Assessment Review Board
Commission de révision de
l’évaluation foncière
ISSUE DATE:
September 17, 2018
FILE NO.:
WR 151846
Assessed Person(s):
Oladayo Akinwumi Oladeji
Appellant(s):
Oladayo Akinwumi Oladeji
Respondent(s):
Municipal Property Assessment Corporation (“MPAC”)
Region 09
Respondent(s):
City of Toronto
Property Location(s):
311 Bay Street, Unit 4202
Municipality(ies):
City of Toronto
Roll Number(s):
1904-063-010-00265-0000
Appeal Number(s):
3069037, 3077291 and 3149804
Taxation Year(s):
2014, 2015 and 2016
Hearing Event No.:
694274
Legislative Authority:
Section 40 of the Assessment Act, R.S.O. 1990, c. A.31, as amended
Heard:
March 13, 2018 by telephone conference call
APPEARANCES:
Parties
Representative
Oladayo Akinwumi Oladeji
Chaney Morkill
MPAC
Katelyn Morrow
Charlene Kumar
City of Toronto
No one appeared
DECISION OF THE BOARD DELIVERED BY ANTHONY LaREGINA
PRELIMINARY MATTERS
1Katelyn Morrow, MPAC’s representative, requested a dismissal of the appeal on the grounds that Oladayo Akinwumi Oladeji (the “Appellant”) had not responded to any communication relating to the appeal including schedule of events, disclosure dates and mandatory meeting dates, etc.
2Chaney Morkill, representative for the Appellant, advised the Assessment Review Board (the “Board”) that he was retained at 4:30 p.m. on March 12, 2018, a day before the hearing, by the Appellant and requested that the hearing proceed on the basis that he was representing the Appellant. Mr. Morkill submitted that the Appellant, who lived overseas, was under the impression that the appeal was being handled by the management company of the Trump Tower that was retained to manage the entire property including the hotel. Mr. Morkill was retained by the hotel to represent only the hotel on their assessment appeals and at the time became aware that the appeals for the condominiums were proceeding to hearing without the Appellant’s presence. Mr. Morkill attempted to contact the owners who for the most part were overseas and was retained on this appeal less than 24 hours before the hearing.
3The Board proceeded with the hearing, rejecting MPAC’s motion to dismiss, on the grounds that a representative has been retained by the Appellant and is present at the hearing. Furthermore, it is clear that there has been a misunderstanding or lack of communication between the Appellant, who lives overseas, and the management company regarding the representation of the owners of the condominiums as it relates to these appeals. The Board considers this to be an extraordinary situation and not proceeding would be a denial of natural justice to the Appellant. Furthermore it is the Boards view that proceeding does not prejudice MPAC’s case in any way.
4Mr. Morkill requested that he be allowed to enter into evidence the sale of the subject property dated May 7, 2013, information relating to the performance of building, as well as evidence of similar units transacting at lower prices in the same building.
5Ms. Morrow objected to any additional evidence being allowed on the grounds that there was a full disclosure process including schedule of events and telephone conference call (TCC) prehearing which were not attended by the Appellant or the representative. Ms. Morrow submits that it would therefore be highly prejudicial to MPAC to allow new evidence at this late stage.
6The Board will admit the sale of the subject property based on s. 15.(1)(b) of the Statutory Powers and Procedures Act stating that the Board may admit as evidence at the hearing any document or other thing that is relevant to the subject-matter of the proceeding and may act on such evidence. The sale of 311 Bay Street, Unit 4202 (the “subject property”) which occurred in May 2013 is highly relevant to the current value of the subject property as of January 1, 2012 valuation date and therefore the Board will restrict Mr. Morkill to enter only the sale of the subject property into evidence. The Board agrees with MPAC that admitting any other evidence, including other sales in the building or financial performance, at this late stage in the process, would be prejudicial to MPAC.
