Anna Dreyzin v. Municipal Property Assessment Corporation, 2018 CanLII 8124

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE:

February 21, 2018

FILE NO.:

WR 149842

Assessed Person(s):

Anna Dreyzin

Appellant(s):

Anna Dreyzin

Respondent(s):

Municipal Property Assessment Corporation (“MPAC”)

Region 14

Respondent(s):

City of Vaughan

Property Location(s):

78 Lawrie Road

Municipality(ies):

City of Vaughan

Roll Number(s):

1928-000-190-76000-0000

Appeal Number(s):

3224057

Taxation Year(s):

2017

Hearing Event No.:

690169

Legislative Authority:

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

Heard:

December 8, 2017 in Toronto, Ontario

APPEARANCES:

Parties

Representative

Anna Dreyzin and Vadim Dreyzin

Self-represented

MPAC

Leo Verduci

City of Vaughn

No one appeared

DECISION OF THE BOARD DELIVERED BY MARCELLE BOURASSA

INTRODUCTION

1Anna and Vadim Dreyzin (“Appellants”) and their three small children reside in the three-storey single family detached home located at 78 Lawrie Road in the City of Vaughan (the “subject property”). It has 5,455 square feet (“sq. ft.”) of total building area and 2,178 sq. ft. of finished basement area. The third storey consists of about 800 sq. ft. of finished area used as a play area. MPAC has assigned it a quality of construction rating of 7. The total effective lot size is 0.19 acres.

2Leo Verduci, representing MPAC, stated that the 2016 current value assessment (“CVA”) was returned at $1,860,000. He determined a current value of $2,061,000 and an equitable assessment of $1,875,000. As the equitable assessed value is higher than the CVA as returned, no equity adjustment is required under the Assessment Act (“Act”). Therefore, he submits that the CVA of $1,860,000 should be confirmed for the 2017 taxation year.

3The Appellants submit that the assessment for the subject property is too high. The assessed value has increased by 48% (or $603,000) and the property should be assessed at $1,684,380 based on the average increase of 34% in the value of single detached homes in the City of Vaughan between February 2012 and January 2016. Furthermore, they maintain that many properties on the same street are very similar to the subject property but have been assessed lower than the returned CVA.

4Under the Act, the Assessment Review Board (“Board”) must first determine the correct current value of the land and then determine whether it should be adjusted to make it equitable with the assessments of similar lands in the vicinity.

DECISION

5For the reasons stated below and pursuant to s. 44.(3)(a) of the Act, the Board sets the current value of the property, as of the valuation day of January 1, 2016, at $1,934,723 and finds that there is evidence leading to the conclusion that the current value is not equitable relative to the assessments of similar lands in the vicinity and requires a further adjustment under s. 44.(3)(b) of the Act.

6Accordingly, for the 2017 taxation year, the assessment for the subject property is reduced from $1,860,000 to $1,761,000.

REASONS FOR DECISION

The Legislation

7Section 1 of the Act states:

“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.

8Section 19.(1) of the Act states:

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

9Section 19.2(1) of the Act states:

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:

For the 2006, 2007 and 2008 taxation years, land is valued as of January 1, 2005.

For the period consisting of the four taxation years from 2009 to 2012, land is valued as of January 1, 2008.

For each subsequent period consisting of four consecutive taxation years, land is valued as of January 1 of the year preceding the first of those four taxation years.

Exception

(5) Subsection (1) does not apply in respect of the valuation of land for a taxation year after 2004 if the Minister prescribes a different day as of which land is valued for that year.

10Section 44.(1) of the Act states:

Assessment may be open upon appeal

44.(1) Upon an appeal on any ground against an assessment, the Assessment Review Board or court, as the case may be, may reopen the whole question of the assessment so that omissions from, or errors in the assessment roll may be corrected, and the amount for which the assessment should be made, and the person or persons who should be assessed therefor may be placed upon the roll, and if necessary the assessment roll, even if returned as finally revised, may be opened so as to make it correct in accordance with the findings made on appeal.

