Chakraborty v. Municipal Property Assessment Corporation, Region No 3, 2018 CanLII 86681

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: September 10, 2018

FILE NO.: WR 154847

Assessed Person: Sudeshna Chakraborty and Santanu Chakraborty

Appellants: Sudeshna Chakraborty and Santanu Chakraborty

Respondent: Municipal Property Assessment Corporation (“MPAC”), Region No 3

Respondent: City of Ottawa

Property Location: 620 Queen Elizabeth Drive

Municipality: City of Ottawa

Roll Number: 0614-063-301-06700-0000

Appeal Numbers: 3291702 and 3269258

Taxation Years: 2017 and 2018

Hearing Event No. 702683

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

Heard: August 14, 2018 in Ottawa

APPEARANCES:

Parties Representative

Sudeshna Chakraborty and Santanu Chakraborty Self-represented

MPAC Jonathan Lapp

City of Ottawa No one appeared

DECISION OF THE BOARD DELIVERED BY SCOTT McANSH

1Sudeshna Chakraborty and Santanu Chakraborty have appealed the assessment of the property at 620 Queen Elizabeth Drive in the City of Ottawa on the basis that the assessment is too high. They say that the assessment does not adequately reflect the nuisances that impact the property including a busy overpass adjacent to the backyard, a public staircase adjacent to the property, and difficulty accessing the property.

2The property contains a large house with a view of the Rideau Canal that was extensively renovated in 2010. It was assessed at $1,927,000 for the 2017 taxation year and $1,750,000 for the 2018 taxation year. MPAC is arguing that the assessment should be reduced to $1,630,000 for both taxation years to reflect the nuisances that the property is exposed to. The Chakrabortys argue that the nuisances have a greater impact on value and that the assessment should be approximately $1,100,000.

3For the reasons that follow I find that MPAC has not met its statutory obligation to prove the correctness of the current value and the Chakrabortys have not provided evidence on which I can conclude that any particular current value is more likely than not. I therefore set the assessment for the 2017 and 2018 taxation years at the last uncontested value of $1,651,000. As a result I reduce the 2017 assessment from $1,927,000 to $1,651,000 and I reduce the 2018 assessment from $1,750,000 to $1,651,000.

Legislation

4Subsection 40(17) of the Assessment Act, RSO 1990, c A.31 (the “Act”) places the burden of proof on MPAC to prove the correctness of the current value. Clause 44(3)(a) of the Act requires the Assessment Review Board (“Board”) to “determine the current value of the land.” Current value is defined in section 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 subject property would have sold for in an arm’s length transaction on the relevant valuation day, set pursuant to s.19.3 of the Act, as January 1, 2016 for the 2017 and 2018 taxation years.

5Once I have determined the current value, clause 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.

Current Value

6The value of residential property is often determined by looking at what other similar property sold for near the valuation day. That is known as the direct comparison approach to value and is partially the method adopted by the parties here. However, both parties agree that there were no sales of properties that are directly comparable to this property, so that an adjustment of value is required. The disagreement between the parties is in the degree of reduction required.

7MPAC supports its opinion of value with the sales of five other properties in the same area of Ottawa. Those sales are:

Address

House Size (sq. ft.)

Effective Year Built

Sale Date

Sale Price

620 Queen Elizabeth Dr.

4,388

2008

1

35 Lakeside Dr.

3,518

2004

July 2017

$2,100,000

2

21 Dow’s Lake Rd.

2,861

2006

June 2017

$1,800,000

3

35 Down’s Lake Rd.

2,804

1984

July 2014

$1,085,000

4

8Lakeview Terr.

2,917

1969

Sept 2015

$1,500,000

5

25 Crescent Hts.

3,473

1999

July 2017

$1,815,000

8The Chakrabortys consulted four realtors about the value of their property. They submit somewhat detailed information that about five properties that sold in their neighbourhood. Those sales are:

Address

House Size (sq. ft.)

Effective Year Built

Sale Date

Sale Price

620 Queen Elizabeth Dr.

4,388

2008

6

34 Old Sunset Blvd.

1921

June 2016

$937,500

7

20 Old Sunset Blvd.

1924

Feb 2017

$1,060,000

8

16 Lakeside Ave.

Feb 2016

$972,500

9

20 Lakeside Ave.

2,600

2016

Aug 2017

$1,175,000

9MPAC points out that none of the homes presented by the Chakrabortys are close in size to their property. Even the largest home presented by MPAC is nearly 800 square feet smaller than the Chakrabortys’ property. The Chakrabortys’ property is also among the most recently and extensively renovated homes before me. All of that indicates that this property in this neighbourhood would likely sell for at least $2,000,000, if there were not negatively impacted by nuisance factors.

10The parties agree that there are nuisances that would impact the value of the property. They also agree that these are unique nuisances. The main nuisance is that the property abuts the Bronson Avenue overpass of the Rideau Canal. Bronson is a busy, four lane, road and the main route between Ottawa’s downtown and the Ottawa International Airport. The height of the overpass next to this property is between the second and third floors of the house. The Chakrabortys say that its presence takes away from their sense of privacy and makes it difficult to enjoy their backyard. There is also a public staircase, from the Canal up to Bronson, abutting the property. That is, there are people walking by with a view of the backyard, in addition to the noise of Bronson.

