Assessment Review Board
Commission de révision de l’évaluation foncière
ISSUE DATE: June 26, 2018
Assessed Person: Laura Sabourin
Appellants: Luc Sabourin, Laura Sabourin
Respondent: Municipal Property Assessment Corporation (“MPAC”) Region 03
Respondent: City of Ottawa
Property Location: 118 Holmwood Avenue, Unit 1003
Municipality: City of Ottawa
Roll Number: 0614-052-601-31675-0000
Appeal Numbers: 3192057, 3192058 and 3190259, 3320330 (deemed 2016 appeal)
Taxation Years: 2014, 2015, and 2016 (deemed appeal)
Hearing Event No. 696865
Legislative Authority: Section 33 of the Assessment Act, R.S.O. 1990, c. A.31, as amended
Heard: May 1, 2018 in Ottawa, Ontario
APPEARANCES:
Parties
Representative
Luc Sabourin and Laura Sabourin
Luc Sabourin
MPAC
Marie Smith
City of Ottawa
No one appeared
DECISION OF THE BOARD DELIVERED BY SCOTT McANSH
1Luc Sabourin and Laura Sabourin have appealed three assessments issued against a condominium that they purchased on May 27, 2015. They argue that the assessments are too high and do not reflect the value the unit would likely have sold for on January 1, 2012.
2MPAC issued three assessments on the condominium unit pursuant to their omitted assessment power, set out in section 33 of the Assessment Act, R.S.O 1990, c A.31 (the “Act”). Two of those assessments were effective November 14, 2014 and the third was effective January 1, 2015. The November 14, 2014 assessments were for $6,066 and $589,934, for a total of $596,000. The January 1, 2015 assessment was for $521,308. There is also a deemed 2016 appeal of the January 1, 2016 assessment of $596,000. MPAC argues that the appropriate assessment for all of the taxation years is $580,000.
3The Sabourins argue that they did not get what they were told they were purchasing. They were assured a LEED certified building, which was not delivered. They also say that the actual square footage of their unit is less than what they were promised. They therefore argue that they would have paid less for the property if they had known what they were actually purchasing. They rely on the sales of units in other downtown condominiums to support their recommended assessment of $470,000 for all taxation years.
4I find that the current value of the apartment and storage locker is $524,500 and that the assessment against the Sabourins for that property is effective from May 27, 2015. I also find that the current value of the parking owned by the Sabourins is $77,500, and that the omitted assessment against the Sabourins for that land commences on August 12, 2016.
Issues
5Three of the appeals before me are for omitted assessments, meaning that they were applied retroactively. That is, the land was not assessed when regular assessments were returned to the municipality. MPAC became aware of the improvements some time later and issued assessments to add that assessment value to the assessment roll. Those assessments include an effective date when the land became liable to assessment, in this case November 14, 2014. While the land may have been assessable on that date, the evidence from the Sabourins is that they did not own the property on that date. I must therefore determine the appropriate effective date of the omitted assessments against these taxpayers.
6The second issue is if the purchase price paid by the Sabourins can be disregarded. Generally, the sale of a property relatively close in time to the valuation day is the best evidence of what it likely would have sold for on the valuation day. The Sabourins claim that they paid more than they would have if they had known that the developer would not deliver the product it promised. They suggest that a better guide to value is the sales of units in other condominium projects. But before considering that evidence, I must determine if the purchase price can be disregarded.
7If the purchase price can be disregarded, I must look at the sales of other properties to determine what this property likely would have sold for on January 1, 2012.
8I find that the omitted assessments were only liable against the Sabourins from the date they owned the property: May 27, 2015 for the apartment and storage locker, and August 12, 2016 for the parking spaces. I also find that, notwithstanding the Sabourins disappointment with their apartment, the purchase price they paid is the best evidence of value. Finally, in evaluating the sales presented by the parties, I find that the purchase price is a good indicator of value.
Current Value
9This condominium is in one of the residential towers constructed at Ottawa’s Lansdowne Park in 2014 during the City’s large redevelopment of that urban land. This is a 1,080 square foot, two bedroom apartment on the 10th floor of the tower. The Sabourins also own a storage locker, two parking spots, and one motorcycle parking spot, in the same building.
