Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: July 04, 2018

FILE NO.: WR 153143

Assessed Person(s): Wayne Alexander Copeland

Appellant(s): Wayne Alexander Copeland

Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 23

Respondent(s): City of London

Property Location(s): 330 Ridout Street North, Suite 1803

Municipality(ies): City of London

Roll Number(s): 3936-060-050-04773-0000

Appeal Number(s): 3233502 and 3320065 (deemed 2018 appeal)

Taxation Year(s): 2017 and 2018 (deemed appeal)

Hearing Event No. 697296

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

Heard: May 07, 2018 by telephone conference call

APPEARANCES:

Parties	Representative
Wayne Alexander Copeland	Self-represented
MPAC	Jennifer Mills
City of London	No one appeared

MEMORANDUM OF ORAL DECISION OF THE BOARD DELIVERED BY MARCELLE BOURASSA

BACKGROUND

1These appeals were heard on May 7, 2018 by way of a hearing conducted by telephone conference call. At the conclusion of the hearing, oral reasons for decision were delivered. Mr. Copeland requested a written decision.

2Wayne Alexander Copeland (“the Appellant”) is the owner of condominium Suite 103 in The Renaissance II building (the “subject property”) located at 330 Ridout Street North in the City of London. The subject property is a 1,303 sq. ft. suite with two bedrooms and two bathrooms. Occupancy of the condominium building began in 2012 and Mr. Copeland purchased the subject property from the builder on November 4, 2013 for $298,519.

3For the 2017 taxation year under appeal, MPAC returned the assessment for the subject property at $350,000.

4Mr. Copeland has appealed the assessment for the 2017 taxation year to the Assessment Review Board (the “Board”), pursuant to s. 40 of the Assessment Act (“Act”). It is the Appellant’s position that the subject property is assessed too high considering his purchase price and the average increase in housing prices in London. Its assessed value has increased by $52,000 or 17% from what he paid in November 2013. It is his opinion that his property has a current value of about $325,000 to $330,000 on the January 1, 2016 valuation date. It is his further opinion that it should be assessed lower at about $320,000 to $325,000 in comparison to other units in the condominium building.

5Pursuant to the Act, the burden of proof as to the correctness of the current value of the subject property rests with MPAC. For the period of 2017 to 2020, the subject property is valued as of January 1, 2016. MPAC’s representative, Jennifer Mills, estimates the current value of the subject property to be $350,000 based on the direct comparison approach. She also determined that that equity adjustment is not required. It is her positon that the assessment as returned of $350,000 should be confirmed for the 2017 and deemed 2018 taxation years.

ISSUES

6The issue(s) to be determined on this appeal are:

1. What is the correct current value of the subject property as of the January 1, 2016 valuation date;

2. Whether there should be an equitable reduction of the current value pursuant to s. 44(3)(b) of the Act, and, if so, what the amount of this reduction should be.

DECISION

7The Board finds that the current value of the subject property, as of the January 1, 2016 valuation date, is $337,000. Furthermore, the Board finds that the evidence before it does not support the conclusion that an equitable adjustment is required under s. 44.(3)(b )of the Act.

8Therefore, the assessment of the subject property is reduced from $350,000 to $337,000 for the 2017 and deemed 2018 taxation years.

RELEVANT LEGISLATION

9Section 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.

10Section 19(1) of the Act states:

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

11Section 19.2(1) 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 the period consisting of the four taxation years from 2013 to 2016, land is valued as of January 1, 2012.

4. For the period consisting of the four taxation years from 2017 to 2020, land is valued as of January 1, 2016.

5. After 2020, for each subsequent period consisting of four consecutive taxation years, land is valued as of January 1 of the year that precedes the period by two years.

12Section 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.

13Section 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.

Analysis and Findings

What is the correct current value of the property as of the January 1, 2016 valuation date?

MPAC’S Evidence

14Ms. Mills relies on a Valuation Report and provided information on the subject property and the sales of six residential condominium properties. All are re-sales and all located within The Renaissance II. All of the sales comparables have two bedrooms, two bathrooms and similar square footage to the subject property. She states that the sales have not been time adjusted.

15Ms. Mills estimates the current value of the subject property to be $350,000 based on the direct comparison approach and this value was generated using MPAC’s mass appraisal method which is based on a statistical multiple regression analysis

Appellant’s Evidence

16Mr. Copeland expressed his concern that the subject property is assessed too high considering the purchase price of $298,519 and the average increase in housing prices in London. The subject property’s assessed value has increased by $52,000 or 17% from what he paid in November 2013.

17Mr. Copeland referred to the sales of suites 1804 and 705 located within The Renaissance II. Suite 1804 is located on the same floor as the subject property and is larger at 1,507 sq. ft. It sold for $400,000 in October 2015 (and is assessed lower than its sale price at $385,000). Suite 705 is also larger at 1,455 sq. ft. and sold for $360,000 in March 2015 (and is assessed lower than its sale price at $359,000).

18It is his opinion that his property had a current value of about $325,000 to $330,000 on the January 1, 2016 valuation date.

Board’s Analysis and Findings

19Under s. 44.(3)(a) of the Act, the Board must first determine “the current value of the land.” The best evidence the Board can receive of current value is an arm’s length and market-tested sale of the property on the valuation date or close to it. There was a sale in November 2013 but the Board did not consider it as it is considered too far removed from the January 1, 2016 valuation date. It was also a builder’s sale.

20The next best measure of current value is arm’s length and market-tested sales of comparable properties located nearby, as close as possible to the legislated valuation date of January 1, 2016.

21To enable an estimate of value for the property to be derived from suggested comparable properties, there must be sufficient elements of similarity, in terms of physical factors such as building area, land area, land frontage, age of construction, physical condition, etc. so as to enable a direct comparison to be made.

