Allison Hawkins v. Municipal Property Assessment Corporation, 2018 CanLII 58331

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: June 26, 2018 FILE NO.: WR 151392

Assessed Person(s): Allison Hawkins Appellant(s): Allison Hawkins Respondent(s): Municipal Property Assessment Corporation ("MPAC") Region 09 Respondent(s): City of Toronto

Property Location(s): 15 Windermere Avenue Unit 312 Municipality(ies): City of Toronto Roll Number(s): 1904-011-070-00272-0000 Appeal Number(s): 3229655 and 3298939 (deemed 2018 appeal) Taxation Year(s): 2017 and 2018 (deemed appeal) Hearing Event No.: 690564

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

Heard: December 1, 2017 in Toronto, Ontario

APPEARANCES:

Parties	Representative
Allison Hawkins	Self-represented
MPAC	Erika Greer
City of Toronto	No one appeared

DECISION OF THE BOARD DELIVERED BY CAROLINE KING AND PAUL MULDOON

INTRODUCTION

1The Appellant, Ms. Hawkins, resides on the third floor of a twenty-seven floor condominium built in 2007 and located at 15 Windermere Avenue, Suite 312, Toronto, Ontario (the "Subject Property"). She is appealing her $566,000 property tax assessment for the 2017 taxation year on the grounds that her assessment is too high. The Appellant submits that assessing her property based on MPAC's square feet valuation model is flawed because the resultant value is above what she believes she could sell the property for in a fair market sale. The Appellant argued that the assessed value for the 2017 tax year increased unreasonably since the last assessment cycle. The Appellant argues that the assessment should be $489,000.

2Ms. Greer, MPAC's Representative, argues that the current value is actually $597,000, based on a square foot valuation, but due to the smaller windows in the Subject Property compared to other units in the building, MPAC applied a 5% downward adjustment to arrive at the 2017 assessment of $566,000. MPAC's Representative submitted that MPAC would accept a current value assessment of $549,000 which was the value proposed by MPAC to the Appellant prior to this hearing. Ms. Greer did not state the rationale for this further reduction.

DECISION

3For the reasons that follow, the Assessment Review Board ("Board") finds that the current value of the Subject Property for the 2017 and deemed 2018 taxation years is $543,000. The Board finds that no reduction in this current value is required for the assessment to be equitable with the assessments of similar properties in the vicinity.

REASONS

Legislation

4Clause 44.(3)(a) of the Assessment Act ("Act") requires the Board to "determine the current value of the land." Current value is defined in section 1 as "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." That is, the Board must determine what the Subject Property would have sold for in an arm's length transaction on the relevant valuation day, set pursuant to section 19.3 of the Act, as January 1, 2016 for the 2017 and 2018 taxation years.

5Once the Board has determined the current value, clause 44.(3)(b) requires that the Board "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" but only if that adjustment would result in a reduction of the assessment.

6In addition to the 2017 taxation year appeal filed by the Appellant, there is a 2018 taxation year appeal before the Board. This is because, pursuant to section 44.(26), a 2018 appeal is deemed to have been filed if the 2017 taxation year appeal was "not finally disposed of before March 31, 2018."

Current Value

7The best evidence of current value is a sale of the property on or near the January 1, 2016 valuation day. When such a sale did not happen, the sales of similar properties on or near the January 1, 2016 valuation day are the next best evidence of value. Sales of other properties show how the market likely would have treated this property on the valuation day.

8The parties agree that the Subject Property is a 1,400 square foot, irregularly shaped condominium, located on the third floor of the twenty-seven floor condominium building built in 2007. Unlike many other units in the condominium building, the property does not have a balcony or storage locker, and the property's windows are regular windows, not floor to ceiling windows. The property has an extra half-bathroom compared to many other units in the building.

Issue: Whether MPAC's recommendation of Current Value is correct considering that the suggested comparables submitted by MPAC have open balconies although are smaller in square footage?

MPAC's Suggested Comparables

9MPAC provided the sales of eight units located in the same condominium to support its opinion of value. All of these properties are located in the same condominium building as the Subject Property. None of these properties is identical to the Subject Property. Only two of these sale properties were sold within the shoulder 1 year periods from the January 1, 2016 valuation date. Unlike the Subject Property, all of the units that sold have floor to ceiling windows and open balconies. MPAC submitted a time adjusted sale price for the units for the purpose of comparison. The most relevant aspects of the properties are described in the following table:

Property/Sale #	Suite #	Square Footage	Balcony	# Baths	Sale Date	Sale Price	Time Adjusted Sale Price
Property	312	1,400	No	2.5	n/a	n/a	n/a
1	810	1,119	Yes	2	12/012/2014	$469,000	$481,206
2	1010	1,119	Yes	2	06/23/2014	$460,000	$477,710
3	1510	1,119	Yes	2	04/23/2014	$475,000	$495,295
4	2010	1,119	Yes	2	10/29/2015	$424,000	$424,000
5	2110	1,119	Yes	2	03/25/2013	$479,000	$514,110
6	2210	1,119	Yes	2	01/30/2014	$485,000	$508,481
7	2410	1,119	Yes	2	09/17/2015	$495,000	$498,567
8	2610	1,119	Yes	2	10/31/2013	$489,000	$516,194

Appellant's Suggested Comparables

10The Appellant provided sales information for numerous units in the condominium building. Eleven of the sales date back to 2008. Four sales date back to 2012, one sale dates back to 2016, and one sale dates in 2017. Details for sales from 2012 to 2017 are set out below. The sale details are based on information sheets generated by Re/Max Hallmark Realty Ltd. The time adjusted sale price for these units was not provided.

