Best v. Municipal Property Assessment Corporation, 2018 CanLII 5660

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: February 06, 2018

FILE NO.: WR 150292

Assessed Person(s): Ralph Gordon Best, Catherine Marie Best

Appellant(s): Catherine Best, Gordon Best

Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 07

Respondent(s): Township of Havelock-Belmont-Metheun

Property Location(s): 186 FR 62

Municipality(ies): Township of Havelock-Belmont-Metheun

Roll Number(s): 1531-010-008-08110-0000

Appeal Number(s): 3225381

Taxation Year(s): 2017

Hearing Event No. 690966

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

Heard: January 9, 2018 In Havelock, Ontario

APPEARANCES:

Parties	Representative
Ralph Gordon Best, Catherine Marie Best	Gordon Best
MPAC	Jacqueline Irwin
Township of Havelock-Belmont-Metheun	No one appeared

DECISION OF THE BOARD DELIVERED BY TYRONE D. SKANES

ISSUE

1The appeal before the Assessment Review Board ("Board") is filed by Ralph Gordon Best and Catherine Marie Best (“the Appellants”) in respect of the assessment of a single- family detached seasonal/recreational home on water, for the 2017 taxation year. The subject property located at 186 FR 62 (“SP”).

2The single-storey dwelling with 1,545 square feet ("sq. ft.") was built on Long Lake in 1991. The lot size is 1.14 acres with a water frontage of 150 feet (“ft.”). The SP has a septic bed but uses lake water. There is no municipal hydro service to the building and MPAC has applied a $49,000 negative adjustment to the assessment to account for this deficiency. The property is accessible by a gravel road on a seasonal basis.

3Jacqueline Irwin, representing MPAC introduced the sales of three comparable properties that she said were good comparators, despite being inferior to the SP. She said that the current value assessment (“CVA”) of the SP was initially $325,000 but she applied the $49,000 negative adjustment that returned the CVA at $276,000 and that this value was fair and reasonable and recommended that the Board confirm this assessment.

4Gordon Best, representing himself and his wife, entered one comparable sale into evidence. He strongly disagreed with MPAC’s assessment and said that with there being no hydro service, only seasonal access, and the lake being very small with few properties in comparison to other areas lakes, that the assessment ought to be $175,000 and was recommending the Board reduce it to that value.

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 finds that the current value of the SP as of January 1, 2016 is $325,000 but confirms the MPAC recommendation at $276,000 and that this value is equitable with the assessment of similar lands in the vicinity.

REASONS FOR DECISION

Relevant Legislation

8Section 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

9Ms. Irwin’s valuation report was entered into evidence as Exhibit 1 and an Equity Analysis Report as Exhibit 2. She testified that the direct sales comparison approach to value was used in determining the current value of the SP.

10Ms. Irwin entered the sales of three properties that she opines are good comparators to the SP, despite being inferior, as all are waterfront seasonal properties. All are located on area lakes within a twenty kilometer radius of the SP, but are within the same homogenous neighbourhood.

11Ms. Irwin testified that the SP has no hydro service to the property and therefore a monetary adjustment of $49,000 was applied to the assessment to account for this deficiency and that the CVA at $276,000 is included this adjustment.

12Ms. Irwin testified that she time adjusted the sales prices (“TAS”) of the comparable properties to the valuation date of January 1, 2016.

13Ms. Irwin testified that she believed the reduced CVA of $276,000 was fair and reasonable and recommended that the Board reduce the assessment to that value

14Ms. Irwin entered an equity analysis into evidence. She used the sales of 30 waterfront seasonable properties and determined that the median assessment to sales ratio (“ASR”) was 1.0. Based on that finding she determined that the equitable assessment of the SP returned at $276,000 and that an adjustment was not required for equity.

15On cross-examination, Ms. Irwin testified that the monetary adjustment ascribed to the CVA of the SP was specific to this property. Other properties that were given adjustments for no hydro service could be more or less than the SP, depending on the differences of the various characteristics of the property being assessed.

Appellants’ Position and Evidence

16Mr. Best entered a documentary package as Exhibit 3 and an Addendum to that evidence as Exhibit 4.

17Mr. Best admitted that, while he was representing himself, he had no experience in land valuation. He entered a great deal of data in his evidence packages that pertained to either vacant lands or properties for which there had been no recent sales.

18Mr. Best did enter one comparable property located at 210 FR 61 which sold in April 2016 for $340,000. The assessor advised that this property had recently sold again, in May 2017 for $369,000 but she did not have time to investigate the sale.

