6The Board is required by s. 44.(3)(a) and (b) of the Assessment Act (“Act”) to determine the current value of the land and have reference to the value at which similar lands in vicinity are assessed and adjust the assessment 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.

7The Board confirms the CVA of the SP as of January 1, 2016 at $174,000.

REASONS FOR DECISION

Relevant Legislation

8Section 19.(1) of the Act states:

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

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 19.2(1)3 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.

11Section 40.(17) of the Act states:

40.(17) Burden of proof. – 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.

12Section 40.(19) of the Act states:

40.(19) Board to make determination. – After hearing the evidence and the submissions of the parties, the Board shall determine the matter.

13Section 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.

MPAC's Position and Evidence

14Ms. Hicks` valuation report was entered into evidence as Exhibit 1. She testified that the direct sales comparison approach to value was used in determining the current value of the SP.

15Ms. Hicks entered the sales of three properties that she opines are good comparators to the SP, as all are waterfront seasonal properties. All are located within an eight kilometer radius of the SP, although two of them are in different homogenous neighbourhoods (“NGBH”). She said that sale one is the best comparable despite the differences. She believes that the SP is a more desirable property than the others as it has year round access and has a sandy beach whereas the others have either a gravel or rocky shoreline. The SP is also more desirable because it has a private well and septic bed, which the others do not.

16Ms. Hicks said that she did not time adjust the sales prices (“TAS”) of the comparable properties due to the limited number of sales.

17Ms. Hicks testified that she believed the CVA as returned was fair and reasonable and recommended that the Board confirm the assessment at $174,000.

18Ms. Hicks entered an equity analysis into evidence. She used the sales of 30 waterfront properties located within eight kilometers of the SP. She determined that the median assessment to sales ratio (“ASR”) was 0.979. She also determined that the equitable assessment of the SP is $170,346 but because this value fell within 5% of the CVA then no adjustment is required for equity.

Appellants’ Position and Evidence

19The Appellant entered a documentary package as Exhibit 3.

20The Appellant admitted that, while he was representing himself, he had no experience in land valuation. He did not enter any property sales into evidence but said that he believed that MPAC’s Sale 2, located next door to the SP, was a good comparator. He said that he was going to focus his argument on what he believed to be an inequity between the assessment of the SP and MPAC’s comparable properties. He said that he believed that the SP should be assessed at “around $100,000.”

21The Appellant placed great emphasis on the difference between assessments of the SP between the 2008, 2012 and 2016 valuation dates. He also pointed out the inequity between the assessment of the SP and the July 2013 sale for $125,000 of MPAC’s sale 2 that is located in close proximity to the SP, despite it being assessed at $184,000.

22In paragraph 3 of the Appellant’s Argument Against MPAC in Exhibit 3 he says that in reference to s. 44(3) (b) of the Act that if:

similar lands are found the lowest assessment should be used of those lands (if such an adjustment would result in the reduction of the assessment of the land) so that unbiased assessments values can be used for the property. If the sample data truly reflects the subject property, the named subject property should be assessed at $60K based on the study data.

23The Appellant completed his presentation by saying that based on the sale of MPAC’s Sale 2 the CVA of the SP should be $100,000 and that the equity analysis submitted by MPAC should not be used because the data was faulty.

Board's Deliberations - Current Value

24The best evidence of current value is the sale of the subject property if the sale meets the definition of current value on or near the valuation day. When no such sale occurs, as in this instance, the Board looks to the sale of similar properties in the vicinity to determine current value.

25The Board has carefully considered the testimony of the parties and the documentary evidence tendered as exhibits.

26The Board, when comparing properties, does not expect exactness or sameness. Therefore, the Board looks at similarity of characteristics, amenities and location to determine comparability.

27The Board usually considers the sales of comparable properties that have occurred within one year on either side of the valuation date as the ideal time period for consideration. The Board occasionally does extend the time period for considering comparable properties when the parties have demonstrated that there are an insufficient number of relevant sales during the ideal time period.

28MPAC submitted the sales of three properties for consideration. Sales 1 and 3 occurred within the time period that the Board considers ideal for comparison. Sale two took place a little over two years from the valuation date but, as it is in close proximity to the SP and there are a limited number of comparable properties, the Board will extend the time period and consider this property as well. They are reflected in Table 1 below.

29The Appellant did not submit any sales comparables for consideration.

30When asked what value he thought the SP ought to be assessed at the Appellant replied that it was worth “around $100,000” but could not articulate on what basis he was offering that opinion, other than referencing the sale price of MPAC’s sale two. He spoke at great length of how the data in the equity analysis entered into evidence by MPAC was faulty and should not be used but he could not clearly explain exactly what data was faulty. Nor did he offer any document, report or data that would support his argument that the SP was inequitably assessed.

31The Board rejects the Appellant’s argument regarding the SP’s value of “around $100,000” and accepts MPAC’s equity analysis.

32The Appellant also placed considerable emphasis on the increase of the assessments of the SP between the 2008, 2012 and 2016 valuation dates. Market conditions may change between valuation days, and while the Board acknowledges the Appellant’s dismay with the large assessment increases from the 2008 to 2012 to 2016 valuation days, there is nothing in the Act which requires there to be a correlation among assessments from one valuation period to another.

33MPAC's comparable properties are:

Table 1

Property	Water Frontage (Feet)	Year round access	Shore	Building Area Sq. Ft.	Lot Size (Acres)	Year Built	Cabin or Shed	Relatively Comparable Inferior or Superior
Subject Property	145	Yes	Sandy	842	0.77	1974	Cabin	N/A
Sales 1	250	No	Gravel	579	2.08	1971	Cabin	Relatively Comparable
Sale 2	680	Yes	Gravel	821	7.02	1960	No	Inferior
Sale 3	235	No	Rocky	623	2.1	1984	No	Inferior

34As shown in Table 1 above, the Board listed the main features of the sales comparables, in the Board’s opinion of order of importance. After considering the information in Table 1, the testimony of the witnesses and other evidence, the Board makes a finding as to whether the sales comparables are relatively comparable, inferior or superior to the SP.

35The assessor did not time adjust the sales prices of the comparable properties as she said there were too few sales. The Board disagrees with this rationale as it does not see a correlation between the number of sales and the ability to time adjust those sales but it has to deal with the evidence submitted. Therefore, the Board will utilize the sales prices of the comparable properties.

36In the Board’s determination Sales 2 and 3 are inferior to the SP and sale 1 is relatively comparable to the SP. Sale one’s year built is similar to the SP as is the fact that it has a sleep cabin, something neither of the other sales has.

Table 2

37The Board believes that the SP’s CVA ought to be higher than the highest sale price of the inferior properties and at or just below the lowest sale price of the relatively comparable property and Table 2 demonstrates that the returned value of $174,000 falls within that range.

38Therefore, the Board finds that the CVA of the SP to be $174,000.

Board's Deliberations - Equity

39MPAC entered an equity analysis into evidence that was disputed by the Appellant as he said that the data in the analysis was faulty. However, the Appellant did not highlight how the data was faulty and how it would affect the conclusions reached by Ms. Hicks. Therefore, the Board accepts the equity analysis where the median ASR was determined to be 0.979.

40Ms. Hicks said that she performed an equitable assessment based on the median ASR and the value returned at $170,346. She said that because the difference between the returned CVA and the equitable assessment was in an acceptable range of less than 5% then no adjustment was required for equity. The Board accepts this argument and finds that no adjustment for equity is required.

CONCLUSION

41The Board confirms the CVA of the SP at $174,000 for the 2017 taxation year.