Thomas Pobojewski v. Municipal Property Assessment Corporation, 2018 CanLII 89430

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: September 19, 2018

FILE NO.: WR 152294

Assessed Person(s): Thomas Pobojewski

Appellant(s): Thomas Pobojewski

Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 15

Respondent(s): Town of Oakville

Property Location(s): 2223 Providence Road

Municipality(ies): Town of Oakville

Roll Number(s): 2401-010-030-90056-0000

Appeal Number(s): 3256737 and 3304321 (deemed 2018 appeal)

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

Hearing Event No. 695764

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

Heard: March 22, 2018 in Toronto, Ontario

APPEARANCES:

Parties

Representative

Thomas Pobojewski

Robert Baranowski

MPAC

Asoka Jayalath Roger Leroux

Town of Oakville

Susan Price

DECISION OF THE BOARD DELIVERED BY DAN WEAGANT

INTRODUCTION

1Thomas Pobojewski (the “Appellant”) appealed the 2017 assessment of the subject property at 2223 Providence Road because he believed the value returned by MPAC was too high. The Appellant also believes the assessment of the subject property should be $880,000 when compared to the sales of comparable properties and the assessments of similar lands in the vicinity.

2MPAC returned a value of $965,000 for the subject property. In preparation for the hearing, MPAC determined an estimate of current value, based on the sales of comparable properties. This estimate of current value was $1,136,000. According to MPAC, this value was not intended as evidence of a higher assessment, but was submitted in support of the value returned. No notice for higher assessment, in accordance with Rule 40 of the Assessment Review Board’s (the “Board”) Rules of Practice and Procedure was filed by MPAC.

3The Board must decide two things in this appeal. Firstly, the Board must determine, based on the evidence at the hearing, the current value of the subject property for the 2017 taxation year.

4Having reference to the assessments of similar landss in the vicinity, the Board must also decide if the current value determined needs to be reduced for the purpose of equitable assessment.

5Section 40.(26) of the Assessment Act, (“Act”) states 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 did not dispose of the 2017 appeal before March 31, 2018. For that reason, this decision also applies to the 2018 taxation year.

DECISION

6The Board finds that the current value of the subject property is $1,068,000. The Board also finds that a reduction in the current value is required for the assessment to be equitable with the assessments of similar lands in the vicinity. The assessment is therefore reduced to $1,012,000.

7As MPAC failed to give notice to the Board and the other Parties, under Rule 40 of the Board’s Rules of Practice and Procedure, of its intention to raise a change in assessment that would result in higher taxation, the Board finds that the assessment of the subject property, at 2223 Providence Road, is confirmed at $965,000 in the Residential property class, for the 2017 and deemed 2018 taxation years.

LEGISLATION

8In making its determination of these appeals, the Board must consider the relevant sections of the Act.

9Section 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.

10Section 19.(1) of the Act states:

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

11Section 40.(1) of the Act states:

40.(1) Appeal to Assessment Review Board. Any person, including a municipality, a school board or, in the case of land in non-municipal territory, the Minister, may appeal in writing to the Assessment Review Board,

(a) on the basis that,

(i) the current value of the person’s land or another person’s land is incorrect,

(ii) he person or another person was wrongly placed on or omitted from the assessment roll,

(iii) the person or another person was wrongly placed on or omitted from the roll in respect of school support,

(iv) the classification of the person’s land or another person’s land is incorrect, or

(v) or land, portions of which are in different classes of real property, the determination of the share of the value of the land that is attributable to each class is incorrect; or

(b) on such other basis as the Minister may prescribe.

12Section 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.

What is the Current Value of the Subject Property?

MPAC’s Evidence

13MPAC provided a valuation report that sought to provide a range of value that the subject property would reasonably fall within. The valuation report compared the subject property with five properties that sold between May 2015 and August 2016. All five properties are located in the same general neighbourhood, with four of them within 255 metres of the subject property and the fifth on the same street as the subject property.

14When making comparisons to the subject property, MPAC applies a Time Adjustment Factor (“TAF”) to each sale value. The TAF is used to adjust the sale price so that it more closely reflects the value at which the properties would have sold on the valuation day of January 1, 2016. The TAFs used in this case were derived from a ‘time changes over time’ study that used 307 sales of residential properties in the area that took place in 2015 and 2016. A TAF for each month in the time period is applied to sales in that month to arrive at a Time Adjusted Sale (“TAS”) value.

15The five proposed comparable properties submitted by MPAC have TAS values ranging from $1,072,015 to $1,317,695. In MPAC’s opinion, this provides a range within which the current value of the subject property should reasonably lie, allowing for value reductions related to its location and exposure to traffic. MPAC’s conclusion was that a reasonable current value of the subject property is $1,136,000, and that the returned value of $965,000 should be confirmed.

Town’s Evidence

16The Town of Oakville (“Town”) submitted a brief comparison report that compared the subject property with four of the five comparable properties submitted by MPAC. The Town noted that all of the per square foot TAS values of its four proposed comparable properties in evidence are higher than the assessment value per square foot of the subject property. This led the Town to the conclusion that, by comparison to the four most comparable properties it could find, the current value assessment of the subject property of $965,000, is reasonable.

Appellant’s Evidence

17Robert Baranowski, representing the Appellant, took issue with MPAC arriving at an opinion of current value that was higher than the returned value. He viewed this as an attempt by MPAC to make a case for a higher assessment without giving the notice required to do so in the Act. In cross-examination, MPAC’s assessor repeated the portion of MPAC’s opening remarks where it was clear that the higher opinion value was only advanced to show that the returned value was reasonable.