19Mr. Best testified that he disagreed with how MPAC assessed the SP in comparison to the comparable properties. He said that not having hydro is a significant issue and that he had discussions with Hydro One and was told that it would cost approximately $110,000 to bring hydro into the area and there were no immediate plans to do so. He would be bearing this cost by himself if he chose that option. He also said that comparing the SP, located on a small lake, to others on much larger lakes was also unfair. He advised that Long Lake had only seven cottages whereas West Twin Lake is much larger and has many more properties.

20Mr. Best said that he believed that the entire cost of bringing hydro to the property should be subtracted from the assessment and does not believe that the current adjustment of $49,000 is adequate.

21Mr. Best summed up his presentation by recommending the Board reduce the CVA of the SP to $175,000.

22On cross-examination Mr. Best admitted that the SP was without hydro when he obtained the property. He also admitted that the structure was not totally without hydro as he had installed a rooftop system to harness hydro and supply it to the cottage. He said that the stove was powered by propane.

Board's Deliberations - Current Value

23The 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.

24The Board has carefully considered the testimony of the parties and the documentary evidence tendered as exhibits.

25The Board, when comparing properties, does not expect exactness or sameness. Therefore, the Board looks at similarity of characteristics, amenities and location to determine comparability.

26The 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.

27MPAC submitted the sales of three properties for consideration. All of the sales occurred within the time period that the Board considers ideal for comparison. Despite the differences between the properties the Board is of the opinion that they are more similar than dissimilar and will consider these properties. These properties are reflected in Table 1 below.

28Mr. Best submitted the sale of one property located on Long Lake for consideration. This property is very similar to the SP. The Board used the time adjustment factors from Exhibit 1 to determine a TAS price for this property. Therefore, the Board will consider this property and it is included in Table 1 below.

29Mr. Best placed considerable emphasis on the fact that hydro service is not supplied to this property by Hydro One. He produced an estimate of the cost to supply hydro to the property, determined at a meeting with Hydro One and Kawartha Utility Services in the fall of 2015 that totalled $109,900. He said that it was his opinion that this total amount should be deducted from the assessment of the SP to account for this deficiency.

30The Board rejects this argument. First of all, the SP was without hydro service when the Appellant came into possession of the property. Secondly, the assessor advised the Board that the SP indeed did have a limited amount of electricity. Mr. Best had installed a small rooftop system that harnesses power to supply part of the building with electricity. The Board agrees with the negative adjustment applied by MPAC to the assessment to account for no hydro service of $49,000.

31The Board also rejects the Appellant’s argument that MPAC’s comparable properties should not be considered due to being on a different lake. The salient characteristics of these properties are sufficiently similar to the SP for them to be considered.

32The comparable properties are:

Table 1

Property	Water Frontage (Feet)	Year round access	Shore	Building Area (Sq. Ft.)	Lot Size (Acres)	Year Built	Time Adjusted Sale Price (“TAS”)	Inferior, Relatively Comparable or Superior
Subject Property	150	No	Rocky	1,545	1.14	1991	N/A
MPAC
Sale 1	95	No	Gravel	599	0.28	1945	$187,790	Inferior
Sale 2	96	No	Sandy	823	0.26	1964	$223,776	Inferior
Sale 3	145	No	Gravel	880	0.6	1970	$218,655	Inferior
Appellant
Sale 4	520	No	Sandy	1,305	5.07	1980	$327,080	Superior

33As shown in Table 1 above, the Board listed the main features of the sales comparables, in 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 inferior, relatively comparable or superior to the SP.

34In the Board’s determination sales one, two and three are inferior to the SP owing to having less water frontage than the SP, the structures are substantially older and the building area is smaller. The lot sizes are all smaller than the SPs. Sale four is superior to the SP as it has a substantially larger area of water frontage, has a sandy shoreline, a significantly larger lot and is similar in year built. None of the properties have year round access or hydro service.

Table 2

35The Board believes that the SP’s CVA ought to be higher than the highest sale price of the inferior properties and lower than the sale price of the superior property and Table 2 demonstrates this range.

36Therefore, the Board finds that the current value of the SP to be $325,000, and accepts MAPC’s $49,000 adjustment for hydro, resulting in a CVA of $276,000.

Board's Deliberations – Equity

37MPAC entered an equity analysis report into evidence. The sales of 30 waterfront seasonal properties were used in the analysis. The assessor said that the median ASR returned at 1.0 and this indicated to her that an adjustment was not required for equity. The Board agrees that an adjustment for equity is not required.

CONCLUSION

38The Board finds the CVA of the SP to be $325,000 but confirms it at the recommended adjusted CVA of $276,000 for the 2017 taxation year and finds that this value is equitable with the assessment of similar lands in the vicinity and an adjustment is not required for equity.