Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE:

July 11, 2018

FILE NO.:

WR 151243

Assessed Person(s):

Nicola Russell, Jomo Russell

Appellant(s):

Nicola Russell, Jomo Russell

Respondent(s):

Municipal Property Assessment Corporation (“MPAC”) Region 15

Respondent(s):

Town of Oakville

Property Location(s):

322 Northwood Drive

Municipality(ies):

Town of Oakville

Roll Number(s):

2401-030-260-21078-0000

Appeal Number(s):

3249955 and 3305497 (deemed 2018 appeal)

Taxation Year(s):

2017 and 2018 (deemed appeal)

Hearing Event No.:

694166

Legislative Authority:

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

Heard:

February 20, 2018 in Oakville, Ontario

APPEARANCES:

Parties

Representative

Nicola Russell, Jomo Russell

Self-represented

MPAC

Terence Johnston

Town of Oakville

Susan Price

DECISION OF THE BOARD DELIVERED BY DAN WEAGANT AND JOANNE LAWS

INTRODUCTION

1This is an appeal of the assessed value of 322 Northwood Drive in the Town of Oakville for the 2017 taxation year. MPAC recommends that the assessment as returned of $947,000 should be reduced to $938,000. The Town of Oakville agrees with this value. The Appellants take the position that the property’s assessment should fall in the range of $840,000 to $875,000 and that there is a systemic problem with the assessment process.

2Section 44.(3)(a) of the Assessment Act (‘Act”) requires the Assessment Review Board (“Board”) to “determine the current value of the land.” Current value is defined in s. 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, we must determine what the property would have sold for in an arm’s length transaction on the valuation day, which, in this case is January 1, 2016 for the 2017 taxation year.

3Once we have determined the current value, s. 44.(3)(b) requires that we “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 (in the current value determined) of the assessment.

DECISION

4We find that the current value of the subject property for the 2017 and 2018 taxation years is $1,023,510 but that it would be inequitable to assess the property at that amount. An equitable assessment is at 92.8% of its current value, or $950,000. However, no one has filed a notice seeking a higher assessment. Therefore, we confirm the $947,000 assessment of the subject property for the 2017 and 2018 taxation years in the Residential property class.

CURRENT VALUE

Valuation Days:

5The Appellants’ position is that something is amiss with MPAC’s assessment program and that their property is overvalued by at least $100,000.

6The Appellants argued that the percentage increase of their property’s assessed value between the January 1, 2012 and the January 1, 2016 valuation days exceeds the increases experienced by other properties on Northwood Drive. They provided a detailed analysis of this argument. In addition, the Appellants submit that MPAC could not show them how it arrived at the initial assessment of $947,000. At the hearing, MPAC was recommending a value of $938,000, based on discussions between the parties prior to the hearing.

7MPAC argued that the assessment is based on the valuation day for the current cycle and not linked to the value from the previous valuation day. In support of the valuation days being independent of each other, MPAC presented the following cases. In WR 34881 Morrison v. Municipal Property Assessment Corp., Region No. 17, [2004] O.A.R.B.D. No. 518, WM41853 Posivy v. Municipal Property Assessment Corp., Region No. 14, [2005] O.A.R.B.D. No. 462 and 49233 Cooney v. Municipal Property Assessment Corp. Region No. 14, [2006] O.A.R.B.D. No. 140 in which the Board determined that it has no power to address changes in value between valuation days. We agree.

8The valuation day for the 2017 through 2020 taxation years is January 1, 2016 while the valuation day for the previous four years was January 1, 2012. For residential properties the current value is most often determined by the sales comparison method which looks at sales of similar properties on or near that valuation day. Subsection 44.(3) of the Act limits our review to what the property likely would have sold for on the January 1, 2016 valuation day. The assessments on that valuation day reflect the market, as it existed at that point in time. In other words, each valuation day must be addressed on its own market evidence.

