O’Reilly v. Municipal Property Assessment Corporation, 2018 CanLII 50598

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE:

May 31, 2018

FILE NO.:

WR 152344

Assessed Person(s):

Thomas Charles O’Reilly, Deborah Anne O’Reilly

Appellant(s):

Thomas O’Reilly, Deborah O’Reilly

Respondent(s):

Municipal Property Assessment Corporation (“MPAC”) Region 09

Respondent(s):

City of Toronto

Property Location(s):

66 Valecrest Drive

Municipality(ies):

City of Toronto

Roll Number(s):

1919-023-110-02000-0000

Appeal Number(s):

3240682 and 3294721 (deemed 2018 appeal)

Taxation Year(s):

2017 and 2018 (deemed appeal)

Hearing Event No.:

696765

Legislative Authority:

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

Heard: April 10, 2018 in Toronto, Ontario

APPEARANCES:

Parties

Representative

Thomas O’Reilly

Self-represented

MPAC

Jessie Yu

City of Toronto

No one appeared

DECISION OF THE BOARD DELIVERED BY JENNIFER GRIFFITH

INTRODUCTION

1This appeal before the Assessment Review Board (“Board”) is filed by the assessed person, in respect to the returned assessment of $2,007,000 for the 2017 and the deemed 2018 taxation years for the subject property at 66 Valecrest Drive, in the City of Toronto.

2Jessie Yu, representative for MPAC (“representative”) takes the position that current value of the subject property should be $2,479,000, based on the sales of similar lands in the vicinity. She also takes the position that the total site area of 3,276 square feet (“sq. ft.”) for the subject property is correct, based on exterior measurement.

3Thomas O’Reilly (“appellant”) takes the position that the returned assessment of $2,007,000 is too high.

4He argued that the value attributed for the outdoor pool is too high; and that the subject property was listed as having three full bathrooms and two half bathrooms, and in fact, the subject has three full bathrooms and one half bathrooms.

5Based on these arguments, the appellant takes the position that a fair and equitable assessment should be $1,750,000.

6MPAC takes the position that an equitable reduction is not required. The appellant did not assert that an equitable reduction is required. Therefore, in this proceeding, this ground for appeal is not in issue.

ISSUE

7The issue to be determined in this appeal is what is the correct current value of the Subject Property for the 2017 and deemed 2018 taxation years.

DECISION

8The Board finds that the current value of the subject property is $2,479,000. As MPAC did not seek an increase in the assessment value, the Board confirms the returned assessment value of $2,007,000 for the 2017 and deemed 2018 taxation years.

REASONS FOR DECISION

Background

9The subject property is described as a two-storey single-family detached (not on water) dwelling, located at 66 Valecrest Drive, in the City of Toronto. The subject was built in 2000, with a total site area of 0.21 acres, a total building area of 3,276 sq. ft., a finished basement area of 1,178 sq. ft.; and with an outdoor pool. The subject is said to be located in the Edenbridge-Humber Valley neighbourhood in the City of Toronto

The Legislation

10In determining the value at which land shall be assessed, the Board must have regard to the following provisions of the Assessment Act (“Act”)

11Section 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.

12Section 19.(1) of the Act states:

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

13Section 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.

14Section 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.

15Section 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.

16In 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 Submissions

17In presenting her case, the MPAC’s representative presented a Valuation Report and testified to information contained in the report.

18MPAC testified that the subject property was re-measured April 6, 2009, because of a Request for Reconsideration (“RFR”), and was confirmed to having a total building area of 3,276 sq. ft., a two car garage, and an outdoor pool built in 2000.

19The representative testified that the subject property has an outdoor pool, and the impact on the assessed value is $64,000 which is calculated based on the size of the pool; and that MPAC uses external measurement for all properties in Ontario, and that the subject property is measured using exterior measurement, as are the comparable properties presented into evidence.

20In support of current value, the representative presented an analysis of six sales, of which three are located in the same homogeneous area (A69-901) as the subject property and the remaining three are from homogeneous areas (A64-901, A65-237 and A65-237). These comparable properties are located at 18 Edgehill Road, sold in 2015; at 10 Edgehill Road, sold in 2016; at 3 Woodcrest Drive, sold in 2015; at 18 Country Club Drive, sold in 2016; at 141 Valecrest Drive, sold in 2015; and at 10 Westridge Road, sold in 2016.

21The representative testified that on average, these six comparable properties are similar in total building area, in total site area, in year built, in quality class and with an average time-adjusted sale price of $2,368,457 ($765.50 per sq. ft.) based on total building area, which is significantly higher than the subject property with an assessed value of $2,007,000 ($612.63 per sq. ft.).

22Based on the above sales, the representative is of the view that the most similar comparable properties are 18 Edgehill Road, with a time-adjusted sale price of $2,587,839 and 10 Edgehill Road, with a time-adjusted sale price of $2,091,385. These two sales reflect an average sale price of $756.86 per sq. ft. When this value is applied to the subject property it results in a value of $2,479,000 ($756.86 X 3,276 sq. ft.).

23On cross-examination, the appellant suggested that MPAC’s methodology and standards are subjective. He wanted to know why the number of sale used to determine the time-adjustment factor varies, and why the only sales used occurred a year before and after the valuation.

24In response, MPAC’s representative stated that the number of sales vary, because it depends on the number of property sold in the open market reasonably close to the subject property; and in regard to why only sales that occurred a year prior and after the valuation date of January 1, 2016 are used, MPAC’s representative stated that it is because they are the best indicators of value.

