Irfan Aziz v. Municipal Property Assessment Corporation, 2018 CanLII 50596

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: May 28, 2018

FILE NO.: WR 151792

Assessed Person(s): Irfan Aziz, Rozina Irfan Aziz

Appellant(s): Irfan Aziz, Rozina Aziz

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

Respondent(s): City of Toronto

Property Location(s): 205 Wynford Drive, Suite 202

Municipality(ies): City of Toronto

Roll Number(s): 1908-101-020-00358-0000

Appeal Number(s): 3259710 and 3299156 (deemed 2018 appeal)

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

Hearing Event No. 693865

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

Heard: March 07, 2018, by telephone conference call

APPEARANCES:

Parties

Representative

Irfan Aziz

Self-represented

MPAC

Dean Kolovos

City of Toronto

No one appeared

DECISION OF THE BOARD DELIVERED BY LESLIE FLEMMING

REASONS

Background

1Irfan Aziz (“Appellant”) appears before the Board in an appeal of the assessed value of Unit 202, 205 Wynford Drive in Toronto, (the “Subject Property”), which is a condominium unit in Metro Toronto Condo Plan 897, Level 2, Unit 2, Level C, Unit 15. A second Appellant, Rozina Aziz, did not attend the hearing.

2Pursuant to the provisions of the Assessment Act (the “Act “), municipal property taxes are assessed on an annual basis, and the calculation of the tax payable is based on property value. The Act requires that the MPAC conduct a general reassessment of a property’s value every four years. For the 2017 to 2020 assessment cycle, the Act specifies that the valuation date for this general reassessment is January 1, 2016. The Act further provides that the annual assessment for each of the four taxation years will be based on the value determined by MPAC in its general reassessment, unless there has been a subsequent change in circumstances.

3MPAC’s general reassessment of the value of the Subject Property as of January 1, 2016, is $367,000 in the residential property class.

4Mr. Aziz and Ms. Aziz (the “Appellants”) have filed appeals for taxation year 2017 with the Assessment Review Board (the “Board”), pursuant to s. 40 of the Act. The Appellants do not assert that there has been a change in circumstances since MPAC’s general reassessment. Consequently, the Appellants challenge the 2016 assessment which applies to the 2017 taxation year. It is Mr. Aziz’ position that the 2016 assessment is too high and that the correct current value of his property on January 1, 2016 is $308,000. In support of this position, he emphasizes that the Subject Property is on the second floor of the building, and he maintains that the value of a condominium unit in a medium or high-rise building is tied to its elevation: the higher the unit, the higher its current value should be. At this hearing, MPAC takes the position that the 2016 correct current value is $367,000.

5The Appellants have filed appeals to the Assessment Review Board pertaining to taxation years 2017 to the Board, pursuant to s. 40 of the Act. MPAC, the corporate assessor, is represented by Dean Kolovos, a Property Valuation Analyst who prepared the assessment materials for this appeal. Pursuant to s. 40(11) of the Act, the Municipality, in this case the City of Toronto is a party to this proceeding. However, the Municipality did not advise the Board of its position on the issues raised in these appeals, and no one appeared at the hearing on the Municipality’s behalf.

6Section 44(3)(b) of the Act, directs the Board to reduce the current value of the Subject Property if similar lands in the vicinity have been assessed at a lower value (“equitable reduction”). The purpose of this provision is to fairly distribute the municipal tax burden according to the value of the property possessed by each ratepayer. MPAC states that the equitable assessment for the Subject Property would be $365,156, which is less than 5% difference from the current value of $367,000. For that reason, MPAC submits that no equitable adjustment is required. Mr. Aziz did not make submissions with respect to the issue of equitable assessment. Therefore, this ground for appeal is not in issue.

Legislation

7Section 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.

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 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.

10Section 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.

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.

