Janevski v. Municipal Property Assessment Corporation, 2018 CanLII 80755

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE:

August 21, 2018

FILE NO.:

WR 154443

Assessed Person(s):

Goran Janevski

Appellant(s):

Goran Janevski

Respondent(s):

Municipal Property Assessment Corporation (“MPAC”),

Region 9

Respondent(s):

City of Toronto

Property Location(s):

111 Fred Young Drive

Municipality(ies):

City of Toronto

Roll Number(s):

1908-011-210-08130-0000

Appeal Number(s):

3270811 and 3297918

Taxation Year(s):

2017 and 2018

Hearing Event No.

700981

Legislative Authority:

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

Heard:

July 10, 2018 in Toronto, Ontario

APPEARANCES:

Parties

Representative

Goran Janevski

Self-represented

MPAC

Chantelle MacMillan

City of Toronto

No one appeared

DECISION OF THE BOARD DELIVERED BY JENNIFER GRIFFITH

Background

1Goran Janevski (“Appellant”) is the owner of 111 Fred Young Drive (the “Subject Property”), which is located in the City of Toronto.

2Pursuant to the provisions of the Assessment Act, R.S.O. 1990, c. A.31 (the “Act“), the assessment of land shall be based on its current value. The Act also provides that, for the 2017 to 2020 taxation years, MPAC is required to assess this value as of the valuation date, January 1, 2016 (“current value”).

3MPAC has assessed the current value of the Subject Property at $904,000 for the 2017 and 2018 taxation years.

4The Appellant has filed an appeal for taxation year 2017 and a deemed 2018 appeal with the Assessment Review Board (the “Board”), pursuant to s. 40 of the Act. It is his position that MPAC’s assessment of current value is too high and that the correct current value is $791,000 (rounded). At this hearing, MPAC takes the position that its assessed value should be confirmed at $904,000.

5Pursuant to s. 40(11) of the Act, the City of Toronto is a party to this proceeding. However, no one appeared at the hearing on its behalf.

6Section 44(3)(b) of the Act, directs the Board to reduce the current value of the Subject Property if similar lands in the vicinity have been assessed at a lower value (“equitable reduction”). The purpose of this provision is to fairly distribute the municipal tax burden according to the value of the property possessed by each ratepayer. MPAC takes the position that an equitable reduction is not required. The Appellant asserts no position on equity. Therefore, equity is not at issue at this hearing.

7At the completion of the hearing, the Board reserved its decision. For the reasons that follow, the Board finds that the current value for 2017 to 2018 tax years is $851,000. Pursuant to s. 44.(3)(b) of the Act, an equitable reduction of this value is not required.

RELEVANT LEGISLATION

8Relevant sections of the Act are as follows:

1. “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.

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

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.

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.

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.

ISSUES

9The issue(s) to be determined on this appeal are:

1. What is the correct current value of the Subject Property for the taxation years 2017 and 2018?

Description of the Subject Property

10The Subject Property is described as a two-storey, single family detached dwelling, located at 111 Fred Young Drive, in the City of Toronto. The Subject Property was built in 2010, with a total building area of 2,841 square feet (“sq. ft.”), and a total lot size of 0.13 acres.

DISCUSSION, ANALYSIS AND FINDINGS

Issue No. 1: What is the correct current value of the Subject Property for the taxation years 2017 to 2018.

MPAC’S Evidence

11Chantelle MacMillan is the Advocate for MPAC and Leo Ferreira is the Witness for MPAC. Ms. MacMillan called on Mr. Ferreira and he gave an overview of his related work experience.

12Mr. Ferreira states that he is a Property Valuation Analyst with MPAC and has been working for almost 21 years in the areas of assessment and valuation. He states that amongst other duties, he reviews and responds to Request for Reconsideration, charity work, and appears before the Board in the role as a Valuation Analyst presenting evidence on behalf of MPAC. Mr. Ferreira presented a Valuation Report, dated March 16, 2018 (“Valuation Report”) which he prepared and testifies to the information contained in the report.

13Mr. Ferreira states that the Subject Property was inspected on February 27, 2018. He testifies that during the inspection he reviewed and confirmed the building measurement, and verified that MPAC’s data was current and complete. He also testifies that the returned assessed value of $904,000 includes a negative adjustment of $60,000 for nuisances associated with the neighbourhood of Oakdale Valley where the Subject Property is located.

14Mr. Ferreira states that the Subject Property was purchased from the builder (The Conservatory Group), who had listed the Subject Property for sale in the Home section of the Toronto Star on May 2, 2015. He states that an Agreement of Purchase and Sale was signed on May 12, 2015, and that the sale closed on November 30, 2015, for a sale price of $851,000. Mr. Ferreira submits that the sale price of $851,000, when it was time-adjusted to the valuation date of January 1, 2016 it results in a value of $914,000.

15Mr. Ferreira presents a sales analysis of four suggested comparable properties sold in 2015 and 2016, on the same street as the Subject Property. They are located at 78 Fred Young Drive; 59 Fred Young Drive; 155 Fred Young Drive; and 94 Fred Young Drive. The analysis contains both actual sales and time-adjusted sale prices.

16The analysis shows that these suggested comparable properties are superior to the Subject Property with significantly larger total building area (671 sq. ft. larger). The analysis shows that the actual sale price ranges from $903,500 to $1,048,000; and that the time adjusted sale price ranges from $891,299 to $1,008,133.

17Mr. Ferreira presents another sales analysis of two suggested comparable properties sold in 2014, on the same street as the Subject Property. They are located at 90 Fred Young Drive, sold for $782,000; and at 140 Fred Young Drive, sold for $777,500. Mr. Ferreira time-adjusted these two sale prices to the valuation date of January 1, 2016 and it reflects a time adjusted sale price of $894,682 and $895,132 respectively. These two suggested comparable properties are relatively comparable to the subject property.

