Gillespie v. Municipal Property Assessment Corporation, 2018 CanLII 80812

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE:

August 22, 2018

FILE NO.:

WR 154642

Assessed Person(s):

Anne Patricia Gillespie, Laurent Chauvier

Appellant(s):

Anne Patricia Gillespie, Laurent Chauvier

Respondent(s):

Municipal Property Assessment Corporation (“MPAC”) Region 23

Respondent(s):

City of London

Property Location(s):

2501 Oxford Street West

Municipality(ies):

City of London

Roll Number(s):

3936-090-110-03000-0000

Appeal Number(s):

3260480 and 3312280

Taxation Year(s):

2017 and 2018

Hearing Event No.:

701271

Legislative Authority:

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

Heard:

July 31, 2018 by telephone conference call

APPEARANCES:

Parties

Representative

Anne Patricia Gillespie

Self-represented

MPAC

Josh Morgan

City of London

No one appeared

DECISION OF THE BOARD DELIVERED BY ANTHONY LaREGINA

INTRODUCTION

1The subject property is a single-family one-storey detached dwelling located at 2501 Oxford Street West in the City of London (“City”). The dwelling was built in 1838 and now has an effective year built of 1968 resulting from a 1993 D renovation. The dwelling has a total building area of 908 square feet (“sq. ft.”) on the first floor and 252 sq. ft. in the basement which has no finished space and a 5 foot ceiling height. The lot has 132 feet of actual frontage and 165 feet of actual depth resulting in an effective site area of 21,780 sq. ft. or 0.5 acres of land. The subject property has a 200 sq. ft. shed with no value attributed. The subject property has hydro, year round road access, private well, a septic bed and no curves or gutters, sidewalks or street lights. For the 2017 and 2018 taxation year, the current value assessment was returned at $250,000 which includes a -5% adjustment for functional obsolescence and -5% for heavy traffic as Oxford Street West is a feeder street into the City Center.

2Josh Morgan, the assessor from MPAC, provided the Assessment Review Board (“Board”) with eight comparable property sales located in the vicinity of the subject property. Based on the sale value per square foot of the comparable sales, Mr. Morgan determined that the current value of the subject property was $250,000. Mr. Morgan presented an equity study with a 0.977 median Assessment to Sales Ratio (“ASR”), suggesting that no equity adjustment is required. Mr. Morgan is seeking a confirmation of the assessment as returned at $250,000.

3Anne Gillespie, the Appellant, is requesting a reduction in the returned assessment from $250,000 to $189,000 reflecting the 2012 valuation which was established in a Board decision resulting from her 2013 appeal. Ms. Gillespie also entered into evidence eight comparable properties sales to further support the $189,000 valuation.

4In addition to the 2017 taxation year appeal filed by Ms. Gillespie and Laurent Chauvier, there is a 2018 taxation year appeal before me. This is because, pursuant to subsection 44.(26) of the Assessment Act, R.S.O. 1990, c. A.31 (“Act”), a 2018 appeal is deemed to have been filed if the 2017 taxation year appeal was “not finally disposed of before March 31, 2018”.

ISSUES

5The 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 with the assessments of similar lands in the vicinity?

DECISION

6The Board finds the current value of the subject property for the 2017 and 2018 taxation years to be $199,000.

7The Board determines that the current value requires no further adjustment in order to make the assessment of the subject property equitable with the assessments of similar lands in the vicinity.

8The Board reduces the assessment of the subject property from $250,000 to $199,000 for the 2017 and 2018 taxation years.

REASONS FOR DECISION

Current Value – Evidence and Analysis

9In accordance with s. 44.(3)(a) of the Act, the first mandate of the Board is to determine “the current value of the land.” Section 1 of the 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.”

10For 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 s. 19.2 of the Act.

MPAC’s Position

11Mr. Morgan presented eight comparable property sales located in the vicinity of the subject property. The data representing the eight properties is displayed below:

Subject

Sale 1

Sale 2

Sale 3

Sale 4

Sale 5

Sale 6

Sale 7

Sale 8

2501 Oxford Street

58 Kristen Court

26 Aylesford Court

70 Maxine Court

46 Maxine Court

2 Maxine Court

34 Maxine Court

10927 Oxbow Drive

22508 Coldstream Road

KM’s from Subject

1.96

1.94

2.04

2.05

2.09

2.09

2.58

2.03

Current Value Assessment (“CVA”) $

250,000

216,000

236,000

236,000

236,000

251,000

271,000

293,000

331,000

Sale Date

12/2016

07/2015

08/2015

09/2015

02/2015

07/2015

01/2015

09/2016

Sale Amount $

235,000

197,500

238,000

230,000

225,000

253,000

335,000

275,000

Time Adjusted Sale (“TAS”) $

218,307

201,931

242,696

233,758

232,119

258,676

345,550

261,882

Effective Year Built

1968

1997

1997

1998

1998

1998

1998

1965

1953

Quality

5.5

6

6

6

6

6

6

6

6

Building Area sq. ft.

