Elizabeth Felicity Eccleton v. Municipal Property Assessment Corporation, 2018 CanLII 67791

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: July 16, 2018 FILE NO.: WR 153292

Assessed Person(s): Elizabeth Felicity Eccleton Appellant(s): Elizabeth Felicity Eccleton Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 09 Respondent(s): City of Toronto Property Location(s): 14 Kings Lynn Road Municipality(ies): City of Toronto Roll Number(s): 1919-011-340-01700-0000 Appeal Number(s): 3233291 and 3299302 Taxation Year(s): 2017 and 2018 Hearing Event No.: 696264 Legislative Authority: Section 40 of the Assessment Act, R.S.O. 1990, c. A.31, as amended Heard: May 15, 2018 in Toronto, Ontario

APPEARANCES:

Parties	Representative
Elizabeth Felicity Eccleton	J. Peter Eccleton
MPAC	Maria Cheung
City of Toronto	No one appeared

MEMORANDUM OF ORAL DECISION DELIVERED BY SUBUOLA AWOLERI ON MAY 15, 2018

INTRODUCTION

1The subject property is a single-family detached dwelling (not on water) built in 1933, with an effective year built of 1970 and construction quality of 7.0. It has a lot with 40 feet of effective frontage, 125 feet of effective depth and an effective site area of 0.11 acres with a building total area of 2,161 square feet (“sq. ft.”). The basement area is 1,158 sq. ft. of which 800 sq. ft. is finished. The subject property was renovated in 1989, and was given a renovation code “B” by MPAC.

2For the 2017 taxation year, the current value assessment (“CVA”) was returned at $1,457,000. Maria Cheung, MPAC’s assessor requested that the Board confirm the assessment as returned since her opinion of value with a further downward adjustment for equity resulting in a current value of $1,499,434 is higher than the returned CVA.

3Peter Eccleton, representing Elizabeth Felicity Eccleton (the “Appellant”) submits that the returned assessment is too high and the correct current value of the subject property should be either $1,165,600 or $1,264,000.

ISSUES

4The 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 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 $1,532,000 (rounded).

6The Board determines that a further downward adjustment to the current value to $1,454,000 (rounded) is required to ensure that the assessment of the subject property is equitable with the assessments of similar lands in the vicinity.

7The Board reduces the returned assessment from $1,457,000 to $1,454,000 (rounded) 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.” That 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 the Act.

9Section 19.2(1) of the Act prescribes the valuation days, which provides:

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.

10Section 40.(17) of the Act places “the burden of proof as to the correctness of current value on MPAC.”

MPAC’s Evidence

11Ms. Cheung presented the Board with four comparable property sales in the same homogenous neighbourhood as the subject property. She testified that property Sale 4 is superior to the subject property and is located further north of the subject property and not in the subject property’s immediate neighbourhood. She submits that property Sales 1, 2 and 3 are the most comparable to the subject property, in terms of location, lot and building sizes and quality of construction. Details of the four comparable property sales are summarized in Table 1 below:

Table 1

Address	Assess-ment ($)	Sale Date / Sale Amt. ($)	Time / Adjusted Sale ($)	Building/Size ("sq. ft.")	Lot Size ("A")	Year Built/ Effective Year Built	Construction Quality	Sale per sq. ft. Time Adjusted Sale ("TAS") (amt.)
Subject Property 14 Kings Lynn Road	1,457,000	N/A	N/A	2,161	0.11	1933/1970	7.0	N/A
Sale 1 15 Kingsmill Road	1,537,000	May 2015 (1,525,000)	1,657,647	2,222	0.13	1929/1972	7.0	746.02
Sale 2 16 Kingsmill Road	1,505,000	Jan. 2016 (1,575,000)	1,566,642	2,323	0.11	1933/1985	7.0	674.40
Sale 3 14 Kingsmill Road	1,484,000	July 2016 (1,650,000)	1,542,990	1,996	0.11	1916/1980	7.0	773.04
Sale 4 10 Kings Garden Road	1,537,000	July 2016 (1,820,000)	1,708,835	2,248	0.12	1943/1982	7.0	760.15

12Ms. Cheung provided the Board with an opinion of value based on the TAS value per square foot of the property Sales 1, 2 and 3. She submits that the average TAS value per sq. ft. for these three property sales is $731.15 and applying this to the subject property’s building total area (“BTA”) provides a current value of $1,580,015. The median TAS value per square foot is $746.02 and applying this to the BTA of the subject property provides a current value of $1,612,149. She concludes that her opinion of value for the subject property is $1,580,000 (rounded).

