Assessment Review Board

Commission de révision de l'évaluation foncière

ISSUE DATE: September 04, 2018

FILE NO.: WR 151095

Assessed Person(s): WMJO Limited

Appellant(s): WMJO Limited

Respondent(s): Municipal Property Assessment Corporation ("MPAC") Region 23

Respondent(s): City of London

Property Location(s): Unit 95, 1199 Hamilton Road

Municipality(ies): City of London

Roll Number(s): 3936-040-630-23523-0000

Appeal Number(s): 3176957 and 3312660 (deemed 2018 appeal)

Taxation Year(s): 2017 and 2018 (deemed appeal)

Hearing Event No.: 690367

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

Heard: January 17, 2018 in London, Ontario

APPEARANCES:

Parties	Representative
WMJO Limited	John Camara, John Martin
MPAC	William Somerville, Jeff Langford
City of London	No one appeared

MEMORANDUM OF ORAL DECISION DELIVERED BY LESLIE FLEMMING ON JANUARY 17, 2018

INTRODUCTION

1Unit 95 at 1199 Hamilton Road is a single residential condominium unit in the Middlesex Condominium Plan 500, Level 1, Unit 9. The condominium is owned by WMJO Limited and rented to tenants. Two representatives of WMJO Limited, John Camara and John Martin, attended the hearing to provide evidence on behalf of the corporation. MPAC was represented by William Somerville and Jeff Langford. Mr. Langford gave evidence on behalf of MPAC.

2This individual condominium unit was assessed at $155,000 for the 2016 base year. MPAC submitted that this was the correct current value for the unit. The Appellants submitted that the value assessed for this unit during the last assessment cycle, the amount of $143,000, was the correct current value. The taxation year under appeal is 2017.

3The Municipality is a statutory party to every appeal under the Assessment Act ("Act"). In this case, no one attended for the City of London.

PRELIMINARY MATTERS

4The representatives for MPAC and the Appellant agreed at the start of the hearing that the appeal had been incorrectly filed as a 2016 taxation year appeal. The Appellant confirmed that it had actually intended to appeal the 2017 taxation year. At the hearing, the Appellant and MPAC consented to a change in the Appeal to the 2017 taxation year. Also, the current value under appeal was $155,000, rather than the value of $143,000, which had been the current value assessment for the previous cycle.

5A second issue arose when the Appellant's representatives attended the hearing without having filed any documentary evidence in advance. MPAC objected to their participation in the hearing. However, this appeal is a summary proceeding before the Assessment Review Board ("Board") and the rules governing the conduct of proceedings are contained in the Rules of Practice and Procedure ("the Rules") effective April 1, 2017. Schedule B to the Rules applies to summary proceedings and provides that, "Where a hearing has been requested, the parties must file with the Board all documents and any written submissions on which they will rely at the hearing."

6The Appellants disclosed that they had not planned to file any documents.

7Clearly, it is the right of the Appellant, or any other party to a proceeding, to attend the proceeding, to cross-examine the other parties, and to give oral testimony if relevant and probative in the Board member's opinion. A party is entitled to make its case based on its oral evidence, and submissions based on all of the evidence adduced at the hearing.

ISSUE

8The issue to be determined on this appeal is what is the correct current value of the subject property for the taxation year 2017?

9Once the Board makes a finding in respect of the correct current value for the subject property, s. 44.(3)(b) of the Act requires it to have reference to the values at which similar properties in the vicinity have been assessed, and to reduce the current value of the subject property if it would be equitable to do so. In this proceeding, the Appellant did not raise this issue and submitted no evidence in respect of equity. The Board is therefore not required to consider this ground of appeal.

10MPAC has the burden of proving that the current value is correct. Section 40.(17) provides as follows:

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.

EVIDENCE

MPAC'S Evidence

11Jeff Langford, a Property Valuation Analyst, testified for MPAC. He submitted a copy of his Valuation Report and Equity Analysis Report.

12Mr. Langford described the subject property as a residential condominium, two storeys tall, built in 2002, to which he assigned a construction quality rating 6 out of 10. His report includes a photograph which shows a townhouse type residence with a garage, described by Mr. Langford as a detached garage. The residence is 1,326 square feet in size, and has 1.5 baths and three bedrooms. The Valuation Report indicates that the townhouse has no arm's length sales by which its value could be determined.

13MPAC chose to use the comparable sales method to establish the current value of the subject property. Because none of the units in Condo Corporation 500 had been sold on the open market, all the proposed comparable condominium unit sales were from neighbouring condominium corporation No. 229. All six units were the same size as the subject property (1,326 square feet) and all had the same number of bathrooms and bedrooms as the subject property. They had been built 12 years earlier than the subject property. They sold on the open market as freehold homes, and the six sales took place between August, 2015 and June 2017.

14The Valuation Report identifies these six proposed comparable properties and indicates the adjustment to the value of those sales based on price changes over time. The Report describes the method of calculating the "time adjusted sale price", which was based on 36 sales of similar units over a period of 28 months, as well as the time adjustment factors for each month in which sales occurred. Based on this information, MPAC concluded that the overall change in market value was 6.22 per cent from March 13, 2015, to July 12, 2017. This change in market value was not challenged by the Appellant.

15The Valuation Report explains how the comparison of open market sales of similar properties can assist in the establishment of a current value of a subject property. At page 9 it states:

"Selecting sold properties inferior, superior and similar to the subject property also allows me to establish a probable range of current value for the subject property by bracketing the subject between sold properties that are inferior and superior to it."

16Mr. Langford described the methodology of the direct comparison of sales, and his Report included statistics about the selected properties. The Report confirms that all six properties chosen for comparison were identical in size to the subject property, and that, like the subject property, all had 1.5 bathrooms and three bedrooms.