908

985

1,015

1,015

1,015

1,015

1,015

1,079

1,149

Site Area acres

0.5

0.07

0.08

0.12

0.12

0.14

0.10

1.4

2.66

Basement S.F./ Finished

252

985/460

1,015

1,015

1,015

1,015/160

1,015/507

1,079/507

1,030/598

Time adjusted sale price per square foot (“TASP/S.F. $”)

221.63

198.95

239.11

230.30

228.69

254.85

320.25

254.25

Sale Value/S.F.

238.57

194.58

234.48

226.60

221.67

249.26

310.47

239.33

12Mr. Morgan opined that Sale 1 to Sale 6 have similar building area to the subject property but the lot sizes are substantially smaller and therefore the time adjusted sale values are lower than those of Sale 7 and Sale 8 which have larger lots similar to the subject property. Mr. Morgan therefore utilizes Sale 7 and Sale 8, 10927 Oxbow Drive and 2205 Coldstream Road, to establish the current value of the subject property.

13Mr. Morgan calculates the actual sale value per square foot of both 10927 Oxbow Drive at $310.47 and 2205 Coldstream Road at $239.33 and concludes that the average sale value per square foot is $274.90 is very much in line with the assessed value per square foot of the subject property of $275.33.

14Based on the average sale value per square foot of both 10927 Oxbow Drive and 2205 Coldstream Road adjusted for building area of the subject property, Mr. Morgan requests that the Board find the current value of the subject property to be $250,000.

Appellant’s Position

15Ms. Gillespie described the subject property as a very old stone cottage with walls that are 2.5 feet thick therefore reducing her interior living area to 668 square feet leaving space for only one bedroom, kitchen, living room and bathroom. Based on these characteristics as well as the fact that her property is on well water with high sulphur content and a basement that floods she believes they overpaid for the property in 2010 when both her and Mr. Chauvier purchased it for $210,000. According to Ms. Gillespie they purchased the property sight unseen and were not aware that the subject property flooded and the well water had high sulphur content. Although Ms. Gillespie did admit during the hearing that the water purification system currently located in the basement was there when they purchased the home and that the home was on a septic bed with well water and only had one bedroom.

16In 2011, Ms. Gillespie’s tenants brought an action against her and Mr. Chauvier claiming that the property was unfit for occupancy. At the time the Landlord and Tennant Board determined that there were multiple breaches of s. 20(1) of the Act, including the supply of blackened water, an improperly maintained water treatment system, windows that did not open and shut to allow for ventilation, a dilapidated heating system and an unsafe electrical system. The Municipality inspected the system and decided that the water was not potable. Since the 2011 action, the subject property has been improved with a new furnace and windows with shutters which can open if required. In addition, the water treatment system is being properly maintained and the water deemed once again potable. The current tenant in the subject property has been there for over two years without any further actions.

17Ms. Gillespie relied on the Board’s decision rendered by Member Wyger on June 11, 2014 Re: Gillespie v. Municipal Property Assessment Corp., Region No. 23, [2014] O.A.R.B.D. No. 342 which acknowledges that the subject property has 2.5 foot walls reducing the living area to 668 sq. ft. Member Wyger addressed the water quality problem and made a 10% adjustment for all functional obsolescence which included the water issue after having set the current value at the 2010 purchase price of $210,000. Mr. Wyger reduced the assessment from $223,000 to $189,000 for the 2013 taxation year.

18Ms. Gillespie entered eight comparable properties in support of current value. The properties selected are all old stone homes in the City that she believes are better comparable properties than the ones submitted by MPAC which are newer than the subject property and outside of the City limits.

19Ms. Gillespie’s comparable properties are as follows;

Subject

Property 1

Property 2

Property 3

Property 4

Property 5

Property 6

Property 7

Property 8

Address

2501 Oxford Street

149 William Street

133 Maitland Street

141 Sackville Street

454 Woodman Avenue

471 Charlotte Street

369 Regal Drive

529 Grey Street

105 Chesley Avenue

C.V.A $

250,000

140,000

126,000

163,000

143,000

158,000

181,000

182,000

198,000

Sale Date

October 2010

June 2014

February 2018

May 2014

January 2012

n/a

February 2012

n/a

n/a

Sale Value $

210,000

129,000

224,000

152,000

173,000

n/a

172,000

n/a

n/a

Effective Site area S.F.

21,780

3,030

3,251

9,003

2,976

6,754

6,635

13,002

11,275

Yr. /Eff, Yr. Built

1838/1968

1881

1885

1886

1922

1898

1954

1873

1951

Quality

5.5

5.5

5

6

6

6

6

6

6

Building Area S.F.

908

1,031

922

1,111

1,088

1,087

1,029

1,165

1,007

Basement S.F./Fin.

252

333/143

620

738

594/260

482

1,029

1,165/920

1,018/774

20Ms. Gillespie submits that the older homes are more similar to the subject property in terms of age and building area and are assessed in a range from $126,000 to $198,000 further supporting her request to reduce the assessment of her property to $189,000. However Ms. Gillespie admits during cross examination that the lot areas of the comparable properties are substantially smaller than the subject property and that it was difficult to find properties with larger lot areas like the subject property. Also during cross examination, it was determined that these comparable properties were located 15 to 25 kilometres from the subject property in a different part of London as compared to MPAC’s comparable properties which are located within two kilometres from the subject property.

