Hayes v. Municipal Property Assessment Corporation, 2018 CanLII 62972

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: July 06, 2018

FILE NO.: WR 153342

Assessed Person(s): Daniel John Hayes

Appellant(s): Daniel John Hayes

Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 32

Respondent(s): Township of Manitouwadge

Property Location(s): 28 Ohsweken Road

Municipality(ies): Township of Manitouwadge

Roll Number(s): 5866-000-001-01100-0000

Appeal Number(s): 3224657 and 3315019

Taxation Year(s): 2017 and 2018

Hearing Event No.: 696889

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

Heard: May 2, 2018 by telephone conference call

APPEARANCES:

Parties

Representative

Daniel John Hayes

Self-represented

MPAC

Glen Spiess

Township of Manitouwadge

Margaret Hartling

DECISION OF THE BOARD DELIVERED BY ANTHONY LaREGINA

INTRODUCTION

1The subject property is a single-family one and a half-storey detached dwelling located at 28 Ohsweken Road in the Township of Manitouwadge. The home was built in 1956, has two bedrooms and one bath, and is noted as being in average condition. The dwelling has 838 square foot of building area located on a 0.13 acre lot. The dwelling’s building area consists of 532 square feet on the first floor, 306 square feet on the second floor and 532 square feet of unfinished basement. For the 2017 and 2018 taxation years, the current value assessment (“CVA”) was returned at $23,000.

2Glen Spiess, the assessor from MPAC, provided the Assessment Review Board (“Board”) with an estimate of current value of $14,800 based on six comparable property sales located within the vicinity of the subject property. Mr. Spiess made no further equity adjustment after presenting an equity study showing a median Assessment to Sale Ratio (“ASR”) of 1.04. Mr. Spiess recommends a reduction of the assessment as returned 23,000 to $14,800 for the 2017 and 2018 taxation years.

3Daniel John Hayes, (“Appellant”) submits that based on the sale of four similar properties in his immediate neighborhood as well as deficiencies in his property, the total property value of his home should be no more than $6,100 which includes $5,000 for land and $1,100 for building. The Appellant submits that he is prepared to accept a value between $6,100 and the $14,800 as presented by MPAC.

ISSUES

4The issues to be determined are:

i.) What is the correct current value of the subject property for the 2017 and 2018 taxation year?

ii.) Is the current value as determined by the Board equitable in reference to the assessments of similar lands in the vicinity?

DECISION

5The Board finds the current value of the subject property for the 2017 and 2018 taxation years to be $13,325.

6The Board also determines that the current value requires no further adjustment in order that the assessment of the subject property is equitable with the assessments of similar lands in the vicinity.

7The Board will therefore reduce the assessment of the subject property from $23,000 to $ 13,325 for the 2017 and 2018 taxation years.

REASONS FOR DECISION

Current Value – Evidence and Analysis

8In accordance with s. 44.(3)(a), the first mandate of the Board is to determine “the current value of the land”. Section 1 of the Assessment Act (“Act”) defines current value 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.”

9That is, for the 2017 and 2018 taxation years, the Board must determine what the subject property would have sold for in an arm’s length transaction on the January 1, 2016 valuation day set by s. 19.2 of the Act.

MPAC’s Position

10Mr. Spiess presented six comparable property sales located in the vicinity of the subject property. He testified that all six properties are relatively comparable to the subject property and the adjusted sale range of the six comparable properties is between $15,032 and $40,310 with the lower number representing the adjusted sale value of 8 Redwing Avenue. Mr. Spiess submits that the best comparable to the subject property is 8 Redwing which has identical lot size, building area and quality as the subject property.

11Mr. Spiess recommended the reduction of the assessed value from $23,000 to $14,800 as a result of reviewing a series of photographs provided by the appellant showing the condition of his home as well as making an adjustment from forced air to no heating. Mr. Spiess also did an exterior inspection of the subject property and believed that the condition change to the subject property from average to fair was warranted therefore putting the subject at the lower end of the current value range

12Mr. Spiess states that while the current value of the subject property should be in line with the sale of 8 Redwing Avenue at $15,032, he recommends a slightly lower current value of $14,800 because of the condition of the subject property.

Appellant’s Position

13Mr. Hayes, the Appellant, claimed that the comparable sales put forward by MPAC are 2 kilometers away from his property while the four sales he is entering are within 300 meters.