Effective Date
10Omitted assessments are assessments that MPAC is required to make “if land liable to assessment has been in whole or in part omitted from the tax roll for the current year or for all or part of either or both of the last two preceding years, and no taxes have been levied for the assessment omitted,” s. 33(1) of the Act. Land that is omitted from the assessment roll often has some event that changes its status and makes it liable to taxation. That can include a change in use or, like this case, a newly constructed improvement to land. Those changes take effect on a particular day and the Act permits MPAC to reach back two years to get to the start of when the land became assessable.
11MPAC issued these assessments effective November 14, 2014. They said that this was the occupancy date provided by the developer and that they rely on that information as a reasonable guide to when new construction becomes assessable. The issue here is that the Sabourins did not own the land on that date. Section 17 of the Act states that, with the exception of Crown land, “land shall be assessed against the owner.” That is, even if the land were assessable on November 14, 2014, it was not assessable against the Sabourins. MPAC argues that the Sabourins were using the property before they owned it, but that is not relevant to the validity of the assessment. Assessments are made against owners.
12The Sabourins had two closing dates for their property due to delays in construction. They became owners of the apartment and storage locker on May 27, 2015 and they became the owners of the three parking spaces on August 12, 2016. They could only be assessed for that property from the date they owned it.
13The omitted assessment of the apartment and the storage locker is effective against the Sabourins on May 27, 2015 and the omitted assessment of the parking spots is effective against them on August 12, 2016.
The Purchase Price
14The evidence indicates that the Sabourins paid $526,400 for the apartment and storage locker. They paid an additional $77,500 for the three parking spots at a later date. They argue that they did not get what they agreed to purchase. The deficiencies they outline are: (1) a lack of LEED certification; (2) less square footage than agreed; and (3) no electric car charges in the parking garage. MPAC argued that none of these alleged deficiencies would impact value. I do not find that any of those concerns are significant enough to disregard the purchase price as the best indication of value.
15The Sabourins entered evidence that certification under the LEED program leads to higher resale values for condominiums in Toronto. They argue that they were purchasing, in part, the expected increase in value that LEED certification would bring. The developer’s failure to secure that certification made the project less valuable. I have no doubt that LEED certification adds value to a building, but it does not follow that a lower purchase price would have been paid. The bundle of rights that the $526,400 purchase price includes is varied and complex. It is impossible to say how a minor change in the package would alter the sale price. I do not see the failure to certify as a fundamental change to the product.
16The square footage of the apartment is in dispute. The developer stated that the Sabourins were getting a 1,080 square foot unit, and MPAC based its assessment on that value. But they say they have had it measured at 950 square feet. They say that if they were purchasing a smaller apartment they would have paid less. I do not have adequate evidence to determine the dispute between the developer and the Sabourins. The developer was not before me to defend its position and it would, therefore, be unfair for me to determine the actual square footage of the unit. Without a finding that the square footage is actually less, I cannot say that the Sabourins did not get what the bargained for.
17Finally, the Sabourins say that they were promised electric car chargers in the parking garage that were not delivered. I did not hear any evidence that the Sabourins own an electric car, or have suffered any personal loss from the failure of the developer to install those chargers. I therefore cannot say that the Sabourins would have paid less for a building without electric car chargers.
18I find that the purchase price of the property, which was negotiated within a year of the valuation day, is by far the best evidence of its value.
The Sales
19Having found that the purchase price is the best evidence of value I do not need to look at the other sales information. The sales show that each building has its own likely sales prices. It is difficult to draw conclusions from the sales provided. The sales do not show that the purchase price paid by the Sabourins was unreasonable.