17The time-adjusted sales prices of the six units were as follows:

Unit 58 - $151,897 Unit 65 - $144,843 Unit 66 - $146,636 Unit 66 - $147,171 Unit 47 - $141,067 Unit 45 - $131,213

18All six units were located at 1199 Hamilton Road. There are five separate units; however Unit 66 sold two times during the time period under consideration. Mr. Langford concluded that these six sales indicated that the current value of the subject property was reasonable and supportable at $155,000.

Evidence for the Appellant

19Evidence for the Appellant was primarily given by Mr. Camara. Mr. Martin gave some additional evidence by way of clarification. The Appellant representatives described the location of the subject property near the Pottersburg Creek, a small stream flowing along one side of the condominium complex. The Creek is bordered by a gabion wall, which is a barrier comprised of steel mesh baskets filled with stone. This wall retains the water and prevents erosion of the stream bank. It provides a barrier to prevent flooding of the surrounding lands.

20Mr. Camara described the failure of the gabion wall near the condominium complex in 2003. The particulars of the gabion wall collapse are contained in another decision of this board: 1510231 Ontario Ltd. v. Municipal Property Assessment Corp., Region No. 23, [2015] O.A.R.B.D. No. 119. In that appeal, the Board had been dealing with units at 1203 Hamilton Road. Mr. Camara emphasized that the gabion wall had never been repaired, which could ultimately lead to another episode of flooding in the 1199 Hamilton Road complex in the event of excessive water flow in the Pottersburg Creek as had occurred in 2003. In cross-examination, Mr. Camara confirmed that the flooding had not been close to the subject property, but that it had caused problems for people residing in the unit in that the flooding interfered with road access. The Appellants indicated that, as long as the gabion wall remained unrepaired, there was a potential for flooding that could interrupt normal road access to the subject property by both residents and service vehicles, as well as by emergency vehicles.

21The Appellants did not have a sketch or diagram of the subject property and its location in connection with the Pottersburg Creek. However, Mr. Langford provided an aerial photograph which showed the condominium complex and the creek.

22On cross-examination, Mr. Camara was asked if the flooding that occurred during the gabion wall collapse had been near to or affected the subject property directly. His reply was "no".

ANALYSIS

23In order to make use of comparable properties, there must be sufficient points of comparison between the subject property and the proposed comparable properties. In this case, while the evidence established that the comparable units were all the same size as the subject property, with the same number of bedrooms and bathrooms, they were described as 12 years older. There was no other explanation detailing what characteristics or effects the age difference might have on design, quality, layout, materials or any other aspects of these townhouses. Furthermore, neither the documentary evidence nor Mr. Langford's testimony provided an opinion as to the quality of construction of the six proposed comparable properties. Mr. Langford offered no specifics which might account for the different sale prices of these seemingly identical units. Nor did Mr. Langford make mention of the issue with the continuing lack of repair of the gabion wall and its effect, if any, on the value of both the subject property and the six proposed comparable properties.

24When applying the time adjustments to the sale prices, none of the proposed comparable sales would appear to be in any way superior to the subject property. All six time-adjusted values are lower than the current value assessment given the subject property. Therefore, the Board finds that it is impossible to apply the "bracketing" technique described above in order to test the correctness of the subject property's assessment. There is simply too little information about the six proposed units and no means of judging inferior, superior or similar units in the materials and evidence provided. In fact, because all six units were lower in value than the subject property as of the valuation day, the only available conclusion is that the value of the subject property would also be lower than $155,000.

25Evidence provided by the Appellants was not at all helpful. While the description of the history of the gabion wall collapse and the ensuing litigation provides background about the location of the subject property, the Appellants put forth no comparable sales to contrast with MPAC's choices, nor any other evidence to assist the Board in determining the current value of the subject property. Despite the long history of the gabion wall problems, the six sales provided by MPAC as possible comparable properties confirm that townhouses similar to the subject property continue to sell in this neighbourhood, and provided a range of values for similar properties to the subject property.

26The best evidence available, and in fact the only evidence available, is the evidence of the six freehold townhouse sales provided by MPAC. The five properties comprising the six sales were all built in 1990, and all are identical in size to each other and to the subject property. The sales took place between August 7, 2015, and June 26, 2017. There is a complete lack of distinguishing features among these proposed comparable properties. As such, the Board finds that the average of the six time-adjusted sales is a reasonable approach to determine a current value for the subject property. The average value of the six comparable sales is $143,805, which the Board rounds to $145,000.

CONCLUSION

27The current value of the subject property is reduced from $155,000 to $145,000 for the 2017 taxation year and the deemed 2018 taxation year.

2018 DEEMED APPEAL

28An appeal for the 2017 taxation year is presently before the Board. Section 40.(26) of the Assessment Act provides that the appellant is deemed to have made the same appeal for the subsequent taxation year if the appeal is not finally disposed of before March 31 of the subsequent taxation year. The Board has not disposed of the 2017 appeal before March 31, 2018. For that reason, this decision also applies to the 2018 taxation year.

29Section 40.(26) of the Act directs:

Deemed appeals, 2009 and subsequent years

(26) For 2009 and subsequent taxation years, an appellant shall be deemed to have brought the same appeal in respect of a property,

(a) in relation to the assessments under sections 32, 33 and 34 for the year; and

(b) in relation to the assessment, including assessments under sections 32, 33 and 34, for a subsequent taxation year to which the same general reassessment applies, if the appeal is not finally disposed of before March 31 of the subsequent taxation year or, if an assessment has been made under section 32, 33 or 34, before the 90th day after the notice of assessment was mailed.