Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: August 20, 2018

FILE NO.: WR 153796

Assessed Person(s): Donald Paul Bauman and Trudy Jean Bauman

Appellant(s): Donald Paul Bauman and Trudy Jean Bauman

Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 22

Respondent(s): Township of East Garafraxa

Property Location(s): 24193 East Gara-Erin Townline

Municipality(ies): Township East Garafraxa

Roll Number(s): 2201-000-003-03705-0000

Appeal Number(s): 3269392 and 3311740

Taxation Year(s): 2017 and 2018

Hearing Event No.: 700466

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

Heard: On June 5, 2018 in Amaranth, Ontario

APPEARANCES:

Parties	Counsel+/Representative
Donald Paul Bauman	Self-represented
MPAC	Leslie Lake and Jim McAdam
Township of East Garafraxa	No one appeared

DECISION OF THE BOARD DELIVERED BY JOANNE LAWS

INTRODUCTION

1Donald Paul Bauman and Trudy Jean Bauman have appealed the 2017 taxation year assessment of their property, located at 24193 Erin East Garafraxa Townline (“the subject property”) in the Township of East Garafraxa (“the Township”). Mr. Bauman argues that his assessment is too high due to the proximity to and encroachment of a gravel pit and that his assessment should not exceed $499,000.

2MPAC’s representatives, Leslie Lake and Jim McAdam, argue that the assessment as returned at $579,000 is correct and equitable.

3For 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 $499,000 for the 2017 and 2018 taxation year. 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.

4Accordingly, the assessment of the subject property is reduced from $579,000 to $499,000 for the 2017 and 2018 taxation year in the Residential property class.

LEGISLATION

5Section 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 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.

6Once 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.

7In addition to the 2017 taxation year appeal filed by the Appellants, there is a 2018 taxation year appeal before the Board. This is because, pursuant to s. 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.”

CURRENT VALUE

The Gravel Pit

8The subject property is a long, narrow rectangle of land measuring 10.33 acres with 230 feet of road frontage. The rectangle runs in a north-west direction from East Gara-Erin Townline. It is located between 16th Line to the southwest and 17th Line to the northeast and County Road 3 to the northwest. The subject property is improved with a one-storey, single family detached residence, built in 1998 with 2,419 square feet (“sq. ft.”) of building area and 2,419 sq. ft. of unfinished basement area. There is an attached garage measuring 961 sq. ft., an uninsulated barn measuring 1,680 sq. ft. and an insulated barn measuring 1,568 sq. ft.

9The parties agree that the subject property abuts Greenwood Gravel Pit, which is located to the northeast and that it is in close proximity to Universal Gravel Pit which is located to the southwest.

10Ms. Lake explained that the Baumans have sought adjustments for the gravel pits in the past. In 2003 the Board granted a -10% adjustment for proximity to a nuisance. In 2006 MPAC and the Baumans agreed to an additional -3% adjustment for abutting industrial land. In 2009 an additional -8% market adjustment was granted by MPAC, based on comparable property sales, for the January 1, 2008 valuation day for a total adjustment of -21%. The -8% market adjustment was carried forward to the January 1, 2012 valuation day but was removed for the January 1, 2016 valuation day.

11The assessment as returned as of the January 1, 2016 valuation day is $579,000. Ms. Lake testified that the returned assessment reflects a -13% adjustment for proximity to a nuisance and an additional -3% adjustment for abutting an industrial property for a total adjustment of -16%. She testified that the -3% adjustment is an error and should have been removed rather than carried forward because the -13% includes an adjustment for abutting industrial. Her position is that the property has received two adjustments for the same issue and, she argues, no further adjustment is warranted.

12Mr. Bauman stated he is seeking an assessment of no more than $499,000, arguing that the diminished resale value of his property should be considered. He testified that he and his wife purchased the subject property in 1994. They received information from the Township that the existing Greenwood Gravel Pit (“Greenwood”), located to the northeast of their land and the Universal Gravel Pit located west of 16th Line would not be granted expansion permits, that Greenwood would cease operation in 2009 or 2010 and the pit would be converted to a lake. They proceeded to build their home based on this information. At that time, they were surrounded by other residential properties and farmland and there was a maple bush between the subject property and Greenwood as well as a sizeable berm, both of which helped to block the dust, sand and noise from Greenwood.

13In the early 2000s Greenwood received permission to expand the gravel pit south towards East Gara-Erin Townline and in 2012 the abutting farmland, located between the subject property and Greenwood was purchased by Greenwood and the maple bush was removed. In 2016 the berm, measuring 20 feet high, 30 feet wide and 500 yards long, was removed as were trees located along the fence line. The Baumans can now see and hear traffic on 17th Line and are affected by fine sand and dust from Greenwood and the extraction has reached their property line. In addition, Universal Gravel Pit, located west of 16th Line, expanded by an additional 400 acres in 2012. There is an application for a further 400 acre expansion of Greenwood for the parcel of land abutting the northwest side of the subject property.

14Mr. Bauman testified that the excavation work begins every day at 6 a.m., spring, summer and fall. Due to the fine sand and dust, they can no longer hang their laundry to dry outside and it accumulates on the house and settles in the eave troughs and must be removed by hand. He testified the noise includes the sounds of conveyer belts, crushers, loaders, back-up sirens and beepers from vehicles.