14Mr. Hayes further claims that his comparable properties are also very similar to his property in terms of lot size, building area and quality and therefore better comparable properties than the ones entered by MPAC. The Appellant’s comparable sales are as follows:

Assessed Value $

Sale Value $

22 Ohsweken Road

29,500

15,000

10 Ohsweken Road

38,000

16,000

46 Ohsweken Road

31,500

15,000

5 Wenonah Drive

32,500

19,000

The Appellant concluded from these four sales that the assessments of the properties set by MPAC are approximately 100% higher than the sale values.

15The Appellant calculated the proposed value of his property as follows:

1. Over assessment of 100% therefore reduce assessment from $23,000 to $12,000.

2. Adjustment of $3,900 for repairs resulting from water damage reducing $12,000 to $8,100.

3. Adjustment of $2,000 for unusable basement resulting from water damage reducing the $8,100 to $6,100.

4. Adjusting for an additional $5,000 to compensate for the general condition of his home therefore reducing the $6,100 to $1,100.

16Mr. Hayes concludes that the value of his dwelling should be $1,100 plus the value of the vacant lot of $5,000 resulting in a total value of $6,100 for his home.

17Mr. Hayes did admit during cross examination that the water damage in his home was caused by his failure to refill the propane tank resulting in freezing of the pipes and not from flooding caused by rainfall.

18The Appellant requests that his assessment be reduced from $23,000 to $6,100.

Board’s Analysis of Current Value

19The best evidence of current value is the sale of the subject property on or near the valuation date of January 1, 2012. When no such sale occurs, as in this appeal, the Board looks to the recent sale of other similar properties in the vicinity to determine current value.

20The Board accepts the six comparable sales provided by MPAC as the only sales evidence in support of current value with sale dates that are within the shoulder years and sale values that have been properly time adjusted.

21The Board also accepts the four sales provided by the Appellant as similar sales in the vicinity which have not been time adjusted as the time adjustment factors are insignificant to the overall sale value.

22In order to establish the current value of the subject property, the Board utilizes MPAC’s best comparable sale, 8 Redwing Avenue, as well as the Appellant’s four sales, all of which are located within 300 meters of the subject property. Three of the five sale values are $15,000 while the fourth is $16,000 and the fifth is 19,000. Based on the mean of the five sale values the board will set the current value at $16,000.

23Mr. Hayes argued that the value of his property should be adjusted to $6,100 to account for the condition of the home and a land value of $5,000. The Board has reviewed the evidence provided by Mr. Hayes and concludes there is no supporting evidence, other than Mr. Hayes’s opinion, to substantiate a $5,000 adjustment for condition and $5,000 for land value of the subject property. The Board will therefore reject this evidence in establishing the current value.

24Mr. Hayes did provide a contractor estimate to repair the damage caused by the frozen pipe of $3,904, which included the replacement of an area carpet in the basement at a cost of $1,229 that is not part of the structure. The Board will accept the portion of the contractor’s estimate for work related to the structure and therefore make a further adjustment to current value of $2,675, leading to a current value of $13,325.

25The Board finds that the current value of the subject property is $13,325.

Board’s Analysis of Equity

26Section 44.(3)(b) directs that after determining current value, the Board shall 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”.

27The ASR of a sample of sold properties is a tool often used to determine if a property in the vicinity is assessed below its current value. If other properties are assessed below their current value, then a reduction in the assessment of the subject property to below current value is considered to make an assessment equitable with the assessments of similar lands in the vicinity. The ASR is determined by dividing the assessment as returned by the time adjusted sale price.

28Mr. Spiess presented an equity analysis of 32 residential sales that occurred from January 1, 2013 to January 1, 2017, all located within 2 kilometres of the subject property. Those sales had a median ASR of 1.04 and a coefficient of dispersion of 31.2. Mr. Spiess submits that MPAC standards indicate that for residential property, the median ASR should fall between 0.95 and 1.05. If the median ratio falls within this range, this reveals that the current value assessments are reflective of sales prices in the vicinity and therefore no further adjustment is required.

29The Appellant provided four sales of properties in his vicinity showing that the assessments were some 100% higher than the sale value. The Board considers this sample to be far too small to make an equity adjustment.

30The best evidence on equity is the time adjusted sale and assessment evidence of the 32 properties presented by MPAC indicating a median ASR of 1.04. Based on MPAC’s equity study, the Board will make no further adjustment to the current value of the subject property in order to make the assessment equitable with the assessment of other property in the vicinity.

CONCLUSION

31Based on all of the evidence, the Board reduces the current value assessment of the subject property from the returned value of $23,000 to $ 13,325 for the 2017 and 2018 taxation years.