20MPAC presented the sales of other units in the same building as a Sabourins. The Sabourins submitted the sales of apartments in five other downtown condominium towers. I have excluded sales that vary more than 20% in size from the Sabourins apartment and, other than in the Sabourins’ newly constructed building, I have excluded sales taking place more than a year form the January 1, 2012 valuation day. The relevant sales are:
Address
Size
Year Built
Sale Date
Sale Price
118 Holmwood Avenue, Unit 1003
1,028
2014
118 Holmwood Avenue, Unit 803
1,028
2014
June 2015
$531,859
118 Holmwood Avenue, Unit 603
1,028
2014
May 2015
$512,420
118 Holmwood Avenue, Unit 503
1,028
2014
May 2015
$515,693
118 Holmwood Avenue, Unit 403
1,028
2014
June 2015
$565,976
118 Holmwood Avenue, Unit 1402
1,028
2014
May 2015
$540.919
1014 Bank Street, Unit 102
1,032
2009
March 2012
$401,500
808 Bronson Avenue, Unit 105
961
2011
June 2012
$396,400
808 Bronson Avenue, Unit 215
961
2011
Nov 2011
$408,000
550 Cambridge Street, Unit 307
831
1987
Nov 2012
$312,000
550 Cambridge Street, Unit 407
831
1987
April 2012
$330,000
550 Cambridge Street, Unit 703
1,080
1987
July 2012
$370,000
300 Powell Avenue, Unit 206
990
2004
Feb 2012
$375,000
300 Powell Avenue, Unit 212
1,030
2004
May 2012
$433,000
300 Powell Avenue, Unit 308
990
2004
Aug 2012
$400,000
499 Sunnyside Avenue, Unit 105
920
2004
Apr 2012
$330,000
499 Sunnyside Avenue, Unit 108
1,106
2004
Dec 2011
$377,000
499 Sunnyside Avenue, Unit 306
1,194
2004
Oct 2011
$405,000
21The sales show that more dated buildings, such as 550 Cambridge Street, sold for less than more recently constructed buildings. The only building constructed less than a decade before the Sabourins’ is 1014 Bank Street, and MPAC pointed out that the sale there in the relevant time frame were bankruptcy sales. There is always some reason to doubt that regulated sales such as those are comparable to sales conducted by more unrestricted actors. I therefore do not place much weight on the sale for 1014 Bank Street. The remaining sales from other buildings are too different in age of construction to provide much guidance on what the Sabourins’ property likely would have sold for on January 1, 2012.
22The sales in the same building, however, show that the purchase price the Sabourins paid is in line with the other sales in that building. While those buyers may have had similar concerns with the developer promises, it is unlikely that each buyer would have paid a different amount if the LEEDS promise and the promise of electric car charging were not met. I find that the sales evidence supports the purchase price paid by the Sabourins.
Current Value Conclusion
23I therefore find that the current value of the apartment and storage locker is $526,400 and that the assessment of that land is effective against the Sabourins as of May 27, 2015. I also find that the current value of the parking spaces owned by the Sabourins is $77,500 and that the assessment of that land is effective against the Sabourins as of August 12, 2016.
Equity
24Once I have determined current value, clause 44(3)(b) of the Act requires that I look at the assessments of similar lands in the vicinity and determine if it would be fair or equitable to assess this property at its current value. Subsection 19(1) of the Act states that all property is to be assessed at its current value. I may only assess the Sabourins’ property below its current value if there is evidence that similar property in the vicinity is assessed below its current value. There is no such evidence here.
Conclusion
25I find that omitted assessments, like all other assessments, cannot generally be made against a non-owner. The effective date of theses assessments must reflect the ownership interest in the land at the relevant time. I also find that the purchase price paid for this property is the best evidence of its current value and that there is no reason to assess this property at anything other than its current value.
26I therefore cancel the two assessments issued with an effective date of November 14, 2014. The 2015 taxation year assessment is effective against the Sabourins on May 27, 2015 and is confirmed at $521,308 because MPAC did not file a notice seeking a higher assessment, as required by Rule 40(a) of the Board’s Rules of Practice and Procedure. The assessment for the 2016 taxation year is confirmed at $596,000 because the total value of the apartment, storage locker and parking is $603,900 and MPAC did not seek a higher assessment for that taxation year.
“Scott McAnsh”
SCOTT McANSH
VICE-CHAIR
Assessment Review Board
A constituent tribunal of Environment and Land Tribunals Ontario
Website: www.elto.gov.on.ca Telephone: 416-212-6349 Toll Free: 1-866-448-2248```