11Section 44.(3) of the Act states:

Same 2009 and subsequent years

44.(3) For 2009 and subsequent taxation years, in determining the value at which any land shall be assessed, the Board shall, determine the current value of the land; and 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.

THE BOARD’S ANALYSIS

MPAC’s Case

12Mr. Verduci testified on behalf of MPAC. He submitted a Valuation Report. He stated that he asked to inspect the subject property but was unable to do so because the Appellant and her husband both work and were only available after working hours.

13In his Valuation Report, Mr. Verduci provided information on the sales of four properties that took place in the subject property during the period of January 1, 2015 and December 31, 2016, the shoulder years to the January 1, 2016 valuation date. His search criteria included properties with valid sales that occurred in the shoulder years, with similar square footage, lot size and quality of construction. Sales were time adjusted. The overall change in the market during this period was 42.33 per cent.

14The first property, 88 Lawrie Road, has a similar lot at 0.21 acres and is 4 years older. However, its dwelling size at 4,327 sq. ft. is much smaller and so he considers this property as inferior to the subject property. He stated that the subject property should have a greater value than the time adjusted sale for this property (“TAS”) of $1,915,391.

15The second property, 74 Lawrie Road, has the same lot size and is one year older. However, its dwelling size, at 4,655 sq. ft., is much smaller than the subject property and so he considers this property to be inferior to the subject property. He states, therefore, that the subject property should have a greater value than the TAS of $1,954,055 for this property.

16The third property, 453 Beverley Glen Boulevard, has a slightly larger lot size and is three years newer than the subject property. However, its dwelling size, at 4,092 sq. ft., is much smaller and so he considers this property to be inferior to the subject property. He states, therefore, that the subject property should have a greater value than the TAS of $1,642,318 for this property.

17The fourth property, 449 Beverley Glen Boulevard, has a slightly larger lot size and is one year older. However, its dwelling size at 3,660 sq. ft. is much smaller and so he considers this property as inferior to the subject property. He states, therefore, that the subject property should have a greater value that the TAS of $1,776,622 for this property.

18Based on the above comparables, he estimates the current value of the subject property to be $2,061,000.

19Mr. Verduci also relies on an Equity Analysis Report that considers the time adjusted sales of 30 single family detached residential properties located within 0.35 kilometres of the subject property that occurred within the period of January 1, 2015 to December 31, 2016.

20In his report Mr. Verduci states that the level of appraisal is established by determining the median Assessment to Sales Ratio (“ASR”) in the sales sample. He notes that the International Association of Assessing Officers (“IAAO”) standards state that the level of appraisal for all property types, measured in terms of the ASR should fall between 0.90 and 1.10. He explained that MPAC applies a more stringent standard of 0.95 – 1.05. He noted that if the median ratio falls within this range, this would indicate that MPAC’s assessments of current value are reflective of sales prices in the vicinity. In this instance, the sales sample produced a median ASR of 0.91.

21Mr. Verduci determined the equitable assessment by multiplying the estimated current value of $2,061,000 by the level of assessment of 0.91 resulting in the value of $1,875,000. As this value is higher than the returned CVA, no equity adjustment is required under the Act.

22Therefore, he submits that the assessment of $1,860,000 should be confirmed for the 2017 taxation year.

Appellants’ Case

23The Appellants submit that the assessment for the subject property is too high, noting that the assessed value has increased by 48% (or $603,000) over the current value assessed on January 1, 2012. They state that based on the average increase of 34% in the value of single detached homes in the City of Vaughan between February 2012 and January 2016, they should be assessed at $1,684,380.

24Furthermore, they maintain that many properties on the same street are very similar to the subject property but have been assessed lower that the subject property’s CVA as returned. In support of this submission, they refer to several properties: 98 Lawrie Road (CVA $1,621,000), 148 Lawrie Road (CVA $1,580,000), 142 Lawrie Road (CVA $1,612,000) and 22 Loudon Crescent (CVA $1,463,000).