INTRODUCTION
7The subject property is a one-storey residential condominium dwelling built in 2012. It is Unit 4202 in the tower at 311 Bay Street, which was originally known as the Trump Tower. Trump Tower is a high rise luxury condominium residence and hotel in the heart of the City of Toronto business district. The subject property has 10.5 foot ceilings and a total area of 1,445 square feet. The returned assessed value is $1,315,000 for the 2014, 2015 and 2016 taxation years. According to MPAC the returned value also has a built-in adjustment of -9% to reflect a northern exposure and -1% for each of poor view, abutting an elevator and garbage chute for a total adjustment of -12%.
8Charlene Kumar, the assessor from MPAC, provided the Board with an estimate of current value at $1,315,000 based on eight comparable property sales located in the same building as the subject property. Ms. Kumar presented an equity study with a 0.97 median Assessment to Sales Ratio (“ASR”) and suggested that the Board make no further equity adjustment. Ms. Morrow, the representative for MPAC therefore requests a confirmation of the returned assessed value of $1,315,000.
9Mr. Morkill is requesting a current value of $847,557 for the subject property which represents the sale price of the unit on the closing date of May 7, 2013. Mr. Morkill therefore requests that the Board reduce the returned value from $1,315,000 to $847,557 for the 2014, 2015 and 2016 taxation years.
ISSUES
10The issues to be determined are:
i.) What is the correct current value of the subject property for the 2014, 2015 and 2016 taxation year?
ii.) Is the current value as determined by the Board equitable with the assessments of similar lands in the vicinity?
DECISION
11The Board finds the current value of the subject property for the 2014, 2015 and 2016 taxation years to be $1,315,000.
12The Board determines that the current value requires a further negative adjustment of 6.1% in order to make the assessment of the subject property equitable with the assessments of similar lands in the vicinity.
13The Board will therefore reduce the returned assessment of the subject property from $1,315,000 to $1,266,000 for the 2014, 2015 and 2016 taxation years.
REASONS FOR DECISION
Current Value – Evidence and Analysis
14In accordance with s. 44.(3)(a) of the Assessment Act, R.S.O. 1990, c.A.31 (“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.”
15For the 2014, 2015 and 2016 taxation year, the Board must determine what the subject property would have sold for in an arm’s length transaction on the January 1, 2012 valuation day set by s. 19.2 of the Act.
MPAC’s Position
16Ms. Kumar presented eight comparable property sales located in the same building as the subject property. The median adjusted sale value per square foot for the eight comparable properties is $1,072.28
17Ms. Kumar also presented 11 sales of condominiums in the Four Seasons Hotel Toronto, 14 sales in the Shangri-La, Toronto and 11 sales in the Ritz-Carlton, Toronto buildings which she believes are all comparable to the subject property with median sale values per square foot of $1,466.30, $729.47 and $805.95 respectively for each building.
18Ms. Kumar concluded that the range of adjusted sale values per square foot for the comparable buildings is between $729.47 and $1,466.30 and that the median adjusted sale value per square foot of $1,072.28 for the 11 sales in the Trump Tower is very much within the reasonable range.
19Ms. Morrow submits that the current value of the subject property at $1,315,000 represents an assessed value per square foot of $910.03, a -15% adjustment from the median of $1,072.28, which more than compensates for the total -12% adjustments for view, northern exposure, as well as abutting the garbage chute and elevator.
20Ms. Morrow submits that the current value of the subject property should be set at $ 1,315,000 for the 2014, 2015 and 2016.
21In her summation, Ms. Morrow asserted that the sale of the subject property was rejected as a reasonable market value of the subject property because the agreement of purchase and sale between the builder and the Appellant was negotiated and signed in November 2005, which was eight years before the closing date of May 2013 and therefore not reflective of a January 1, 2012 valuation.
Appellant’s Position
22Mr. Morkill entered the sale of the subject property which closed in May 7, 2013 at a closing price of $847,557.
23Mr. Morkill acknowledged that the occupancy date was some time in 2012 and the unit was registered on closing May 7, 2013.
24Mr. Morkill could not confirm when the purchase price was negotiated between both the builder and the Appellant. Furthermore Mr. Morkill had no evidence to contradict MPAC’s claim that the builder sent a report to MPAC showing that the purchase price was negotiated in November 2005 at the same time the agreement was signed.
