Loretta Becker v. Municipal Property Assessment Corporation, 2018 CanLII 82041

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE:

August 27, 2018

FILE NO.:

WR 154646

Assessed Person(s):

Loretta Becker

Appellant(s):

Loretta Becker

Respondent(s):

Municipal Property Assessment Corporation (“MPAC”)

Region 32

Respondent(s):

City of Thunder Bay

Property Location(s):

1607 Cumming Street

Municipality(ies):

City of Thunder Bay

Roll Number(s):

5804-040-162-13000-0000

Appeal Number(s):

3262171 and 3315002

Taxation Year(s):

2017 and 2018

Hearing Event No.:

700973

Legislative Authority:

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

Heard:

July 26, 2018 in Thunder Bay, Ontario

APPEARANCES:

Parties

Representative

Loretta Becker

Self-represented

MPAC

Jodene Wylie

City of Thunder Bay

No one appeared

MEMORANDUM OF ORAL DECISION DELIVERED BY LESLIE FLEMMING ON JULY 26, 2018

INTRODUCTION

11607 Cumming Street (“subject property”) is a single-family detached home in the City of Thunder Bay. The assessment returned is for $105,000 for the 2017 taxation year and $102,000 for the 2018 taxation year, and it is these value that are under appeal.

2The residence is located on a dead end street that backs onto the Neebing River. The site area is separated from the river by a fence; it is not a waterfront property. The home itself is 1,280 square feet (“sq. ft.”) in size, consisting of two-storeys, and a site area of 0.09 acres. It has an unfinished basement of 960 sq. ft.

3The home was built in 1925 and renovated in 1985. MPAC considers the effective year built as 1963. It has two bedrooms and one bathroom.

4This issue before the Assessment Review Board (the “Board”) today is the current value of this home in light of the poor condition of its foundation and the fact that it sits too close to the property line. The owner asserts that, if the home was to be substantially renovated as required, it would also need to be moved, and this presents a potentially extraordinary cost to the owner.

Legislation

5Section 1 of the Act states:

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.

6Section 19.(1) of the Act states:

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

7Section 19.2(1) of the Act states:

19.2(1) Valuation days – Subject to subsection (5), the day as of which land is valued for a taxation year is determined as follows:

For the period consisting of the four taxation years from 2017 to 2020, land is valued as of January 1, 2016.

8Section 40.(17) of the Act states:

40.(17) 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.

9Section 44.(3) of the Act states:

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.

Issue: What is the current value of the subject property as of January 1, 2016, the valuation day, for the 2017 and 2018 taxation years?

MPAC’s Evidence

10Jodene Wylie testified to the history of the assessment of the subject property during the current cycle. She noted that Loretta Becker had appealed her assessment during the last assessment cycle and obtained a reduction in the assessed value. In the current cycle, Ms. Wylie assessed the home prior to carrying out an inspection; this resulted in a change in value from a current value of $133,000 to $105,000 for 2017 and $102,000 for 2018.

11MPAC uses the direct sales comparison method of valuing residential property. In this case, Ms. Wylie provided the Board with sales information relating to six comparable homes in the vicinity. Like the subject, the comparable homes were two-storeys each, with no split levels, and “average” construction quality of either 4.5 or 5.0 out of 10. Ms. Wyllie indicated that the Becker home was given a construction quality rating of 4.5 due to the foundation problems.

12Of the six homes selected for comparison, Ms. Wylie conceded that none were in as poor condition as the subject. Only one had a construction quality rating of 4.5; this was 528 Brodie Street North in Thunder Bay. This home was assessed at $103,000, and sold in March, 2015, for $105,000. All of the homes used for comparison were built between 1902 and 1910, but all had undergone some measure of improvement to give them effective years built ranging from 1940 to 1983. All of the six comparable homes were built on small city lots ranging from 0.04 to 0.09 acres.