25In regard to the issue of the total building area and finished basement, MPAC’s representative explained that MPAC uses external measurements for all properties in Ontario, and not internal measurements as suggested by the appellant.

26In regard to the issue of the outdoor pool, the representatives testified that outdoor pool adds value to the assessed value, and that the amount attributed to the subject property is $64,976 and that the value is calculated based on the size of the pool. The appellant also confirmed on cross-examination that the outdoor pool is useable.

27The representative also testified that there is no value attributed to the assessed value for open to above ceiling space, and for the number of bathrooms and/or half bathrooms, because the assessed value is calculated based on the total square feet of the subject property.

Appellant’s Evidence and Submissions

28In presenting his case, the appellant has testified to the information contained in his evidence package. The appellant testified that the total building area of 3,276 sq. ft. (1,361 sq. ft. on the main floor and 1,915 sq. ft. on the second floor) and 1,178 sq. ft. of finished basement, for the subject property as described by MPAC is incorrect.

29The appellant argued that two-thirds of the main floor area has raised ceilings, which he argues reduce the living space on the second floor. He estimates the total building area to be 2,328 sq. ft. (1,237 sq. ft. on the main floor and 1,091 sq. ft. on the second floor) and the finished basement area to be 1,092 sq. ft. based on internal measurements.

30The appellant argued that MPAC’s standards and methodology are subjective and flawed and that he will accept MPAC’s methodology if the returned assessment is reduced by $284,000 to recognize the open ceiling space.

31The appellant testified that the subject property is the only property that is in compliance with the building by-law on his street and that the design of having raised ceilings was to ensure compliance.

32The appellant argued that the outdoor pool adds no value to the assessment of the subject property, because potential buyers see a pool as a negative factor. He also argued that the pool is in need of repair and it is estimated to cost $13,000.

33The appellant argued that the subject property was assessed as having three full bathrooms and two half bathrooms, and in fact, the subject has three full bathrooms and one half bathroom. Based on this incorrect data, the appellant argued that the assessed value should be adjusted for the extra half bathroom.

34Based on the above arguments, the appellant submits that a correct current value should be $1,750,000. On cross-examination, MPAC’s representative responded to the issues of the total building area, the finished basement, the value added for the outdoor pool, the open to above ceiling space, and the number of bathrooms of the subject property.

35In support of current value, the appellant presented no sales evidence.

Board’s Analysis

36In reviewing all the above evidence, the Board finds that MPAC presented the best evidence in support of the issue of the site area of the subject property. The Board accepts MPAC’s total site area of 3,276 sq. ft., because it is based on external measurement (including all livable spaces like number of bedrooms, open to above spaces, kitchen etc.), and is a standard of measurement used by MPAC for all properties in Ontario.

37In regard to time-adjusted sale prices, the Board accepts both the actual and the time-adjusted sale prices. In regard to the time-adjusted sale prices, MPAC presented the 265 sales information upon which the time-adjustment factors were based on, in order to determine what the value of these 265 sales would have been as of the valuation date January 1, 2016.

38The Board finds that at the best evidence in support of current value is presented by MPAC with the two sales at 18 Edgehill Road, with a time-adjusted sale price of $2,587,839 and 10 Edgehill Road, with a time-adjusted sale price of $2,091,385. These two sales reflect an average sale price of $756.86 per sq. ft. When this value is applied to the subject property it results in a value of $2,479,000 ($756.86 X 3,276 sq. ft.).

39In support MPAC’s positon that external measurement is correct, MPAC cited three cases;

i. Hickey v. Municipal Property Assessment Corp. Region No. 13, [2011] O.A.R.B.D. No. 228 (“Hickey”);

ii. Grant v. Municipal Property Assessment Corp. Region No. 13, [2007] O.A.R.B.D. No. 212 (“Grant”); and

iii. Alexander v. Municipal Property Assessment Corp. Region No. 13, [2010] O.A.R.B.D. No. 411 (“Alexander”).

40In Hickey and Grant, the Board accepted MPAC’s measurement methodology because it is done consistently throughout Ontario in the preparation of the assessment roll, and, therefore, the Board found that it is appropriate to apply the same measurement methodology to the properties under appeal. The Board does not rely on Alexander because the Member’s findings in that case, indicate that the Member made no finding on the issue of external vs. internal measurements. The Member stated that “it is not the role of the Board or the appellant, or any other body to tell MPAC how to measure residences, or how to arrive at the assessment values”. The Member further stated that “it will not make a choice between the two methods of determining the square footage of the subject property”.

41The Board adopts the reasoning set out in Hickey and Grant, and accepts that MPAC’s external measurement methology should be applied to the Subject Property.

42The Board finds that the appellant presented no professional cost to cure evidence, to show how the repairs needed for the outdoor pool would impact the assessment value of the subject property. Also, regarding the Appellant’s assertion that an outdoor pool has a negative impact on the assessed value of the subject property, the Board finds that an outdoor pool has a positive impact on the assessed value of the subject property, because similar properties with outdoor pools presented into evidence, show sale prices significantly higher than the returned assessment of the subject property.

43The appellant presented no quantifiable evidence to demonstrate the impact of open to above ceiling space, and number of bathrooms on the assessed value of the subject property.

44The appellant presented no sales in support of current value.

45Based on all the above evidence, the Board finds that the current value of the subject property is $2,479,000.

CONCLUSION

46Based on all the evidence, the Board finds the current value is $2,479,000. MPAC did not seek an increase in the assessment value. Therefore, the Board confirms the returned assessment value of $2,007,000 for the 2017 and deemed 2018 taxation years.

2018 DEEMED APPEAL

47An 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.

48Section 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.