Laberge v. Municipal Property Assessment Corporation, 2018 CanLII 67818

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: June 20, 2018

FILE NO.: WR 153092

Assessed Person(s): Susan Ruth Laberge, Albert Louis Laberge

Appellant(s): Susan Laberge, Albert Laberge

Respondent(s): Municipal Property Assessment Corporation (“MPAC”), Region 25

Respondent(s): Town of South Bruce Peninsula

Property Location(s): 112 Maple Drive

Municipality(ies): Town of South Bruce Peninsula

Roll Number(s): 4102-540-002-18700-0000

Appeal Number(s): 3251368 and 3313402

Taxation Year(s): 2017 and 2018

Hearing Event No.: 692572

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

Heard: May 2, 2018 in Wiarton, Ontario

APPEARANCES:

Parties	Representative
Susan Laberge	Self-represented
MPAC	Lacey Wyville and Jeff Weiler
Town of South Bruce Peninsula	No one appeared

DECISION OF THE BOARD DELIVERED BY JOANNE LAWS

INTRODUCTION

1This is an appeal of the assessed value of a seasonal cottage located at 112 Maple Drive on Gould Lake in South Bruce Peninsula Town (the “subject property”). Gould Lake is an inland lake on the Bruce Peninsula. The Appellant, Susan Laberge, argues that the assessment for the 2017 and 2018 taxation years should be $187,000 to reflect the correct current value of the subject property in relation to land restrictions and the decreases in assessed value of other properties on Gould Lake.

2Lacey Wyville, representing MPAC, takes the position that sales of similar lands support a current value of $285,000 but was not seeking a value exceeding the assessment as returned of $263,000.

LEGISLATION

3Section 44.(3)(a) of the Assessment Act, R.S.O. 1990, c. A.31 (“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, I must determine what the subject property would have sold for in an arm’s length transaction on the valuation day, set pursuant to s. 19.3 of the Act, which, in this case is January 1, 2016 for the 2017 taxation year.

4Once I have determined the current value, s. 44.(3)(b) requires that I “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 of the assessment.

5In addition to the 2017 taxation year appeal filed by the Appellant, there is a 2018 taxation year appeal before the Board. This is because, pursuant to subsection 44.(26), a 2018 appeal is deemed to have been filed if the 2017 taxation year appeal was “not finally disposed of before March 31, 2018.”

DECISION

6For the reasons stated below and pursuant to s. 44(3)(a) of the Act, I find that the current value of the subject property, as of the January 1, 2016 valuation day, is $253,000. I also find that the evidence does not support a reduction of this value to achieve an equitable assessment, pursuant to s. 44(3)(b) of the Act.

7Accordingly, the assessment of the subject property is reduced, for the 2017 taxation year from $263,000 to $253,000 and, for the 2018 taxation year from $266,000 to $253,000 in the Residential property class.

Increased Assessment for the 2018 Taxation Year

8The subject property was assessed at $263,000 as of the January 1, 2016 valuation day for the 2017 taxation year. The assessment included 648 square feet (“sq ft.”) of building area in a 1.25 storey A-frame cottage and a lot size of 15,132.80 sq. ft. At the Mandatory Meeting, issues arose regarding the correct size of the subject property. On July 21, 2017 Lacey Wyville inspected the subject property and determined the building size is not 684 sq. ft. but 528 sq. ft. and the lot size is not 15,132.80 sq. ft. but 13,682.93 sq. ft. During the inspection she also found that there is a covered, screened deck that had not been included in MPAC’s assessment data.

9After making adjustments for the land, building and covered deck, the net change increased the assessment from $263,000 to $266,000. The parties agree that MPAC sent a Change Notice to the Appellant, increasing the assessment for the 2018 taxation year from $263,000 to $266,000.