The Board’s Rules of Practice

12Rule 37 states:

Documents to be Filed

37. On or before the filing deadline set out in the schedule of events for a proceeding, each party must file all materials that they intend to rely on at a hearing event, including:

(a) all evidence, including expert reports;

(b) all statements of issues and responses; and

(c) witness statements.

ISSUE

13The issue to be determined on this appeal is what is the correct current value of the Subject Property for the taxation year 2017?

Discussion, Analysis and Findings

MPAC’s Evidence

14Dean Kolovos represented MPAC, and, in his capacity as Property Valuation Analyst, testified on behalf of the corporate assessor. Mr. Kolovos filed his Valuation Report along with his Equity Analysis Report, done in respect of the Subject Property.

15Mr. Kolovos gave a description of the Subject Property that was accepted by Mr. Azis. It is a residential condominium unit located in Toronto in Metro Toronto Condo Plan 897, Level 2, Unit 2, Level C, Unit 15. The building in which it is located is described as a “medium-high rise”. The unit itself has been deemed by MPAC to be of construction quality 8 out of 10. It is 1,244 square feet (“sq. ft.”) in size, has one-storey, and was built in 1989. It has two bedrooms and two bathrooms.

16This particular unit is located on the second floor of the building. It has an assigned parking space, but does not have any lockers for storage outside the unit itself. MPAC has selected comparable condominium sales that share this feature. Some also have more than one parking space. While different units in the subject property’s building may have different floor layouts, all units ending in “02”, as the subject property does, all have the same basic layout and floor area. Consequently, MPAC selected comparable sales as much as possible from the “02” units in this building.

17MPAC chose comparable sales as a means of determining the value of the subject property. All comparable units were selected from the same building as that in which the subject is located. The units were all built in 1989, all are one storey, and all but one (Unit 702) have one parking space. The relevant facts dealing with the sales data for each unit are contained in the following chart.

TABLE A: Comparison Sales at 205 Wynford Drive

Unit Address	Sale Date	Sale Price	Adj. Sale Price	Square Footage	Parking Spots
Subject Property				1,244	1
Unit 802	05/28/2015	$348,000	$366,128	1,244	1
Unit 702	12/03/2015	$435,000	$436,400	1,244	1
Unit 705	08/26/2016	$320,000	$304,903	1,237	2
Unit 2505	11/15/2016	$480,000	$448,884	1,237	1
Unit 907	10/03/2016	$395,000	$371,688	1,299	1
Unit 2407	11/30/2016	$455,000	$425,504	1,299	1
Unit 707	05/14/2015	$345,000	$362,971	1,299	1
Unit 1507	04/29/2016	$432,500	$422,732	1,299	1

18Mr. Kolovos notes that Unit 702 sold for $435,000 in December, 2015. This unit is the same size as the Subject Property, but has one extra parking spot. He states that the median sales value for the eight property sales, using time adjusted sales figures, was $397,000. The average of the eight sales is $392,406. MPAC’s evidence was that the median value per square foot of the eight comparable sales is $312.00.

MPAC’s Submissions

19MPAC submits that the correct current value as of the valuation day is $386,000, but that the correct assessment, taking into consideration all other factors would be $367,000.

20MPAC relies on the following factors:

(a) Other units in the building of the same square footage as the Subject Property were valued at or near this value. While some were significantly lower in assessed value and others significantly higher, a number were given current values in this range.

(b) In the opinion of the Assessor, no value is given in relation to the level of the unit within the building. A higher floor would not be valued at more per square foot than the same size unit on a lower floor.

(c) In the Assessor’s opinion, the nuisance factors described by the Appellant were not given a value by MPAC or by the Appellant and would not therefore be a factor determinative of value.

(d) There is no evidence that higher floors are preferred by everyone and should be given a higher value.

(e) Without a method of valuing the nuisance factor of being located just above the garbage bins and the moving area for the building, MPAC cannot fairly assign a reduction in the value of the unit.

Appellant’s Evidence

21Irfan Aziz represented the Appellants, himself and Rozina Aziz. Ms. Aziz did not attend the hearing.