25The Appellant, Ms. Dreyzin, stated that their home is 15 years old with all original finishes which have depreciated in value significantly. It also includes 800 sq. ft. of finished loft area on the third floor that is used as a play area for their three children due to its low ceiling height. She maintains that it cannot be used in the same way as a bedroom and should not be counted the same way as the first and second levels of the house.

26Ms. Dreyzin referred to the property at 98 Lawrie Road that sold in March 2014 for $1,470,000, expressing her view that this property is very similar to the subject property. She noted that both properties were built in 2002 and are close to each other on Lawrie Road. She stated, however, that 98 Lawrie Road has a larger lot, a pool and significant upgrades. She also asserts that lots of homes on the street have recently sold for $1,300,000.

27Ms. Dreyzin was asked by the Board about comparable properties. She considers 1 Lawrie Road as included in the sample of 30 sales in MPAC’s Equity Analysis Report, as a superior property as it is newer and has superior finishes. It has a TAS of $1,663,730 and a CVA of $1,625,000. She also referred to 49 Vaughan Road on the next street perpendicular to Lawrie Road with TAS of $1,300,607 and a CVA of $1,543,000. She added that the subject property’s assessment should be lower than that for 74 Lawrie Road. She indicated that she has been inside this house and states that it is a much nicer house with significant upgrades and a pool. She also noted that 88 Lawrie Road has a larger lot, a pool and a really stunning interior with many upgrades.

28Generally, the Appellants were of the view that an increase of 42.33% is atypical. Mr. Dreyzin was of the opinion that MPAC was using sales that occurred at the end of 2016 during the two year shoulder period with atypical increases in value.

29Mr. Dreyzin also referred to a chart that allegedly demonstrates that MPAC made time adjustment errors as compared to MLS data obtained from the Toronto Real Estate Board. The further away from January 1st the higher the error in comparison to active MLS data.

30The Appellants stated that the houses and lots on King High Drive are generally bigger than on Lawrie Road. Also, King High Drive is also further away from Centre Street which is a major thoroughfare subject to VIVA route construction. Lawrie Road is a changing neighbourhood with a mixture of newer larger homes and much older smaller homes.

Current Value

31The initial task of the Board is to use the best evidence available to determine the current value of the property as required by s. 1, s. 19.(1) and s. 44.(3)(a) of the Act.

32The best evidence the Board can receive of current value is an arm’s length and market-tested sale of the subject property on the valuation day or close to it. If, as in this case, no such transaction took place, the next best measure of current value is arm’s length and market-tested sales of comparable properties located nearby, as close as possible to the valuation date of January 1, 2016. This measure acts as a bench mark to gauge the accuracy of the assessed value of the subject property and comparable properties.

33To enable an estimate of value for the subject property to be derived from suggested comparable properties, there must be sufficient elements of similarity, in terms of physical factors such as building area, land area, land frontage, age of construction, physical condition, etc. The Board finds that this approach is more reliable that the Appellants’ suggestion that the assessment be based on the average increase of 34% in the value of single detached homes in the City of Vaughan between February 2012 and January 2016.

34Also, it is unfortunate that the Appellants were unable to coordinate a time to allow MPAC to inspect the subject property, given their concern that the 800 sq. ft. of finished area on the third floor should not be treated in the same way as the first and second levels of the house. They use it as a play area for their three small children due to its low ceiling height. The Board notes that it is a heated and finished space and finds that it adds some value to the subject property, even though it may not be suitable for use as a bedroom.

35The Board has considered the sales in evidence.

3688 Lawrie Road - has the same quality of construction, a slightly larger lot at 0.21 acres, a smaller finished basement area at 1,356 sq. ft., and is four years older than the subject property. However, it has a total building size of 4,327 sq. ft. which is slightly smaller than the subject property’s total building area even if the 800 sq. ft. on the third level is discounted. Ms. Dreyzin stated that in addition to having a larger lot, it has a pool and a really stunning interior with many upgrades. The property has a TAS of $1,915,391. The Board finds this property to be reasonably comparable to the subject property.