13Ms. Wylie explained the concept of adjusting sale prices to make them effective as of the valuation day, January 1, 2016. Using 534 residential property sales from January 1, 2014, through December, 2016, Ms. Wylie was able to gauge the changes in the market during those months. She provided the sale dates and values for his six comparable properties and then adjusted each sale to make it current with the valuation day. Using the actual sales figures, which ranged from $105,000 to $155,000, the average sale price of all six homes was $131,000. Using the time-adjusted sales prices, the average value of the six homes was $132,000. Ms. Wylie arrived at a slightly higher value for the subject property ($133,000), but then reduced it by $28,000 to arrive at $105,000. It was after this that Ms. Wylie had an opportunity to view the subject property.

14Ms. Wylie testified that she reduced the assessment from $105,000 to $102,000 once she had seen the property and had reduced the construction quality to 4.5. However, after viewing the property she was also convinced to apply the amount of $60,000 in the nature of a “cost to cure”. The resulting value, which she recommends this Board accept, is her current value assessment of $133,000 minus a cost to cure of $60,000 for a current value of $73,000.

Appellant’s Evidence

15Ms. Becker testified on her own behalf. She described the home as having major structural issues arising from the deterioration of the foundation. In 2009 Ms. Becker obtained two estimates of the cost to repair the home from Superior North Contracting and from Enzo D’Angelo General Contracting. These two estimates were prepared on Work Description Forms provided by the “Northern Home Repair Program”, and they are dated March 15, 2009 and March 13, 2009 respectively. Ms. Becker testified that she had hoped to take advantage of a financial program available at the time to assist homeowners in carrying out essential repair work in their homes. The Superior North Contracting estimate came in at $55,800 before taxes and the Enzo D’Angelo estimate was for $65,000 before taxes. The work outlined on the forms was identical, and involved excavating the foundation, making repairs to the foundation, installing beams and floor supports and levelling all floors, along with all of the other requirements to ensure adequate protection from the entrance of water into the foundation. The estimates included the replacement of sub-flooring and obtaining an Electrical Safety Authority inspection. The job was not to include moving the house or carrying out any demolition work. Ms. Becker testified that the repairs required were so extensive that her application to the Northern Home Repair Program was denied.

16At a previous hearing before this Board in 2013 (WR 129087) Becker v. Municipal Property Assessment Corp. Region No. 32, [2015] O.A.R.B.D. No. 31, Member Dan Weagant reduced the value of the home by the cost to cure, which he obtained by averaging the costs outlined in the two estimates described above (before taxes). The Board ordered that the current value of the home be reduced by $60,000. Ms. Becker provided a copy of the decision to the Board.

17Ms. Becker confirmed in her evidence that the repairs had not been carried out and that the home is, if anything, in a worse state of repair than it was five years ago. However, she has not had any further estimates carried out. However, she seeks to have the cost to cure carried forward.

Board’s Analysis

18The best evidence of value is the sale of the subject property. There is no recent sale of the subject property, and so the Board looks to the sales of similar properties in the vicinity to determine current value. In a case such as this one, where compelling evidence of deterioration in the repair of the subject property detracts from the potential sales value, the Board can take these factors into consideration.

19The Board is bound by the best evidence before it. In this case, MPAC confirmed the poor condition of the subject property, and did not object to the Appellant’s use of the somewhat outdated repair estimates. Having seen the state of the home herself, Ms. Wylie applied the entire cost to cure that had been applied by this Board in a previous hearing, resulting in a current value of $73,000.

20The Board found that none of the evidence given related to Ms. Becker’s contention that the home is sitting too close to the property line and must be moved. In the absence of evidence on this point, the Board finds that the requirement of the “cost to cure” is to cover the cost of repairing the foundation of the home and the attendant costs of repairing floors and wiring that would be affected by the repair.

21Ms. Becker did not bring any additional evidence to the hearing. She did not provide any evidence or testimony on the issue of equity.

CONCLUSION

22The current value of the subject property is $73,000, as of January 1, 2016, for the 2017 and 2018 taxation years. There is no requirement to reduce the current value on the ground of equity.