Gerard Joseph O’Connor v. Municipal Property Assessment Corporation, 2018 CanLII 65302

Assessment Review Board / Commission de révision de l’évaluation foncière

ISSUE DATE: July 10, 2018

FILE NO.: WR 152342

Assessed Person(s): Gerard Joseph O’Connor, Mary Grace O’Connor

Appellant(s): Gerard Joseph O’Connor, Mary Grace O’Connor

Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 14

Respondent(s): City of Vaughan

Property Location(s): 54 Pennycross Court

Municipality(ies): City of Vaughan

Roll Number(s): 1928-000-300-69631-0000

Appeal Number(s): 3228730 and 3302434 (deemed 2018 appeal)

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

Hearing Event No.: 694965

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

Heard: April 6, 2018 in Maple, Ontario

APPEARANCES:

Parties	Representative
Gerard Joseph O’Connor	Self-represented
MPAC	B. Dhinsa
City of Vaughan	No one appeared

DECISION OF THE BOARD DELIVERED BY ANTHONY LaREGINA

INTRODUCTION

1The subject property is a single-family two-storey detached dwelling located at 54 Pennycross Court in the City of Vaughan. The home was built in 1981 with a total building area of 4,204 square feet (“sq. ft.”) which includes 2,104 sq. ft. on the first floor, 2,100 sq. ft. on the second floor and 2,178 sq. ft. in the basement of which 173 sq. ft. is finished space. The pie shaped lot has 64.33 feet of actual and effective frontage and 152 feet of actual depth and 120 linear feet at the rear resulting in an effective site area of 12,979 sq. ft. The property has a 480 sq. ft. detached garage also built in 1981. The subject lot abuts a golf course and therefore commands an 11% premium in the assessment valuation as compared to properties that don’t abut the golf course. For the 2017 taxation year, the current value assessment was returned at $1,298,000.

2Baljit Dhinsa, the assessor from MPAC, provided the Assessment Review Board (“Board”) with an estimate of current value at $1,563,000 based on five comparable property sales located in the vicinity of the subject property. Ms. Dhinsa presented an equity study with a 1.0 median Assessment to Sales Ratio (“ASR”) making no further equity adjustment. Ms. Dhinsa is not seeking an increase in assessment and therefore requests a confirmation of the returned assessment of $1,298,000.

3Gerard O’Connor, the Appellant, is requesting a reduction in the returned assessment from $1,298,000 to $1,155,200 which represents a negative 11% adjustment for abutting a golf course. Mr. O’Connor submits that even though his property abuts the golf course the adjustment should be backed out because he had insider information on the valuation date of January 1, 2016 that the golf course was going to be sold and developed. Mr. O’Connor submits that if he had attempted to sell his property on the valuation date he would have had to disclose that the lot eventually would not abut the golf course therefore negatively impact the selling price.

4In addition to the 2017 taxation year appeal filed by Mr. O’Connor, there is a 2018 taxation year appeal before me. This is because, pursuant to subsection 44.(26) of the Assessment Act, R.S.O. 1990, c. A.31 (“Act”), a 2018 appeal is deemed to have been filed if the 2017 taxation year appeal was “not finally disposed of before March 31, 2018.

ISSUES

5The issues to be determined are:

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

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

DECISION

6The Board finds the current value of the subject property for the 2017 and 2018 taxation years to be $1,563,383.

7The Board determines that the current value requires no further adjustment in order to make the assessment of subject property equitable with the assessments of similar lands in the vicinity.

8MPAC is not requesting an increase in the assessed value therefore the Board will confirm the assessment of the subject property at $1,298,000 for the 2017 and 2018 taxation years.

REASONS FOR DECISION

Current Value – Evidence and Analysis

9In accordance with s. 44.(3)(a) of the Assessment Act, the first mandate of the Board is to determine “the current value of the land.” Section 1 of the 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.”

10For the 2017 taxation year, 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

11Ms. Dhinsa presented five comparable property sales located in the vicinity of the subject property. The data representing the five properties is displayed below:

	Subject	Sale 1	Sale 2	Sale 3	Sale 4	Sale 5
Address	54 Pennycross Court	146 Kilmuir Gate	66 Firglen Ridge	62 Kilmuir Gate	33 Woodgreen Drive	37 Pennycross Court
Current Value Assessment (“CVA”) $	1,298,000	1,226,000	1,326,000	1,377,000	1,070,000	1,174,000
Time Adjusted Sale (“TAS”) $		1,334,955	1,620,324	1,332,959	1,580,140	1,132,610
Year Built	1981	1985	1980	1985	1981	1982
Quality	7	7	7	7	7	7
Building Area sq. ft.	4,204	3,737	4,262	3,972	3,415	3,499
Site Area acres	0.29	0.23	0.29	0.23	0.30	0.31
Abuts Variable	Golf Course	Gold Course	Golf Course	Golf Course
TASP/S.F. $		357.23	380.18	335.59	462.71	323.70
MPAC Rating		Inferior	Relatively Comparable	Inferior	Inferior	Inferior

12Ms. Dhinsa opined that based on the average time adjusted sale values per square foot of $371.88 for the five sales, MPAC requests that the current value of the subject property should be set at $1,563,383. ($371.88/S.F. x 4,204 S.F.)

13Ms. Dhinsa submitted that based on the sale of 66 Firglen Ridge which she believes is the best comparable the Current Value of the subject property would be $1,598,276. ($380.18/S.F. x 4,204 S.F.)