Board’s Analysis of Current Value
25The best evidence of current value is the sale of the subject property on or near the valuation date of January 1, 2012. 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.
26The Board is in agreement with MPAC that the sale of the subject property was negotiated in November 2005 and therefore does not represent the current value of the subject property as of January 1, 2012. The Board therefore rejects the sale of the subject property for the purposes of establishing the current value as the closing date of the sale actually took place in May 2013 based on a 2005 negotiated price.
27The Board is also in agreement with MPAC that even though there were sales entered into evidence from the Shangri-La, Toronto, Four Seasons, Toronto and the Ritz-Carlton, Toronto, the best evidence are the sales located in the Trump Tower at 311 Bay Street, the location of the subject property.
28The Board analyzed the sales evidence from the Trump Tower and concludes that of the eight comparable condo sales, there are three which are similar in building area to the subject property, unit 4503 at 1,563 square feet, unit 4203 at 1,543 square feet, and unit 3506 at 1,310 square feet. The mean sale value per square foot of these three comparables is $1,060.51 which is slightly below MPAC’s median sale value per square foot for all eight sales at $1,072.28.
29The Board will use the mean value of the three most similar condominiums to establish the current value of the subject property therefore taking $1,060.51 and applying it to the building area of the subject property of 1,445 square feet to reach a current value of $1,532,441.
30The Board agrees with MPAC that factors such as poor view, proximity to garbage chute or elevator may have an impact on the Current Value but are difficult to quantify the impact on value. MPAC has suggested that a 12% impact on value is appropriate. With no other evidence to quantify the effect of these factors the board will accept a 12% adjustment for proximity to the garbage chute, elevator as well as poor view and northern exposure therefore bringing the current value to $1,348,548.
31The Board finds that the current value of the subject property is $1,348,548.
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 property in the vicinity is assessed below its current value. If other properties are assessed below their current values, a reduction in the assessment below current value may 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.
34Ms. Kumar presented an equity analysis of 35 condominium sales in the Trump Tower that occurred from January 1, 2011 to December 31, 2012 resulting in a median ASR of 0.95. In addition Ms. Kumar also entered similar equity studies for each of the three other properties, the Four Seasons, Toronto, Ritz-Carlton, Toronto and the Shangri-La, Toronto, with median ASR’s of 0.99, 1.0 and 0.97 respectively. Ms. Kumar submits that the median ASR for the four towers is 0.97 and 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 of 0.97 falls inside of the range therefore, Ms. Kumar has recommended no adjustment to the current value.
35The Board concludes that the best evidence in relation to equity is the sale and assessment evidence of the 35 properties presented by MPAC located in the Trump Tower which is the same building as the subject property. MPAC has determined that the median ASR is 0.95 for the 35 property sales. The Board prefers to use the mean ASR of 0.939 which is a much better measure of central tendency than the median. In Jay Patry Enterprises Inc. v Municipal Property Assessment Corporation , Region 05, 2019 CanLII 39629 (ON ARB), 2018 CanLII 70338 (ON ARB) the Board clearly stated that “means are the strongest and most reliable metric of central tendency in a data set”. I agree.
36Based on the mean ASR of 0.939 the Board finds that a further adjustment of 6.1% is required to the Current Value of the Subject Property from $1,348,548 to $1,266,286 in order to ensure that assessment is equitable with the assessment of similar properties in the building.
CONCLUSION
37The Board finds that the current value of the subject property of $1,348,548 for the 2014, 2015, and 2016 taxation years requires a further adjustment to $1,266,000 to ensure the assessment is fair and equitable. The Board reduces the assessment of the subject property from $1,315,000 to $1,266,000 for the 2014, 2015 and 2016 taxation years.
“Anthony LaRegina”
ANTHONY LaREGINA
MEMBER
Assessment Review Board
A constituent tribunal of Environment and Land Tribunals Ontario
Website: www.elto.gov.on.ca Telephone: 416-212-6349 Toll Free: 1-866-448-2248```