22The Board has considered the eight properties with sales all located in The Renaissance II condominium building. All have two bedrooms and two full bathrooms. They range in square footage from 1,180 sq. ft. to 1,507 sq. ft. The median square footage for the eight sales properties is 1,317 sq. ft. as compared to the subject property at 1,303 sq. ft. The Board finds the eight properties to be reasonably comparable to the subject property.

23Actual sale prices range from $303,000 to $400,000 during the period of April 2014 to October 2015. According to Ms. Mills, they are all re-sales.

24The median sale price per sq. ft. is $258.97. Applying this value to the subject property’s square footage results in a value of $337,437 or $337,000 rounded.

25The Board sets the current value as of January 1, 2016 valuation date at $337,000.

Whether there should be an equitable reduction of the current value pursuant to s. 44.(3)(b) of the Act, and, if so, what should the amount of this reduction be

MPAC’s Evidence

26Ms. Mills relies on a median Assessment to Sale Ratio (ASR) of 1.01 based on the same sample of eight arm’s length sales of properties in the same condominium building as the subject property. It is her positon that an equity adjustment is not required.

27She concludes that the assessment as returned of $350,000 should be confirmed for the 2017 and deemed 2018 taxation years.

Appellant’s Evidence

28Mr. Copeland is of the opinion that the subject property is assessed too high. He proposes a lower assessed value in the range of $320,000 to $325,000. He referenced two neighbouring properties, Suites 1802 and 1804, with assessments of $327,000 and $385,000, respectively that are lower than their sales values. They have ASRs of 0.958 and 0.962, respectively.

Board’s Analysis and Findings

29Section 44.(3)(b) of the Act 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.”

30The purpose of equitable adjustment has been described as the equitable distribution of the tax burden according to the assessed value of property owned by taxpayers as follows by the Ontario Court of Appeal in Empire Realty Co. Ltd. and Assessment Commissioner for Metropolitan Toronto et al., 1968 CanLII 183 (ON CA) at page 2:

A prime objective of municipal taxation is the equitable distribution of the burden according to the value of the property possessed by each ratepayer; in the system prevailing in Ontario, the tax levied on the ratepayer is determined by the a uniform mill rate upon the assessed value of the ratepayer's taxable property set down in the assessment roll. If equity in taxation is to be achieved, it must result from equity in assessment.

31In addressing equity in assessment, the Court, at page 6, also noted that “an assessment made at the actual value of lands and buildings…would be an unequitable assessment if all similar lands in the vicinity were assessed at some percentage of actual value substantially less than one hundred [emphasis added].”

32The term “vicinity” is not defined in the Act, but refers to the appropriate geographical area that will yield a meaningful number of comparables (see Ontario Regional Assessment Commissioner, Region No. 3 v. Graham, 1993 CanLII 8621 (ON CA) at page 6).

33The test set out in s. 44.(3)(b) of the Act, requires that the Board refer to similar lands in the vicinity. Similar property relates to the same general nature and character. Use as a point of similarity, may be, but is not necessarily determinative of similarity. In determining whether other lands are similar, the Ontario Divisional Court, in Municipal Property Assessment Corp. v. Loblaw Properties Ltd., [2017] O.J. No. 1010, 2017 ONSC 1299, 276 A.C.W.S. (3d) 220, 62 M.P.L.R. (5th) 253, 2017 CarswellOnt 2861, applied the decision of the Ontario Divisional Court in Trizec Equities Ltd. v. Ontario (Regional Assessment Commissioner, Region No. 27), [1988] O.J. No. 182, 27 O.A.C. 203, 37 M.P.L.R. 175, 8 A.C.W.S. (3d) 399. The Court stated at paragraph 23:

…All points of comparison must be considered. The Board must make a factual finding based on such a consideration. One point of similarity such as use may be, but is not necessarily, determinative. Some similarities may be overridden by other characteristics and some differences may be subordinated.

34The Assessment to Sale Ratio (“ASR”) analysis of a reasonable sample of sold properties is one method used to determine if properties in the vicinity are assessed below their current value. If other properties are assessed substantially below their current value then a reduction is required to make the assessment of the subject

property equitable with the assessments of similar lands in the vicinity. The ASR is determined by dividing the assessment as returned by the sale price.

35Ms. Mills relies on a median ASR of 1.01 based on the same sample of eight arm’s length sales of properties in the same condominium building as the subject property.

36The Board finds that the median ASR of 1.01 falls within MPAC’s generally acceptable standard of 0.95 and 1.05 required to establish that the level of current values assessments of similar properties is in line with the level of sales prices in the vicinity.

37On the other hand, Mr. Copeland takes the position that the subject property is assessed too high. He proposes a lower assessed value in the range of $320,000 to $325,000. He referenced neighbouring properties, Suites 1802 and 1804, with assessments that are lower than their sales values. They have ASRs of 0.958 and 0.962, respectively.

38The Board prefers MPC’s larger sample of eight sales as opposed to the two neighbouring sales on the 18th floor. In any event, the two neighboring properties both have ASRs that fall within MPAC’s standard of 0.95 and 1.05.

39For these reasons, the Board finds that the evidence before it does not support the conclusion that an equity adjustment is required under s. 44.(3)(b) of the Act.

CONCLUSION

40The Board finds that the current value of the subject property, as of the January 1, 2016 valuation date, is $337,000. Furthermore, the Board finds that the evidence before it does not support the conclusion that an equitable adjustment is required under s. 44.(3)(b) of the Act.

41Therefore, the assessment of the subject property is reduced from $350,000 to $337,000 for the 2017 and deemed 2018 taxation years.

2018 DEEMED APPEAL

42An 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.

43Section 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.