14Finally, Ms. Dhinsa submits further that if she takes the time adjusted sale value of the most inferior property—37 Pennycross Court which has no abutment to the golf course and 705 sq. ft. smaller building area than the subject property, the current value of the subject property would be $1,360,834. ($323.70/S.F. x 4,204 S.F.)

15Based on the average time adjusted sale value of all five properties, MPAC requests that the current value of the subject property be set at $1,563,383.

16Ms. Dhinsa concludes that based on the assessed value per square foot of the subject property of $308.74 which is even lower than the adjusted sale value of the most inferior comparable property that has no abutment to the golf course MPAC is requesting that the subject property be confirmed at the returned assessment of $1,298,000.

Mr. O’Connor—Appellant’s Position

17Mr. O’Connor clearly stated that the basis of his appeal is specifically related to the locational primary assessment factor (G) abuts Golf Course and that all other factors relative to his property including lot dimensions, living area, property age and quality of constructions are accepted without reservation.

18Mr. O’Connor served on the Board of Directors for the Toronto Region Board of Trade which is the owner of The Country Club Golf Club (“The Country Club”) from 2006 to 2010. During the same period he was a member of the Governance and Audit committees and still holds possession of significant documents relating to the sale process of The Country Club.

19Although Mr. O’Connor’s term was terminated in 2010, he maintained personal contact with current insiders and therefore was privy to insider information relating to the sale of The Country Club to a third party for development purposes.

20Based on the insider information, Mr. O’Connor was aware that negotiations between the Toronto Region Board of Trade and a third party were actively ongoing on January 1, 2016, the valuation date, which ultimately resulted in a sale of the golf course.

21For the above reasons, Mr. O’Connor submits that MPAC could not possibly have based their valuation of the golf course on material changes governing the golf course sale as the information relating to the sale was not public at that time.

22Mr. O’Connor further submits that based on his access to insider information, in the event he wished to list his property, he could not do so as a property abutting the golf course as he could not provide warranties and representation to a potential purchaser that the property would continue to abut the golf course after the sale.

23Mr. O’Connor therefore concludes that the deletion of “abutting a golf course” locational influence would reduce the property market value on the valuation date even though the golf course still exists to this date.

24Mr. O’Connor therefore requests that only for the valuation of his property the abutting golf course 11% positive adjustment should be deleted from the returned value of $1,298,000.

25Mr. O’Connor therefore requests that the returned assessment for the 2017 to 2020 taxation year should be reduced from $1,298,000 to $1,155,220.

Board’s Analysis of Current Value

26The best evidence of current value is the sale of the subject property on or near the valuation date of January 1, 2016. When no such sale occurs, as in this appeal, the Board looks to the sale of other similar properties in the vicinity which occurred close to the valuation day in order to determine current value.

27The Board accepts the five comparable properties submitted by MPAC because the sales fall within the shoulder years and the sale values are time adjusted to reflect a January 1, 2016 valuation day. In addition, these properties are relatively similar and located in the same vicinity as the subject property.

28Mr. O’Connor did not introduce comparable property sales in support of current value.

29The Board is in agreement with MPAC that based on the median adjusted sale value per square foot of the five comparable properties, the current value of the subject property is $1,563,383.

30The fact that Mr. O’Connor had inside information regarding the sale of the golf course had no bearing on the likely amount the property would have sold for and is therefore a hypothetical argument as Mr. O’Connor has never listed his home and according to his evidence has no intention of doing so. As a member of the Country Club, Mr. O’Connor admits he continues to enjoy the use of the back yard entrance to the golf course and therefore should continue to be assessed on the basis that his property abuts the golf course. According to Mr. O’Connor’s evidence, the development has yet to receive approvals further supporting the notion that his property will continue to abut the golf course for at least the current cycle.

31Ms. Dhinsa also demonstrated in her evidence that based on the time adjusted sale value per square foot of the most inferior property—37 Pennycross Court located on the same street as the subject property not abutting the golf course resulted in a current value of the subject property of $1,360,834. This further demonstrates that the returned value of the subject property is very reasonable and the reduction of 11% is not justified or fair to the other ratepayers.

Board’s Analysis of Equity

32Section 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.”

33The 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 any other property is assessed below its current value, a reduction in the assessment below current value is required to make the 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.

34Ms. Dhinsa presented an equity analysis of 30 residential sales that occurred from January 1, 2015 to December 31, 2016, all located within 5 kilometre of the subject property, resulting in a median ASR of 1.0. Mr. De Sousa 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 CVAs are reflective of sales prices in the vicinity and therefore no further adjustment is required. In this case the median ASR falls inside of the range at 1.0 therefore, Ms. Dhinsa has recommended no adjustment to the current value.

35Mr. O’Connor provided no evidence in support of an equity argument.

36The best evidence in relation to equity is the sale and assessment evidence of 30 properties presented by MPAC indicating a median ASR of 1.0. Based on MPAC’s equity study, the Board finds that no further adjustment to the current value of the subject property at $1,563,383 is required in order to ensure it is equitable with the assessment of other property in the vicinity.

CONCLUSION

37MPAC is required to serve adequate notice of its intention to seek a higher assessment pursuant to Rule 40 of the Board’s Rules of Practice and Procedure. MPAC did not do so therefore the assessment will not be increased. The Board confirms the assessment of the subject property of $1,298,000 for the 2017 and 2018 taxation year.