Appellant’s Evidence

13Mr. Eccleton commenced his evidence by stating that the three comparable property sales, which MPAC used to establish its opinion of value, are not comparable to the subject property since they are not on the same street as the subject property and not exposed to the same “nuisance” as the subject property. He testified that the properties on Kingsmill Road which MPAC used as comparable property sales are more superior to properties on Kings Lynn Road, where the subject property is located. He further added that Kingsmill Road has a sidewalk on both sides of the road and at the end of this road there is a commercial property, an accounting firm and insurance brokerage firm, which is not noisy. However, on Kings Lynn Road, there are no sidewalks, at the end of the road there is a Church with a school and there is also a music school. Mr. Eccleton argues that all these create traffic and noise, which impacts the enjoyment of the subject property and ultimately its market value.

14Mr. Eccleton further testified that MPAC’s property Sales 1, 2 and 3 are located further away from the subway line, while the subject property is approximately 100 – 110 feet from the subway line and it is impacted by the vibration and noise from the subway. To corroborate his evidence, he presented a notice provided by the Toronto Transit Commission (“TTC”) in the form of Transit News titled: “TTC Subway Noise and Vibration Measurements Prince Edward Drive N. and Kings Lynn Road”. This notice advised residents that TTC consultants will be performing noise and vibration measurements by placing sensors on the front lawns of various properties including the subject property from October 27 – October 28, 2013. He further presented a graph provided by the TTC which showed maximum vibration (acceleration) levels with distance from the subway. He testifies that this graph shows the level of noise from the subway and that subway noise and vibrations can be felt in the subject property.

15Mr. Eccleton also testified that the properties closest to the subject property specifically 8,10 and 12 Kings Lynn Road are impacted by various location and site features which he termed “nuisances” and thus have corresponding adjustments to their assessed value. He testified that 8 Kings Lynn Road has a 26% adjustment for abutting a place of worship, a transformer station and proximity to a commercial property, 10 Kings Lynn Road has a 20% adjustment for abutting a transformer station and 12 Kings Lynn Road has a 21% adjustment for proximity to a transformer station and for quality. He argues that the subject property is also impacted by these location and site features but does not benefit from any adjustment. He submits that these adjustments are not explicitly for subway noise and vibrations probably because these properties have received enough adjustments from MPAC. In the same vein, he argues that 8, 9, 10 and 12 Kings Lynn Road are not affected by the subway noise and vibration since these properties are newer than the subject property and were built after the subway line was constructed and have modern noise abatement foundations.

16He further testified that the best comparable property to the subject property is 9 Kings Lynn Road. He submits that this property sold in July 2016 for $1,339,000 and it was assessed at $1,522,000, following a 10% negative adjustment for abutting a multi-residential and commercial property. He further submits that this sale is 20% less than the assessed value. He argues that the subject property is also impacted by the same nuisance as 9 Kings Lynn Road and MPAC provided no corresponding adjustment.

17Mr. Eccleton concluded his evidence by stating that since 9 Kings Lynn Road sold for 20% less than the MPAC assessed value and the subject property is also impacted by the same nuisance as this property, the subject property should also receive 20% adjustment to either its returned assessed value of $1,457,000 or MPAC’s opinion of value of $1,580,000. This provides a current value of either $1,165,600 or $1,264,000 respectively.

Current Value - Analysis

18The 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 recent sale of other similar properties in the vicinity to determine current value. The Board prefers sales of comparable properties within 12 months on either side of the valuation date of January 1, 2016, although the Board can also go as far back as 18 months on either side of the valuation date of January 1, 2016. The caution being that the further a sale is from the valuation date, the less likely it reflects the market value on the valuation date.

19The Board shall provide its findings on the issue of the adjustments used by Mr. Eccleton in arriving at the current value as this may have an impact in the determination of the correct current value of the subject property.

Location and Site Features

20Mr. Eccleton testified that the subject property is located approximately 100 - 110 feet away from the subway line and as a result it is impacted by the subway noise vibrations. In his testimony he admitted that the properties closest to the subway lines, 8, 9, 10 and 12 Kings Lynn Road do not have an adjustment in this regard, and speculates that it may be due to the fact that MPAC had already provided these properties with enough adjustments. In the Table 3, of Exhibit 2, Mr. Eccleton provides the Board with the various location and site features that impacts these properties such as abutting or being in proximity to a place of worship, transformer station, multi-residential and commercial property. The subject property’s profile which Mr. Eccleton admitted as being an accurate description of the subject property does not reveal that the subject abuts or is in proximity to these elements. Ms. Cheung further confirmed that the subject property and properties directly after it do not have these adjustments as they are not abutting or in proximity to these elements. There is no evidence before the Board that the subject property qualifies for these adjustments. Consequently, the Board cannot provide any adjustment to the current value of the subject property as it is not abutting or in proximity to these elements as seen in the map provided in MPAC’s evidence.