10Ms. Laberge objected to the increase on two points. First, she said the cost of the covered deck was $2,300 and she finds it difficult to believe that the net change for the three corrections, two of which are decreases, nets a $3,000 increase to her assessment. I offered Ms. Laberge an opportunity to prepare a more detailed response to the value of the covered deck but she declined. Secondly, Ms. Laberge is concerned that the increase will be retroactive on her taxes because MPAC’s Change Notice not only increased the value for the 2018 taxation year but also indicated an increase to the assessed values as of the January 1, 2012 and January 1, 2016 valuation days. Mr. Weiler and Ms. Wyville, both of whom were representing MPAC at the hearing, assured both me and Ms. Laberge that the notice is for 2018 onwards and is not retroactive.

CURRENT VALUE

11The subject property is a 1.25 storey, A-frame seasonal cottage, built in 1965, with 528 square feet of building area situated on a 13,682.93 sq. ft. lot with 80 feet of waterfront. The topography of the lot between the road and the cottage was described as a cliff or a very steep slope and the cottage sits at the bottom of that steep slope at the water’s edge. Stairs are needed to traverse the cliff to and from the cottage.

12Ms. Laberge argues that the market for her property is limited because 50% of her lot is unusable and there is limited, seasonal access because of the steep slope. In addition, the lot is heavily treed and the un-winterized cottage sits on block piers on a protected shoreline. She submits that the cottage is accessible only five months of the year. With regard to the protected shoreline, she argues that the Ministry of Natural Resources and Forestry and Municipal By-laws restrict the types and extent of renovations and replacements of cottages that are as close to the water’s edge as the subject property. The area for building is restricted compared to a more level lot where more of the lot can be utilized for improvements. In support of the limited market, she testified that the subject property was on the market for two years before she bought it in 2002.

13Ms. Laberge presented a number of assessments for properties on Gould Lake. Those that are similar in age to hers with a similar lot size are assessed for a similar amount as of the January 1, 2016 valuation day. However, this evidence carries little weight in determining current value as these assessments have not been tested in the open market with sales. The best evidence of the current value of a residential property is the sale of that property on or near the valuation day. When that evidence is not available, the sales of similar properties on or near the valuation day are the next best evidence.

14Unfortunately, Ms. Laberge presented no sales evidence of her own. Nor did she present evidence to support how she arrived at the $187,000 value she is seeking.

15Ms. Wyville presented five sales, all located on Chesley Lake, also an inland lake, located south of Gould Lake. She testified there were no sales of comparable properties on Gould Lake. Data describing the topography of the sales’ properties and whether they have basements was not included. MPAC time adjusted its sales to reflect what the sale values may have been on the January 1, 2016 valuation day. A summary of these sales is set out in the chart below.

Address	House Size (sq. ft.)	Year Built	Lot Size (acre)/Effective Waterfront (ft.)	Sale Date	Time-Adjusted Sale Price
subject property	528	1965	0.35/80
42 Islandview Drive	640	1967	0.11/60	July 2017	$253,077
38 Islandview Drive	408	1956	0.11/60	July 2017	$264,561
17 Lake Drive	649	1945	0.19/50	July 2014	$308,393
62 Golf Course Road	716	1955	0.21/60	June 2016	$364,347
23 Lilac Lane	581	1948	0.06/25	October 2015	$242,514

16Ms. Laberge argues that properties on Chesley Lake are not comparable to properties on Gould Lake. She felt Chesley Lake was too far away; MPAC described it as 5 kilometres away however, when she went to view some of MPAC’s sale properties, she found they were 10 to 15 kilometres away. She also argued that Chesley Lake is a superior market to Gould Lake. She testified that Chesley Lake is a unique pocket in the local market in that has experienced an increase in value whereas other areas decreased in value.

17Ms. Laberge presented data that she obtained from MPAC’s website (markettrends.trimap.com) showing that a number of waterfront areas on the Bruce Peninsula decreased in value between 2016 and 2017. The change for waterfront properties on Gould Lake was -3% while the change on Chesley Lake was +5%. She further submits that MPAC advised her they had been speculating property values based on the assumption that cottages like hers will be purchased, razed and replaced however this has not happened. She argues that it likely won’t happen due to the limitations on her property as described above.