Property/Sale #	Suite #	Square Footage	Balcony	# Baths	Sale Date	Sale Price	Time Adjusted Sale Price
Property	312	1,400	No	2.5	n/a	n/a	n/a
1410	1,000-1,199	Yes	2	09/19/2012	$464,900	n/a
2710	1,000-1,199	Yes	2	10/05/2012	$485,000	n/a
1205	1,000-1,199	Yes	2	10/02/2012	$468,300	n/a
2605	1,000-1,199	Yes	2	11/26/2012	$491,000	n/a
1205 (overlooks water)	1,000-1,199	Yes	2	04/19/2016	505,000	n/a
2605	1,000-1,199	Yes	2	01/03/2017	$534,000	n/a

Board Analysis

11The Board has not considered the Appellant's suggested comparable units sold in 2012 because those sales took place approximately three and a half years prior to the valuation date of January 1, 2016. Markets change over time and sales from 2012 are not a good indication of what property would likely have sold for on January 1, 2016. In addition, any comparison is even more problematic as there are no time adjusted sale values for these sales. Likewise, the Board has not considered MPAC's suggested Sales 5 and 8, because these sales date back more than two years from the January 1, 2016 valuation date.

12The essence of MPAC's submissions is that, when reviewing the comparables, the best way of coming to the current value is to determine the value based on the square footage of each unit. It is MPAC's contention that the square footage determines value, irrespective of what whether the unit is on an upper level or lower level. MPAC finds that the per square foot value is $426.81 and, on this basis, the Subject Property has a current value of $597,000 (rounded).

13The Appellant submits that her inability to sell her property in 2012 for her (then) assessed value supports her opinion that MPAC's valuation model (including the square foot valuation model) is flawed. The Board is not in position to find why the Appellant's unit did not sell in 2012. The issue for the Board to determine for this appeal is the Subject Property's current value for the present assessment cycle.

14Where there is not a sale of a unit exactly the same as the Appellant's property on or about the January 1, 2016 valuation date, a square foot valuation model, such as that proposed by MPAC, is an accepted method of assessing value. There must, however, be reasonable adjustments for any other significant quantifiable differences from the Subject Property to the suggested sale units.

15The differences between the Subject Property and the units sold is that, while the Subject Property is larger by just under 300 square feet and has an extra half-bath, it does not have floor-to-ceiling windows, and it does not have an open balcony. Unfortunately, neither MPAC nor the Appellant present specific evidence to guide the Board with respect to the relative implications of each of these features on current value.

16With respect to the storage locker, the Appellant argued that the addition of a storage locker made a quantifiable difference to the value of her property. She did not present any corroborating reliable evidence to assist the Board in determining any actual quantifiable value of a storage locker. The Board does not have complete evidence of which of the comparables have lockers and which do not and the relative value of the storage lockers.

17The Subject Property is some 300 square feet larger than most of the comparables and has an extra half-bathroom. However, it has no balcony. While it is likely the extra space and additional half bathroom have value, the Board also finds that this value is likely not equal to the value of the addition of an open balcony.

18MPAC assigned, and applied, a 5% downward adjustment to the assessment for the windows. Apart from the windows, the Board determines that the most significant quantifiable difference based on a square foot valuation method between the Subject Property and the comparables put forward by MPAC is that MPAC's comparables all have open balconies, while the Subject Property does not have this feature. The Board determines that there is value related to an open balcony. The parties did not provide the Board with any specific details about the value of an open balcony.

19The Board finds that an open balcony provides additional living space and adds value. The Board determines that a further modest downward adjustment of approximately 4% from the assessed value is appropriate to account for the lack of a balcony. As noted, MPAC has already reduced the current value from $597,000 to $566,000 due to the fact that the Subject Property does not have floor to ceiling windows. MPAC suggested that it would accept an additional adjustment from $566,000 to $549,000 for reasons that were not explained to the Board. The Board agrees that an additional downward adjustment is required and finds that it can be attributable to the fact that the Subject Property has no balcony. The Board assigned 4% downward adjustment on the assumption that the value of a balcony is roughly similar to the value attributed to having floor to ceiling windows (where MPAC assigned a 5 %downward adjustment). Neither party made submissions on the value that should be attributable to a balcony. A 4% downward adjustment in addition to the 5% downward adjustment from $597,000 results in the Subject Property having a current value of $543,270, which the Board rounds to $543,000.

20The Board finds that the current value of the subject property for the 2017 tax year is $543,000. In other words, the Board finds that the Subject Property would likely have sold for $543,000 on January 1, 2016.

21The Appellant argued that the assessed value of her property has increased unreasonably from the past assessment cycle and has increased more than other units in her condominium building. Section 44.(3) of the Act limits the Board's inquiry to what the property would likely have sold for on the January 1, 2016 valuation day. How that value compares to the values based on past assessment cycles is not within the Board's power to consider, nor does it relate to the essential issue of what the property would have likely sold for on January 1, 2016. The Board cannot, therefore, address the Appellant's issues regarding the increases in this assessment of his property over time. The assessment value must be considered based on the market evidence around this valuation day.

Equity

22The Board was not presented with any evidence that establishes that assessing the Appellant's property at its determined current value of $543,000 would be unfair or inequitable. There is no adjustment required to make the assessment equitable with the assessments of similar property in the vicinity.

CONCLUSION:

23The sales evidence indicates that the Subject Property would likely have sold for $543,000 on January 1, 2016. There is no indication that it would be inequitable to assess the property at that current value. The Board therefore reduces the assessment for the 2017 taxation year from $566,000 to $543,000. The Board reduces the assessment for the 2018 taxation year from $549,000 to $543,000.