Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: April 23, 2018

FILE NO.: WR 151847A

AMENDED DECISION ISSUED ON: May 24, 2018

Assessed Person(s): Bernarda Krasowski

Appellant(s): Bernarda Krasowski, Krzysztof Krasowski

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

Respondent(s): City of Toronto

Property Location(s): 14 Cedarcrest Drive

Municipality(ies): City of Toronto

Roll Number(s): 1919-022-020-01500-0000

Appeal Number(s): 3224084 and 3300046 (deemed 2018 appeal)

Taxation Year(s): 2017 and 2018 (deemed appeal)

Hearing Event No.: 694870

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

Heard: March 21, 2018 in Toronto, Ontario

APPEARANCES:

Parties	Representative
Bernarda Krasowski	Self-represented
MPAC	Jessie Yu and Maria Cheung
City of Toronto	No one appeared

DECISION OF THE BOARD DELIVERED BY JENNIFER GRIFFITH AND DAN WEAGANT

Amended pursuant to Rule 114 of the Assessment Review Board’s Rules of Practice and Procedure, effective April 1, 2017

INTRODUCTION

1This appeal before the Assessment Review Board (“Board”) is filed by the assessed person, in respect to the returned assessment of $945,000 for the 2017 taxation year for the subject property at 14 Cedarcrest Drive, in the City of Toronto.

2Jessie Yu, representative for MPAC is of the view that the returned assessment of $945,000 for the subject property is fair and equitable, based on the sales of similar lands in the vicinity.

3Bernarda Krasowski (“appellant”) is of the view that the subject property is assessed too high because MPAC failed to recognize the negative impact of heavily used train tracks by commuter and GO train traffic on the assessed value of the subject property. Based on this concern and as compared to a sale at 22 Cedarcrest Drive, on the same street and close to the subject property, Ms. Krasowski is of the view that a fair and equitable assessment value should be $840,000 for the 2017 taxation year.

4No one appeared for the City of Toronto.

ISSUE

5The Board has to decide:

• Whether the returned assessment of $945,000 for the 2017 taxation year for the subject property is at current value as at the valuation date January 1, 2016; and
• Whether the value is equitable with the assessments of similar lands in the vicinity.

DECISION

6The Board determines the current value to be $965,000 and finds this value to be fair and equitable. MPAC did not seek an increase in the assessment value; therefore the Board confirms the returned assessment value of $945,000 for the 2017 taxation year.

REASONS FOR DECISION

Background

7The subject property is described as a single-family detached (not on water) located at 14 Cedarcrest Drive, in the City of Toronto. The subject property was built in 1952, with a site area of 0.13 acres, and a total building area of 1307 square feet (“sq. ft.”).

The Legislation

8In determining the value at which land shall be assessed, the Board must have regard to the following provisions 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 19.2(1)2 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.

12Section 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.

13Section 40.(19) of the Act states:

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

14In determining the value at which any land shall be assessed, s. 44.(3)(a) and (b) of the Act requires the Board to do two things:

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.

Does the Returned Value Reflect the Subject Property’s Current Value?

MPAC’s Evidence and Position

15In support of her argument, MPAC’s representative presented two sales located in the same neighbourhood (A66-221) as the subject property at 8 Cedarcrest Drive, sold April 24, 2015 for $910,000 and at 58 Old Oak Road, sold August 16, 2016 for $1,107,000.

16The representative presented an analysis of these two sales to demonstrate how similar these two comparable properties are to the subject property in terms of age, building size, lot size, and quality. Included in the analysis are the actual sale prices and the time adjusted sale prices to show what these two comparable properties would likely have sold for at the valuation date January 1, 2017. She also presented the time adjusted factors she relied on to adjust the actual sale prices of the comparable properties, and the 241 sales she relied on to determine the time adjusted factors.

17The representative also presented the Calculation of Opinion of Value for the two sales presented to show that these comparable properties sold at an average time-adjusted sale price of $889.14 per sq. ft. based on total building area. Applying the average sale price to the subject property results in a value of $1,162,105 rounded ($889.14 x 1307 sq. ft.), which is higher than the returned assessment of $945,000 for the subject property.

Appellant’s Evidence and Position

18In presenting her case, the appellant has testified that according to MPAC’s website, when assessing residential properties 200 different factors are considered and that location, lot dimensions, living areas, age (adjusted for renovations and additions) and quality account for 85 percent of the assessed value.

19Taking into consideration the above statement, the appellant has testified that the subject property is located close to a heavily used train track with constant cargo and commuter GO train traffic. She argues that the time adjusted sale price of properties located on streets running along train tracks were on average 12.6 percent lower than their assessed values; whereas, properties located on streets a short distance away were on average 14 percent higher than their respective assessed values. The appellant has argued that MPAC’s analysis, based on the sale price of properties within 0.5 kilometers of the subject property to determine current value is inaccurate.

20In support of current value, the appellant presented the sales of three similar comparable properties on the same street as the subject property, and located a short distance from the train tracks. These comparable properties are located at:

• 22 Cedarcrest Drive, sold January 2016 for $840,000, with 1568 sq. ft., of total building area;
• 3 Cedarcrest Drive, sold April 2016, at a time adjusted sale price of $895,000, with 1266 sq. ft. of total building area; and
• 8 Cedarcrest Drive sold April 2015, at a time adjusted sale price of $1,031,686, with 1061 sq. ft. of total building area.