9Therefore, the best evidence of the current value of a residential property is the sale of that property on or near the valuation day applicable to the taxation year under appeal. When that evidence is not available, the sales of similar properties on or near the valuation day are the next best evidence.

The Subject Property and Proposed Comparable Sales Properties:

10The subject property, 322 Northwood Drive, is located in the Glen Abbey area of the Town of Oakville and is a two-storey single-family dwelling built in 1990. The building measures 3,306 square feet (sq. ft.) with 1,462 sq. ft. of unfinished basement area and 480 sq. ft. of garage area. The property includes a small outdoor in-ground pool. The last sale of the subject property occurred in 2011.

11The Board was provided with a total of 13 sales that occurred with some proximity to the valuation day. Five of these sales (A, B, K, L and M) were submitted as part of MPAC’s valuation report. The Town of Oakville submitted seven sales (A through G); two of which (sales A and B) were also relied upon by MPAC sales.

12The Appellants submitted sales D, F, G, H, I and J, with F and G having also been cited by the Town.

13The following chart is a summary of the sales provided by the parties and their characteristics:

Suggested Comparable Sales

Address

House Size (sq. ft.)

Lot Size (frontage/ depth)

Effective Year Built

Abuts Green Space

Time Adjusted Sale Price

Subject property

322 Northwood Drive

3306

49/115 ( or 5635 sq, ft,)

1990

Yes

A

282 Northwood Drive

3314

49/115

1991

Yes

$1,065,186

B

306 Northwood Drive

3300

49/115

1991

Yes

$1,019,058

C

274 Northwood Drive

3000

49/114

1990

Yes

$1,009,800

D

326 Northwood Drive

3000

49/115

1990

Yes

$833,280

E

270 Northwood Drive

2909

51/104

1991

Yes

$1,241,460

F

379 Northwood Drive

2636

52/116

1998

Yes

$960,336

G

310 Northwood Drive

2721

49/115

1990

Yes

$846,528

H

1041 Manchester Crescent.

2000 to 2500*

46/124

1968 to 1987*

Yes

$778,800

I

386 Northwood Drive

2933

7459 sq. ft

1986

No

$909,630

J

403 Northwood Drive

2247

6889 sq. ft.

1985

Yes

$814,320

K

1344 Fieldcrest Lane

3190

50/114

1989

No

$1,084,547

L

1371 Fieldcrest Lane

3224

50/130

1990

No

$882,367

M

1415 Fieldcrest Lane

3410

79/127

1989

No

$1,060,505

*The exact square foot area of the building, the quality of construction and the year built were not provided.

14MPAC time adjusted its sales to reflect what the sale values may have been on the January 1, 2016 valuation day. Both the Municipality and the Appellants adopted MPAC’s data and adjusted their sales values as well. However, the Appellants argued that if the sales are close enough to the valuation day, no adjustment should be warranted.

15Initially, MPAC based its current value calculations using the five sales mentioned above. However, MPAC adjusted its calculations at the hearing, excluding Sale A, because, unlike the subject property, the Sale A property building has been renovated and has a finished basement. Based on the remaining four sales MPAC took the position that the current value of the subject property is $1,021,000. MPAC then reduced this value by its equity analysis to $946,000 but recommended a final valuation of $938,000.

16The Appellants submit that all of the sales comparables on their street have finished basements whereas, the subject property does not. They argue that those sales with similar square foot of building space are superior to their property and that the smaller homes are comparable because, with a finished basement, they have more livable space.

17They indicated that Sales D, F, G, I and J are similar to the subject property, being of similar structure, age and location (they are on the same street). The Appellants also submitted Sale H arguing it was similar to the subject property in terms of lot size and that it has an outdoor pool, an unfinished basement and was not recently renovated. Like the subject property, Sale H abuts green space.

18They also submit that a finished basement adds $30,000 to $40,000 to a property’s value. MPAC and the Town agreed that a finished basement adds value but neither provided evidence of what that value might be.