3774 Lawrie Road - has the same quality of construction, the same lot size and is one year older than the subject property. However, it has a total building size of 4,655 sq. ft. which makes it identical to the subject property’s total building area if the 800 sq. ft. on the third level is discounted. Unlike the subject property, it does not have any finished area in the basement. Ms. Dreyzin stated that it was built by the same builder and that she has been inside this house and that it is a much nicer house with significant upgrades and a pool. The property has a TAS of $1,954,055. The Board finds this property to be reasonably comparable to the subject property.

38453 Beverley Glen Blvd. - has the same quality of construction, a slightly larger lot size at 0.23 acres and is three years newer than the subject property. However, its total building area of 4,092 sq. ft. is much smaller even if the subject property’s total building area if the 800 sq. ft. on the third level is discounted. Also, it only has 153 sq. ft. of finished area in the basement. The property has a TAS of $1,642,318. The Board finds this property to be inferior to the subject property.

39449 Beverley Glen Blvd. - has the same quality of construction, a slightly larger lot size and is one year older than the subject property. However, its total building size at 3,660 sq. ft. is still about 1,000 sq. ft. smaller than the subject property’s total building area even if the 800 sq. ft. on the third level is discounted. Unlike the subject property, it does not have any finished area in the basement. The property has a TAS of $1,776,622. The Board finds this property to be inferior to the subject property.

4098 Lawrie Road – has a slightly larger lot at 0.21 acres and is the same age as the subject property. Ms. Dreyzin states in her evidence that this property is very similar to the subject property but it has a pool and significant upgrades. However, its total at 3,913 sq. ft. is still 740 sq. ft. smaller than the subject property even it the 800 sq. ft. on the third level is discounted. It is not known whether it has any finished area in the basement. The property sold in March 2014 for $1,470,000 and no time adjustment factor was available to assist the Board in determining a time adjusted sale value. The Board is unable to give further consideration to this sale.

41Reference was made to the sales at 1 Lawrie Road and 49 Vaughan Road. However, in the absence of information pertaining to the age, quality of construction, lot size, total building area, and so on, the Board is unable to make any meaningful comparisons with the subject property.

42Based on the above evidence, the Board finds that the best indication of current value is the average of the time adjusted sales for the properties located at 88 and 74 Lawrie Road. Applying this approach, the Board finds that the correct current value is set at $1,934,723.

Equity with Similar Lands in the Vicinity

43The Board must also consider the assessments of similar properties in the vicinity and determine whether the correct current value, as established, is inequitable relative to those assessments. If so, it should be adjusted to make it equitable, as required by s. 44.(3) of the Act.

44For purposes of establishing equity, properties do not need to be comparable, they need to be of a similar nature and within a reasonable proximity. Considering an ASR analysis using a reasonable sample of property sales is one method for that purpose.

45Mr. Verduci prepared an Equity Analysis Report that considered the time adjusted sales of 30 single family detached residential properties located within 0.35 kilometres of the subject property that occurred within the period of January 1, 2015 to December 31, 2016.

46As stated in his report, MPAC’s standard is that equity has been achieved where the median ASR for the properties analyzed falls between 0.95 – 1.05. If the median ASR falls within this range, this would indicate that the current value assessments are reflective of sales prices in the vicinity. In this instance, the sales sample produced a median ASR of 0.91 which indicates that similar properties in the vicinity are assessed at values that are lower than their current values. Therefore, the assessment of the subject property should be reduced to make it equitable with that of similar lands in the vicinity.

47To determine the amount of the adjustment, the Board finds that it is appropriate to multiplying the current value as determined above ($1,934,723) by the median ASR (0.91) which results in the equitable assessed value of $1,760,592 or $1,761,000 (rounded).

CONCLUSION

48For the reasons stated above and pursuant to s. 44.(3)(a) of the Act, the Board sets the current value of the property, as of the valuation day of January 1, 2016, at $1,934,723 and finds that there is evidence leading to the conclusion that the current value is not equitable relative to the assessments of similar lands in the vicinity and requires a further adjustment under s. 44.(3)(b) of the Act.

49Accordingly, for the 2017 taxation year, the assessment for the subject property is reduced from $1,860,000 to $1,761,000.