11The Chakrabortys say that there is another major nuisance in the access to the property. There are a series of one-way streets and limited access roads that make the route to the home convoluted. The Chakrabortys say that taxis and visitors, including one of realtors they consulted, have a difficult time getting to the property. They argue that this would also make potential buyers pay less for the property.

12MPAC argues that it accounted for these nuisances in its recommended value. It says that it applied an 8.5% reduction for the traffic impact of Bronson and that it also applied a 7% reduction for general nuisance. Its evidence was that the traffic reduction is taken from their model and that the 7% reduction is a discretionary amount applied by the assessor assigned to the file. It argues that the total reduction of 15.5% is a fair reduction in value to account for the nuisances and that their suggested current value of $1,630,000 is supported by that evidence.

13This Board recently held in Jay Patry Enterprises Inc. v Municipal Property Assessment Corporation, Region 05, 2019 CanLII 39629 (ON ARB), 2018 CanLII 70338 (ON ARB), (“Patry Enterprises”) at paragraph 22, that “determining whether MPAC has satisfied its evidentiary burden requires us to consider whether the evidence it has tendered can support its opinion of the correct current value.” The Board went on to say, at paragraph 23, that the “evidence must show how the current value MPAC is proposing is arrived at and why that value is correct.”

14The sales evidence indicates that the property likely would have sold for $2,000,000 if it were not impacted by Bronson and access issues. 15.5% of that value is $310,000, so if I accept MPAC’s percentage reductions for those nuisances the indicated a value of the property would be $1,690,000, which is very close to MPAC’s recommended value of $1,630,000. That would meet MPAC’s statutory burden, but requires that I accept 15.5% as more likely than not the best way to account for the nuisances.

15MPAC did not provide any evidence to support either adjustment. An assertion that its proprietary, non-disclosed, computer model provided a number is not evidence that this Board can rely upon. I cannot, therefore, put any weight on the 8.5% adjustment for traffic. The 7% adjustment, however, was an assessor’s opinion. Unfortunately, that assessor was not at the hearing, so could not answer questions about how he settled on that amount as the appropriate adjustment. Another assessor appeared at the hearing and could not explain how the opinion of 7% was arrived at. There was no explanation of why the impact was only 7% and not 20%, or any other value. MPAC assessors can be qualified to give opinions such as this on the value of land, but those opinions must be transparent and well explained. That is, MPAC can approach value through expert opinion, provided that the opinion is well grounded in the evidence and carefully explained. I do not find that providing unsupported percentage value adjustments is sufficient for MPAC to meet its statutory burden.

16I understand that there are inherent difficulties in valuing a uniquely situated property such as this, but that cannot remove MPAC’s legislated obligation to provide evidence that their suggested current value is more likely than not. The Board requires that any opinions on value come through tested expert opinion evidence, with a clear path from the evidence to the opinion of current value being offered. MPAC did not present that type of evidence here

17Patry Enterprises sets out, at paragraph 40, the next step to take when MPAC has not met its burden: “the taxpayer’s evidence must be analyzed to see if it is capable of proving that a particular current value is more likely than not.” The Chakrabortys’ evidence is primarily made up of the opinion of realtors that did not attend the hearing. They say that four separate realtors gave them opinions of value of just over $1,000,000. However, the documents submitted show that those opinions are based on the sales of homes that are much smaller than the Chakrabortys’ home. The realtors were not present to present alternative justifications of their opinions of value or to have those opinions tested in cross-examination. I do not find that I can draw any conclusion form the evidence submitted by the Chakrabortys. The evidence they provided lacked reliability. The realtors opinions were not transparent and do not align with the sales evidence provided by the Chakrabortys. As noted above, any expert opinions of value should be clear, based on the evidence, and tested by the other parties to the hearing. That was not done here.

18The evidence in the record as a whole must then be examined, see Patry Enterprises at paragraph 40. There is nothing in the evidence that points to any particular value. The only reasonable conclusion I can draw from the record is that the Chakrabortys’ property would likely have sold for something less than $2,000,000. There is no evidence before me that can prove a particular current value. Patry Enterprises directs that in this situation I “should fix the assessment at the last uncontested assessed value.”

19The last uncontested value of the Chakrabortys’ property was the returned assessment for the 2016 taxation year, which was $1,651,000. Given the lack of evidence of current value before me, I set the assessed value for the 2017 and 2018 taxation years at the 2016 assessment of $1,651,000.

Equity

20In Zarichansky v Municipal Property Assessment Corporation, Region 2, 2018 CanLII 70341 (ON ARB) this Board held that “an equity assessment is not necessary when MPAC has failed to discharge its burden.” I agree. I therefore decline to consider whether an assessment of $1,651,000 is equitable with the assessments of similar property in the vicinity.

CONCLUSION

21MPAC has failed to meet its obligation to prove the correctness of the current value. The Chakrabortys have also failed to provide sufficient evidence for me to say that any particular current value is more likely than not. I therefore reduce the assessment to the last uncontested value of $1,651,000 for the 2017 and 2018 taxation years.