Board’s Analysis of Current Value

21The 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 sale of other similar properties in the vicinity which occurred close to the valuation day in order to determine current value.

22The Board accepts the eight comparable properties submitted by MPAC because the sales fall within the shoulder years and the sale values are time adjusted to reflect a January 1, 2016 valuation day. In addition, these properties are relatively similar and located within 2.5 kilometres of the subject property.

23Ms. Gillespie introduced eight comparable properties of which five sold in support of current value. The five sales occurred between 2012 and 2018 and therefore it is very difficult to utilize these sale values without time adjustments reflecting a January 1, 2016 valuation. The Board will therefore reject these properties for the purposes of establishing the current value of the subject property.

24The Board does not agree with Mr. Morgan that current value of the subject property should be based on the sale value per square foot of the two most superior properties, 10927 Oxbow Drive and 22508 Coldstream Road. The subject property has a lot of only 0.5 acres as opposed to these two properties which have lots of 1.4 acres and 2.66 acres.

25The Board will determine the current value of the subject property based on the mean time adjusted value per square foot of all the comparable properties submitted by MPAC which incorporate a combination of lot areas from 0.1 acres to 2.66 acres averaging 0.58 acres as well as similar building areas as the subject property. The mean time adjusted sale value per square foot of all eight properties is $243.50. Applying this value to the 908 sq. ft. of building area gives us a current value of the subject property of $221,101.

26In the absence of any other quantitative evidence to substantiate functional obsolescence or traffic nuisance, the Board will accept a -5% adjustment for functional obsolescence and -5% for heavy traffic as presented in evidence by MPAC yielding a total downward adjustment of $22,110.

27Therefore, the current value will be set at $198,991 rounded to $199,000 based on a January 1, 2016 valuation date.

28The Board will make no adjustment for the sulphur in the water system. It is clear from the evidence that the water is potable, being treated by a water treatment system serviced by Mulligan Water Systems Inc. and maintained by the current tenant who has been living on the subject property for over two years.

29Member Wyger made an overall adjustment of 10% for functional obsolescence that included the water quality issues which was justified at the time based on the condition of the subject property as well as the 2011 legal action commenced by the tenant. This situation has been substantially improved and therefore the Board will make no further adjustments for water quality issues.

30With regards to the thickness of the walls once again this was referenced in Member Wygers decision as having an effect on internal living area but the fact remains that the total building area is based on outside measurements and I have no evidence supporting wall thickness of the comparable properties and therefore no further adjustment will be made to compensate for wall thickness. I have always referenced the building area based on the external measurements of the subject property and the comparable properties presented by both parties are based on the external measurements.

31Finally, with regards to the Ms. Gillespie’s claim that they overpaid for the property in 2010. This is now a 2016 valuation and it is clear that the dwelling has been improved since it was purchased in 2010, which is also reflected in the 2016 current value. Furthermore, with the dwelling came half acre of land on a main road leading into the City Center which is also part of the current value. Neither MPAC nor the Appellant have provided sales of properties with similar land areas and it is therefore difficult to establish a precise value on the subject property taking the subject land size and unique location into consideration. Ms. Gillespie presented eight comparable properties all of which have much smaller lot areas and similar size dwellings and yet the assessed value of 105 Chesley Avenue at the upper end of the range was $198,000, very much in line and supports the assessed value established by the Board of the subject property. Based on all the evidence, it appears that the valuation established by the Board is very reasonable and in line with the valuation of the comparable properties.

Board’s Analysis of Equity

32Section 44.(3)(b) 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.”

33The ASR of a sample of sold properties is a tool often used to determine if a property in the vicinity is assessed below its current value. If any other property is assessed below its current value, a reduction in the assessment below current value is required to make the assessment equitable with the assessments of similar lands in the vicinity. The ASR is determined by dividing the assessment as returned by the time adjusted sale price.

34Mr. Morgan presented an equity analysis of 30 residential sales that occurred from January 1, 2015 to December 31, 2016, all located within 8 kilometres of the subject property, resulting in a median ASR of 0.977. Mr. Morgan submits that MPAC standards indicate that for residential property, the median ASR should fall between 0.95 and 1.05. If the median ratio falls within this range, this reveals that the CVAs are reflective of sales prices in the vicinity and therefore no further adjustment is required. In this case the median ASR falls inside of the range at 0.977 therefore, Mr. Morgan has recommended no adjustment to the current value.

35Ms. Gillespie provided no evidence in support of an equity argument.

36The best evidence in relation to equity is the sale and assessment evidence of 30 properties presented by MPAC indicating a median ASR of 0.977. Based on MPAC’s equity study, the Board finds that no further adjustment to the current value of the subject property at $199,000 is required in order to ensure it is equitable with the assessment of other property in the vicinity.

CONCLUSION

37Based on the best available evidence, the Board reduces the assessment of the subject property from $250,000 to $199,000 for the 2017 and 2018 taxation years.