These three comparable properties have an average total building area of 1298 sq. ft. and sold at an average time adjusted sale price of $738.34 per sq. ft. Applying the average sale price to the subject property results in a value of $965,000 rounded ($738.34 x 1307 sq. ft.), which is higher than the returned assessment of $945,000 for the subject property.

21The appellant testified that the comparable properties at 3 Cedarcrest Drive and 8 Cedarcrest Drive have been fully renovated. However, on cross-examination, the appellant could not confirm the dates of the renovation and what exactly was done. As no other evidence was brought forward to corroborate her argument, the Board places no weight on the argument of renovation, because the appellant presented no quantifiable evidence like the date of the renovation, the scope and nature of the work done to demonstrate the impact on the assessed value.

22On cross-examination and in response to nuisances associated with the train track, MPAC’s representative explained that neither the subject property, nor the above three comparable properties receive an adjustment because they are not abutting or sufficiently proximate to the train tracks to warrant an adjustment.

Board’s Analysis

23In reviewing all the above evidence, the Board finds that the appellant presented the best evidence in support of current value, with the sales of three similar comparable properties located on the same street and exposed to the same nuisances as the subject property. The analysis of these three sales (one of which was presented by MPAC) shows that they were sold at an average adjusted sale price of $738.34 per sq. ft. based on total building area. When this rate is applied to the subject property it results in a current value of $965,000 ($738.34 x 1307 sq. ft.).

24The Board disagrees with the appellant’s argument that the current value should be based on a single sale at 22 Cedarcrest Drive, which sold for $840,000. The reason is that there are many influences that impact the sale price of a property negatively and/or positively. Therefore, the Board relied on all valid sales presented into evidence that can provide a more accurate determination.

25In regard to the issue of nuisances associated with the train tracks, the Board accepts MPAC’s explanation, that the subject property as well as the above three comparable properties receive no adjustment, because they are not abutting or within proximity to the train tracks to warrant an adjustment of the assessed value. The Board did not rely on the appellant’s evidence, because the appellant failed to present quantifiable evidence to show the impact of nuisances on the assessed value of the subject property.

Amended pursuant to Rule 114 of the Assessment Review Board’s Rules of Practice and Procedure, effective April 1, 2017

26Based on all the above evidence the Board determines the current value to be $965,000.

Is the Current Value determined Equitable when reference is made to the assessments of similar properties in the vicinity?

27MPAC’s representative presented the following evidence:

• That an equity analysis measures the overall or typical ratio at which a group of properties is assess by determining the median Assessment to Sales Ratio (“ASR”);
• That the median is a measure of central tendency and is the mid-point of the ratios; and that the median ASR is the preferred measure to determine the Level of Appraisal (“LOA”) because it is not affected by very low or high ratios;
• That appraisal uniformity among the properties is measured by determining the average percentage deviation from the median ASR (commonly known as Coefficient of Dispersions (“COD”);
• That the International Association of Assessing Officers (“IAAO”) standards state that the LOA for all property types should fall between 0.90 – 1.10. MPAC takes a more onerous position, that equity is achieved if the median ASR falls between 0.95 – 1.05.
• That the IAAO standards require CODs of not more than 15 percent for residential properties, not more than 20 percent for income producing properties, not more than 25 percent for vacant land and not more than 20 percent for rural and recreational waterfront.

28In support of equity, the representative presented an Equity Analysis, based on thirty sales of similar properties which occurred in 2015 and 2016. The analysis shows that these thirty time- adjusted sales have a median ASR (LOA) of .964 percent and a COD of 8 percent.

29The appellant presented nine sales of comparable properties located close to train tracks). An analysis of these nine sales shows a median ASR of 1.08, suggesting that their assessments are higher than their current value. These same sales are also included in MPAC’s equity analysis above.

30Based on all the above evidence, the Board finds that MPAC presented the best evidence in support of equity, with the median ASR of 0.964 and COD of 8 percent, which falls within the acceptable standards of the IAAO and MPAC. The Board is of the view that statistics based on thirty sales are likely to be more accurate than statistics based on nine sales. Therefore, the Board finds that the evidence does not support an equity adjustment to the current value of $965,000 as determined above.

CONCLUSION

31Based on all the evidence, the Board determines the current value to be $965,000 and finds this value to be fair and equitable. MPAC did not seek an increase in the assessment value; therefore, the Board confirms the returned assessment value at $945,000 for the taxation year 2017.

2018 DEEMED APPEAL

32An appeal for the 2017 taxation year is presently before the Board. Section 40.(26) of the Assessment Act provides that the appellant is deemed to have made the same appeal for the subsequent taxation year if the appeal is not finally disposed of before March 31 of the subsequent taxation year. The Board has not disposed of the 2017 appeal before March 31, 2018. For that reason, this decision also applies to the 2018 taxation year.

Amended pursuant to Rule 114 of the Assessment Review Board’s Rules of Practice and Procedure, effective April 1, 2017

33Section 40.(26) of the Act directs:

Deemed appeals, 2009 and subsequent years

(26) For 2009 and subsequent taxation years, an appellant shall be deemed to have brought the same appeal in respect of a property,

(a) in relation to the assessments under sections 32, 33 and 34 for the year; and

(b) in relation to the assessment, including assessments under sections 32, 33 and 34, for a subsequent taxation year to which the same general reassessment applies, if the appeal is not finally disposed of before March 31 of the subsequent taxation year or, if an assessment has been made under section 32, 33 or 34, before the 90th day after the notice of assessment was mailed.