15Mr. Bauman presented maps and photographs showing the encroachment progression of the gravel pits. He testified that his property was originally 2,000 feet from the gravel pit and now it is only 400 feet. He provided no evidence to support a value of $499,000 but relied on MPAC’s sales data to support his position.

16There is no dispute between the parties that the subject property abuts a gravel pit and that the activities at the gravel pit are closer to the subject property than in the past. I accept Mr. Bauman’s testimony that the conditions caused by the advancing gravel pit activity are affecting his property and his and his wife’s quiet enjoyment of their land.

Sales Comparables

17The best evidence of current value of a residential property is an open market sale of that property on or near the valuation day. When that evidence is not available, open market sales of similar properties on or near the valuation day are the next best evidence.

18Ms. Lake presented seven sales on six properties which are outlined in Table 1 below. All of the sales have lot sizes that are similar to the subject property. Ms. Lake time-adjusted the sales to the January 1, 2016 valuation day.

Table 1

	Address	House Size (sq. ft.)	Year Built	Quality of Construction	Lot Size (acres)	Sale Date	Sale Price	TASP
	Subject Property	2,419	1998	6.5	10.33	N/A	N/A	N/A
1	311047 16th Line	2,112	1982	5.5	10.01	August 2016	455,000	401,039
2	311013 16th Line	1,470	1971	6	10.01	June 2015	390,000	415,819
3	311049 16th Line	3,289	1984	7	10.57	January 2017	880,000	695,778
4	311049 16th Line	3,289	1984	7	10.57	July 2014	730,000	763,952
5	64256 Country Road 3	2,759	1999	7	10.01	July 2016	946,000	849,717
6	64266 Country Road 3	2,350	1975	6	10.01	August 2016	690,000	608,170
7	231039 Country Road 24	888	1960	6	10.07	February 2016	440,000	431,254

19Sales 1, 2, 3 and 4 are located to the west of the subject property and are located across a road from Universal Gravel Pit. Sales 5 and 6 are located north of Greenwood and Sale 7 is located west of Universal Gravel Pit. Sales 5, 6 and 7 do not abut gravel pits and none of the sales abut Greenwood.

20I find that Sale 1 is inferior to the subject property. It has a smaller building and no barns or a garage. I find that the subject property would likely sell for more than its time-adjusted sale price of $401,039.

21I find that Sale 2 is also inferior to the subject property. It is similar in that it has a single storey residence and has an uninsulated barn. However, that barn is smaller than the subject property’s at 1,248 sq. ft. and is older with a build date of 1978. It has a detached garage measuring 192 sq. ft., which is much smaller than the subject property’s garage. It does not have an insulated barn and the residence is much smaller and older than the subject property’s. I find that the subject property would likely sell for more than its time-adjusted sale price of $415,819.

22I am disregarding Sales 5, 6 and 7, none of which abuts a gravel pit. Ms. Lake argued that they are comparable to the subject property and that applying the subject property’s adjustment factor to these sale values will provide an indication of the subject property’s current value. I disagree. The adjustment factor is the issue in dispute. The Appellants are arguing that MPAC has not provided a sufficient discount to reflect the encroachment of the gravel pit activity.

23Sales 3 and 4 are the same property. Of the sales I am considering, it is the most similar to the subject property in terms of age and it has a similar lot size. It has a two-storey residence which is significantly larger than the subject property’s. However it does not have any barns, the garage is smaller (603 sq. ft.) and I accept Mr. Bauman’s testimony that the residence of this property is located at a distance from active excavation work and its accompanying noise and dust. Using the January 2017 sale, which is the closest sale to the valuation day, the value per square foot of building area is $211.54 ($695,778/3,289 sq. ft.). Based on the proximity of the gravel pits and the physical particulars of these two properties, I find that the subject property would sell for less than this property on a square foot basis.

24Mr. Bauman argued his property’s current value should not exceed $499,000. This translates to $206.28 per square foot of building area ($499,000/2,419 sq. ft.) which is slightly lower than the sale value of $211.54. I find this to be a reasonable value.

25Accordingly, I find that the current value of the subject property is $499,000 for the 2017 and 2018 taxation year.

EQUITY

26Once I have determined current value, s. 44(3)(b) of the Act requires that I look at the assessments of similar lands in the vicinity and determine if it would be fair or equitable to assess this property at its current value. Section 19(1) of the Act provides that all property is to be assessed at its current value. I may only assess a property below its current value with evidence that similar property in the vicinity is assessed below its current value.

27Ms. Lake presented an equity study of 30 properties in the vicinity of the subject property in which the median assessment to sale ratio (“ASR”) is 0.953. In other words, the median assessment was 95.3% of the sale price.

28This study, with its large sample of sales, shows that properties in the vicinity of the subject property tend to be is assessed close to its current value and, therefore, it would be fair to assess the subject property at its current value.

CONCLUSION

29Based on the evidence presented, I find that the subject property’s current value is $499,000 as of the January 1, 2016 valuation day. There is no evidence that it would be unfair to assess the subject property at its current value.

30Accordingly, I am reducing the assessment from $579,000 to $499,000 for the 2017 and 2018 taxation years.