MPAC’s Submissions

18Relying on its evidence, MPAC submits that the correct current value for the Subject Property for taxation years 2017 to 2018 is $904,000. MPAC argues that this value is supported by the six suggested comparable properties presented into evidence.

19Finally, MPAC cited the following two cases to assist the Board in its determination of current value:

I. Roitman v. Municipal Property Assessment Corp. Region No. 9, [2013] O.A.R.B.D. No. 138 (“Roitman”); and

II. Howard v. Municipal Property Assessment Corp. Region No. 9, [2004] O.A.R.B.D. No. 446 (“Howard”).

Appellant’s Evidence

20The Appellant, Mr. Janevski, represents himself. The Appellant states that the Subject Property was listed for sale in the Home section of the Toronto Star newspaper which he saw on May 2, 2015. The Subject Property was listed for $851,000 with a three-year mortgage at zero per cent interest rate and no other incentives.

21The Appellant presented copies of the Agreement of Purchase and Sale for the Subject Property and testifies that he made an offer of purchase on May 6, 2015 and requested a closing date for the end of November. The builder returned a counter offer with the same sale price of $851,000, without the three-year mortgage at zero per cent interest rate and without any other incentives. The Appellant accepted the counter offer and signed the Agreement of Purchase and Sale on May 12, 2015. The Appellant believes that the long closing date of November 30, 2015 costs him approximately $43,716 for losing the three-year mortgage and at zero per cent interest rate. He believes that the builder was looking for an earlier closing date of June or July.

22The Appellant presents a copy of a December 2, 2016 news release from the Toronto Real Estate Board, which he states indicates that the prices of single family detached homes in Toronto declined by seven per cent between November and December 2016. Based on this news release the Appellant is of the view that the sale price of the Subject Property should be reduced by seven per cent to a value of $791,430.

23The Appellant testifies that the Subject Property’s neighbourhood is negatively impacted with crimes and that the situation is getting worse. He is of the view that home values in the neighbourhood would depreciate.

Appellant’s Submissions

24The Appellant submits that the Subject Property was on the open market for five years. He also submits that when he purchased the Subject Property he was not advised that abutting a golf course would impact the assessed value by four per cent.

25Relying on his evidence, the Appellant submits that the correct current value for taxation years 2017 to 2018 is $791,430.

Findings on Current Value

26Under 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.

27Based on the evidence presented in support of current value, the Board finds the sale of the Subject Property on November 30, 2015 for $851,000 to be the best evidence of current value. The Board notes that although the Subject Property was purchased from the builder, it was advertised for sale in the Home section of the Toronto Star newspaper and was publicly available to potential buyers. The Appellant also stated that the property was on the market for approximately five years, and MPAC did not refute the evidence.

28On the contrary, MPAC presented the time adjusted sale price of $914,000 for the Subject Property, which the Board rejects. The Board finds that although the Agreement of Purchase and sale was signed on May 12, 2015, the purchase was only finalized on November 30, 2015. Therefore, the Board accepts the actual sales price of the Subject Property, because it occurred within a reasonable time period of the valuation date of January 1, 2016. Therefore, there is no need to speculate as to what the Subject Property would sell for as of the valuation date of January 1, 2016, when the evidence is that it actually sold for $851,000 approximately one month earlier.

29In regard to builder’s sales, the Board generally agrees with the findings of Roitman that:

“Unless there is no other evidence available, the Board is generally reluctant to accept builder’s sales as indicators of current value. Arguments against the use of builder’s sales are plentiful; those sales are often distorted by builder’s incentives such as low rate of financing, upgrades, appliance packages and other inducements (for instance, in this case the Appellant stated that the subject property was a model suite and the purchase included the furnishings). This result in too many uncertainties about the total consideration paid; and the ability to accurately identify exactly how much money was paid to complete the purchase. Another concern with builder’s sale is that there is often a significant time lapse between the entering into the original agreement of purchase and the sale closing”.

30However, in this case, the Subject Property was advertised in the Toronto Star and publically available to potential buyers. The sale price of $851,000 did not include any incentives and financing. The property was on the market for approximately five years; and as stated above, MPAC time adjusted the sale price of $851,000 to the valuation date of January 1, 2016 to reflect a time adjusted sale price of $914,000, which would suggest that MPAC recognizes that the sale price of the Subject Property is an open market sale.

31The Board also rejects MPAC’s four suggested comparable properties sold in 2015 and 2016, because these four suggested comparable properties are superior to the Subject Property and are 671 sq. ft. larger. In regard to the two suggested comparable properties sold in 2014, the Board also rejects them, because the sales are too far removed from the valuation date of January 1, 2016, to provide any meaningful test of current value.

32In regard to the issue of crimes in the neighbourhood, the Board accepts MPAC’s evidence that the assessed value $904,000 for the Subject Property includes a neighbourhood adjustment of negative $60,000. On the contrary, the Appellant presented no quantifiable evidence to show that the negative adjustment of $60,000 should be higher. The Board also agrees with the findings in Howard that “The prospect of detrimental factors such as crime or the existence of undesired facilities for the Regent Park residents will be, ultimately, reflected in the sale of properties within the same homogeneous neighbourhood”.

DECISION

33The current value of the Subject Property is $851,000 for the 2017 to 2018 taxation years. The assessment of the Subject Property is therefore reduced from $904,000 to $851,000 for the 2017 and 2018 taxation years.

“Jennifer Griffith”