21Mr. Eccleton presented a graph provided by TTC which showed maximum vibration (acceleration) levels with distance from the subway. This graph had various numbers which stated the octave band vibration levels with maximum vibration (acceleration) levels distance from the subway. Mr. Eccleton could not testify before the Board on what these numbers represent. His conclusion from this graph was that the subject property is impacted by the noise and vibrations from the subway. The author of this document was not available for cross-examination by MPAC. The Appellant did not provide the Board with any market evidence to quantify the impact of the noise and vibrations. Mr. Eccleton in his evidence did not quantify this impact (if any) and his adjustment to the current value of the subject property was based on the sale of 9 Kings Lynn Road. The Board cannot make a determination in this regard as the Board had no evidence to quantify or measure the impact (if any) of the noise and vibration of the subway against the determined current value of the subject property.

Current Value

22In determining the correct current value of the subject property, the Board considered 9 Kings Lynn Road. According to Ms. Cheung, this property was built in 1989; it has a quality class of 7.5, a TAS price of $1,249,287, a building total area of 2,141 sq. ft., and an effect lot size of 0.12 acres. Ms. Cheung testified that she did not use this sale since it has two variables for abutting a multi-residential and commercial property and accordingly, benefits from a 10% negative adjustment. The Board determines that this property sale is relatively comparable with the subject property as it has a similar lot size and a similar building size with the subject property. On MPAC’s map provided in its evidence, this property is located on the opposite side of the street from the subject property. The subject property does not qualify for a 10% negative adjustment; the Board added 10% adjustment to the TAS price of 9 Kings Lynn Road to provide an adjusted price of $1,374,215. This adjusted price was applied to the BTA of 9 Kings Lynn Road to provide a TAS value per sq. ft. of $641.85 per sq. ft.

23The Board also determined that MPAC’s Sale 4 property is not comparable to the subject property as Ms. Cheung testified that it is located further north from the subject property and not in its immediate neighbourhood. MPAC’s Sales 1, 2 and 3 properties are similar to the subject property in terms of lot and building size, quality of construction and structure. Using TAS value per sq. ft. of MPAC’s Sales 1, 2 and 3 and 9 Kings Lynn Road, the average TAS value per square foot is $708.82, which provides a current value of $1,531,760.02. The Board determines that the correct current value of the subject property is $1,532,000 (rounded).

Equity Analysis

24Section 44.(3)(b) mandates and 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.”

25The ASR is a tool often used to determine if a reduction in the assessment below current value is required 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 TAS price.

MPAC’s Evidence

26Ms. Cheung presented an equity analysis of 30 residential sales within 0.35 kilometres of the subject property from January 2015 to December 2016, with a median ASR of 0.949. She submits that the International Association of Assessing Officers’ (“IAAO”) standards state that the median ratio should fall between 0.90 and 1.10. MPAC’s position is that equity is achieved if the median ASR falls between 0.95 – 1.05. She further submits that based on this equity analysis, similar properties in the vicinity have not been assessed at or near their current value and to ensure that equity is achieved under the Act, her opinion of value should be reduced to $1,499,000. She concludes that this amount is higher than the returned CVA; consequently the returned assessed value is correct.

27Mr. Eccleton did not provide any evidence or arguments for equity.

28The best evidence for equity is presented by MPAC as all the three sales MPAC used in its opinion of value are all included in the 30 sales including the Appellant’s best comparable sale 9 Kings Lynn Road. Furthermore, these 30 sales provide a representative sample used to determine if the assessment of the subject property is equitable with the assessment of similar properties in the vicinity.

29The current value determined by the Board is $1,532,000. In order to make this equitable with the assessment of similar properties in the vicinity, the Board applied the determined current value by the median ASR of 0.949 and reduces it to $1,454,000 (rounded).

30The Board determines that the correct current value of the subject property is $1,454,000 (rounded).

CONCLUSION

31Based on all of the evidence, the Board determines that the current value of the subject property for the 2017 and 2018 taxation years to be $1,532,000 (rounded). The Board finds that a further downward adjustment to the current value to $1,454,000 (rounded) is required to ensure that the assessment of the subject property is equitable with the assessments of similar lands in the vicinity.

32The Board reduces the returned assessment from $1,457,000 to $1,454,000 (rounded) for the 2017 and 2018 taxation years.