18In reviewing the sales’ properties, I find they are all inferior in terms of lot size and waterfront. The third, fourth and fifth sales properties are also inferior in age. However Ms. Wyville testified that the fourth sale, 62 Golf Course Road, which has a larger cottage, has also been ‘updated’. Therefore, she considers 62 Golf Course Road to be superior to the subject property. She also considers 23 Lilac Lane to be ‘substantially’ inferior to the subject property because it has significantly less waterfront (25 feet compared to the subject property’s 80 feet).

19Ms. Wyville’s position is that 17 Lake Drive is the most comparable to the subject property. She testified that the lot is not as steep as the subject property and, based on the time adjusted sale price less her estimated cost of replacing the exterior access stairs at the subject property, she concluded that this sale supports a current value of $285,000.

20I find that 25 Lilac Lane is inferior to the subject property based on building age and amount of waterfront. I further find that 62 Golf Course Road is superior to the subject property based on the building size and the oral testimony that it has been improved.

21I find that the most comparable sales are 42 Islandview Drive, 38 Islandview Drive and 17 Lake Drive. They have similar building areas but less waterfront and smaller lots. However, the lots are likely comparable to the usable lot area of the subject property. There was no evidence regarding the topography, seasonal access and additional areas such as basements for these three sales. They have a time-adjusted sale price range of $253,000 to $308,000 (rounded). I accept Ms. Laberge’s evidence that Chesley Lake is a superior market to Gould Lake. For this reason, I find that it is unlikely that the subject property, with its cliff, limited and seasonal access and location on Gould Lake would sell for more than the lower end of this range in sales. Accordingly, I find that the current value of the subject property for the 2017 and deemed 2018 taxation years is $253,000.

EQUITY

22In determining equity, s. 44.(3)(b) provides that “the Board shall have reference to the value at which similar lands in the vicinity are assessed”.

23MPAC submitted an equity analysis report which looked at the level of assessment of 30 properties with residential components that sold within 8.5 kilometres of the subject property. They found that the median level of assessment was 0.966 of its time adjusted sale price and a coefficient of dispersion of 9.8. I am not convinced that this report is reliable. MPAC used 16 different residential property codes, most of which are not on water, including residential with commercial/industrial units or buildings, freehold townhouses, duplexes and row housing of with three to six units and seven or more units as well as condominiums. A study of seasonal/recreational properties, on water in the vicinity of the subject property would have been material and therefore preferred. These properties were not identified in the study.

24Ms. Laberge quite rightly argues that MPAC’s purpose is to give a fair and accurate assessment so that all properties can be taxed fairly. Her position is that the values of $263,000 and $266,000 are the values of high-demand, luxury homes with larger lots and larger waterfronts and that she has been assessed inequitably in relation to the other properties on Gould Lake.

25She argues that her assessment increased by 33% between the 2012 and 2016 valuation days while other properties on Gould Lake either had no change or were decreased by 2 to 8%. She presented a chart showing the assessment data of 12 other properties on Gould Lake. I note that two properties, 114 Maple Drive and 110 Maple Drive which have similar building sizes but are 10 years older than the subject property experienced similar increases of 33% and 44% respectively. However, six other cottages of a similar age to the subject property experienced single digit decreases. Her undisputed testimony is that MPAC advised her that the assessments of certain older cottages were increased based on the expectation there would be a high demand for waterfront properties and they would be sold as teardowns. She submits that this did not happen and argues that MPAC should not be in the business of speculation.

26I empathize with Ms. Laberge with regard to the large percentage increase of her property assessment. However, her evidence shows that the increase brings the assessed value of her property in line with the assessed values of other similar properties on Gould Lake. Still, I am sure that this is likely not a comfort to Ms. Laberge. In order to make a finding of equity, I find that the best evidence is comparing the assessed values to market sales. No sales were presented for the properties on Gould Lake.

27I was not presented with any evidence that established that assessing the property at its determined current value of $253,000 would be unfair or inequitable. I find that no adjustment is required for the purpose of equity.