22Mr. Aziz provided evidence inclusive of:

(a) four comparable properties from his building, showing their assessed values. None of these properties has been sold within between January, 2012 and December 31, 2015.

(b) An article by Jamie Sarner from 2013 entitled “Five Basic Rules When Buying a Condo in Toronto” and found at jamiesarner.com/Toronto-real-estate.

(c) An article by TheRedPin Team entitled “Five diferences [sic] Between Buying a Condo Unit on the Higher Floors Than Lower Floors”, from April, 2012.

(d) An article by Julie Cazzin entitled, “How to buy a condo”, from a periodical entitled MoneySense, dated May 2, 2011.

(e) An article entitled “The value of a floor: valuing floor level in high-rise condominiums in San Diego” by Stephen Conroy, Andrew Narwold and Jonathon Sandy, published in the International Journal of Housing Markets and Analysis, Vol. 6, No 2, 2013.

(f) Photographs taken by Mr. Aziz showing comparable views from his porch and the porch of Unit 802; the view from his living room window (showing the garbage and moving area for the building); and the views from all of his other windows.

23The Appellant used the adjustments contained in the article relating to the San Diego area in order to calculate what he asserts is the proper reduction in value that should be applied for the lower floor occupied by his unit. He submitted that the authors of the study in San Diego concluded that each floor gained a value of 2.2 percent per floor. Applying this to the Subject Property, the Appellant concluded that the current value of the subject property, as assessed by MPAC, should be reduced by $38,500 because it is located on the second level of the condominium building. The Appellant also testified that this value should be further reduced by $20,000 due to the noise and nuisance of the garbage room and moving room right outside and just below his living room windows.

Appellant’s Submissions

24Relying on his evidence and analysis, the Appellant submits that the correct current value as of January 1, 2016 for the 2017 taxation year is $308,500.

ANALYSIS

25In this case, MPAC presented evidence of values from eight similar units located in the same condominium complex. These units were similar in size to the subject, although located on different levels throughout the building. Five of the units sold for more than the current value of the Subject Property, ranging from $395,000 to $480,000 (without time adjustments). The remaining three sales were for $348,000, $320,000 and $345,000 (before time adjustments). One of the most expensive sales was Unit 702, sold in December, 2015, for $435,000 (unadjusted) while the Unit 802 immediately above it, sold in May, 2015, for $348,000 (unadjusted). These values contradict the Appellants’ theory of value increases as the level increases, although one example does not indicate a trend.

26While the article provided by the Appellants relating to the San Diego area in California was a well-researched report relating to a study of 2,395 condominium unit sales occurring in San Diego between 2006 and 2011, its application to any other market is speculative at best. The authors themselves point out other compelling theories which may in fact refute their results. For example, on page198 of the article the authors cite studies that showed that some buyers preferred to be closer to the ground because their commute would be shorter. Still others pay for property away from the city centre and closer to forested green spaces. In other words, the location of a city by itself could have an important effect on market trends. For this example, the authors looked at San Diego and cited research conducted in the area showing that location near a large body of water could inflate housing values to between 3 percent and 57 percent (page 199). The Board finds that, while interesting and informative, the literature provided by the Appellants is not determinative of an increase in values as one proceeds upwards in a medium- or high-rise residential building in Toronto.

27MPAC conceded that the nuisance factor presented by the garbage area and the moving area being right outside and below the living room window of the Subject Property may have provided better grounds for a reduction in the current value, but only if there were a means of quantifying a value for that nuisance. Unfortunately, the Appellants provided no cases or other means of quantifying the value of the nuisance. In that circumstance, the Board is left with no option but to accept the best evidence given at the hearing as to current value, which, in this case, is the evidence adduced by MPAC.

DECISION

28The current value of the Subject Property is confirmed at $367,000 for the 2017 and deemed 2018 taxation years.

2018 DEEMED APPEAL

29An 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.

30Section 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