Board’s Analysis:

19The subject property’s pool is very small (11 x 8 feet) and was installed 21 years ago. All other factors being equal, we accept the Appellant’s argument that the pool has little value and find that the subject property would be the same value with or without the subject pool.

20We disregard Sale A. While it is very similar to the subject property in building and lot size, age and location, we accept MPAC and the Appellants’ testimony that it is not directly comparable to the subject property because of renovations and a finished basement.

21We disregard Sales E and I because we believe they are unlike the subject property. Sale E (274 Northwood Drive) is a corner lot and Sale I (386 Northwood Drive) is also a corner lot and it does not abut green space.

22The Appellants submitted Rubino v Toronto (City), 2017 CanLII 36403 (ON OMB) which, in part, defines the term neighbourhood. This decision was submitted in support of including sales a distance from the subject property, in particular, Sale H (1041 Manchester). However, we are disregarding Sale H because there is insufficient data on the building size to make a meaningful comparison to the subject property.

23We disregard Sales J (403 Northwood Drive), F (379 Northwood Drive) and G (310 Northwood Drive) because their building sizes are between 21% and 50% smaller than the subject property, which, in this instance, makes them not directly comparable to the subject property.

24We disregard Sales K, L and M. We find that they are not directly comparable to the subject property because they are located a distance from the subject property and do not abut green space.

25We find that Sales B, C, and D are sufficiently similar to the subject property and are the best evidence of the subject property’s current value. They are all located on Northwood Drive, abut green space and are similar in building size, lot size and age.

26Because these comparable properties are so similar to the subject property, the best method of determining current value is to use the sale value per square foot of building area.

27The square footage of the comparables are the only meaningful difference between them and the subject property. By using a value per square foot, based on these three sales, a reasonable value can be applied to the subject property.

28The time adjusted sale prices per square foot of building area for these three sales range from $277.76 to $336.60. The average is $307.73. The average is preferred over the median because the sample size is small. Applying the average sale price per square foot of building area to the subject property results in a value of $1,023,510.

EQUITY

29We must also consider the assessments of similar properties in the vicinity and determine whether the current value, as established, is inequitable relative to those assessments. If so, the current value should be adjusted to make it equitable, as required by s. 44.(3)(b) of the Act.

30For the purpose of establishing equity, properties do not need to be comparable however they need to be of a similar nature and within a reasonable proximity to the subject property.

31The Appellants’ position is that their property is not equitably assessed in relation to other properties on their street because their assessment increased by 33% between the valuation days while the average increase on the street was 23%.

32MPAC’s equity analysis report looked at the level of assessment of 30 two-storey detached, residential properties with total building areas between 3,100 sq. ft. to 3,400 sq. ft., built between 1988 and 1992, and within 5 kilometres of the subject property that sold in either 2015 or 2016.

33MPAC used an assessment to sale ratio (“ASR”) analysis to determine equity. An ASR analysis is a test of whether the model used to assess certain types of properties is working well, in this case, for residential properties in the vicinity of the subject property. For the purpose of determining equity, properties do not need to be directly comparable however they need to be of a similar nature and within a reasonable proximity to the subject property. The median ASR of the 30 sale properties in this study is 0.928 which indicates that similar properties in the vicinity are assessed lower than their sale prices and an adjustment is warranted.

34Accordingly, we have applied the 0.928 ASR to the current value of $1,023,510 which results in a value of $949,817 or $950,000, rounded.

CONCLUSION

35We find that the current value of the subject property, as of the January 1, 2016 valuation day, is $1,023,510 for the 2017 and deemed 2018 taxation years. However, the evidence shows that this value is inequitable and should be reduced from $1,023,510 to $950,000, rounded.

36This exceeds the assessment as returned of $947,000. Accordingly, we confirm the as returned of $947,000 in the Residential Property Class.

2018 DEEMED APPEAL

37An 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.

38Section 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.