18The Appellant’s position is that the March 2013 sale of the Subject Property, time adjusted to the January 1, 2016 valuation date, is a means of determining its current value. Without a specific time adjustment factor, the Appellant suggested a TAS value of $976,000.

19An alternative method of determining current value submitted by the Appellant is to simply accept MPAC’s assessment of $965,000. Alternatively, the Appellant suggests that the median non-adjusted sale values, or TAS values of MPAC’s five proposed comparable properties could be used to arrive at alternative current values of $1,200,000 or $1,159,000, recognizing that these values would be reduced by applying a median Assessment to Sales Ratio (“ASR”) as the submissions of all the Parties support a reduction for the purposes of equitable assessment. Mr. Baranowski concluded that his client prefers the TAS value of the Subject Property of $976,000, provided that a reduction is applied for the purposes of equity.

The Board’s Analysis

20MPAC’s submissions did not include any data to show how adjustments were made for the differences between the five comparable in evidence and the subject property. The Board does accept the TAS amounts applied by MPAC to their five proposed comparable properties, as this time adjusted model was the only evidence supporting time adjustment factors at the hearing.

21The Board disregards the Appellant’s submission, that the TAS value of the 2013 sale of the Subject Property represents the best indicator of current value as of the valuation day. This assertion was advanced without any evidence as to what the time adjustment should be. None of the Appellant’s data applied to the sale value results in a value of $976,000.

22The Board disregards MPAC’s proposed comparable 5. Despite it being in close proximity to the subject property, comparable 5 is three years newer and 289 square feet smaller than the subject property. It also has a swimming pool, whereas the subject property does not. MPAC applied an ‘abuts green space’ variable to Comparable 5, resulting in a range of differences between it and the subject property that are not possible to correct for, given the evidence at the hearing.

23The Board disregards MPACs proposed comparable 1. Comparable 1 is 311 square feet smaller than the subject property. The Board also disregards MPAC’s proposed comparable 4 as it has a finished basement, whereas the subject property does not. There was no evidence at the hearing as to what the value of this finished basement would represent.

24The Board finds that the most comparable properties in evidence are proposed comparable properties 2 and 3, submitted by MPAC and the Town of Oakville.

25Proposed comparable 2 is a slightly smaller dwelling, with a slightly larger basement and was constructed in the same year as the subject property. Proposes comparable 3 is very similar to proposed comparable 2, except that it was built four years earlier. The TAS values of Comparables 2 and 3 are $1,138,325 and $1,072,015 respectively, representing a median per square foot TAS value of $429.56. When this value is applied to the subject property’s living area of 2,644 square feet, the result is $1,135,756 or $1,136,000 rounded.

26Through testimony from MPAC and cross examination, the Board heard that the subject property has three variables that serve to reduce its value as compared to the comparable properties in evidence. It abuts a public walkway, a super mailbox, and light traffic. These variables do not apply to proposed comparable properties 2 or 3. The combined adjustments for these three variables, according to MPAC, is – 6% in total; 0% for the walkway, -1% for the mailbox and -5% for the proximity to light traffic. These value adjustments were not refuted by the Appellant.

27When the adjustments for the abutting characteristics applicable to the subject property are applied to the median TAS value derived from Comparables 2 and 3 above, the result is $1,067,840. The Board finds the current value of the subject property is $1,068,000 (rounded).

When reference is made to the assessments of similar properties in the vicinity, should the current value determined be reduced to make it equitable?

28The Appellant submitted that the assessment returned does not reflect an equitable assessment when it is compared to the assessments of similar properties in the vicinity.

29To account for this inequity, the Appellant submitted that the median ASR of the five proposed comparable properties submitted by MPAC should be applied to the current value (defined by the Appellant as the returned value). This median ASR is 0.878 and when applied to the returned value of $965,000, results in a reduced value of $847,270.

30Alternatively, the Appellant submits, the $976,000 submitted as a TAS value of the subject property, with the 0.878 ASR applied results in a value of $856,928, reduced for the purposes of equitable assessment. The Appellant submitted either result is appropriate.

31MPAC submitted an equity analysis that compared the TAS values of 30 single-family dwellings to their respective assessments. MPAC testified that these properties are all in the vicinity of the subject property, and that a map produced to illustrate their proximity demonstrates this fact.

The Board’s Analysis

32In order to reduce the amount of the current value for the purposes of equity or fairness, the Board has to reduce a correct finding to one that is incorrect. In order to so, the Board must have sufficient evidence to suggest the current value determined should be reduced to be fair.

33MPAC’s equity analysis included 30 properties, including the five comparable sales in their valuation report. The concept of similarity as it applies to the consideration of sales in determining equity is less burdensome than the same comparison for the purpose of determining current value. The concept of equitable assessment is intended to reflect that, on a balance of probabilities, it is reasonable to infer that properties in the same classification are generally sharing the assessment and tax burden fairly.

34MPAC submitted that the chief issue for the Board to decide with respect to the equity question was which median ASR to apply to the current value determined. All Parties agreed that the median ASRs of the sample in evidence indicate that similar properties in the vicinity are in fact under assessed, when their assessments are compared to their current values, as determined by sales. MPAC further submitted that their equity analysis was most suitable for the purpose of determining the level of assessment because it compared the assessments and sale values of 30 properties including the five properties in the valuation report. It further submitted that these 30 properties included the five in the valuation report which were relied upon by the Appellant for developing a level of assessment. MPAC’s position was that a 30 property analysis is statistically superior to a five property analysis.

35The Board finds that the best evidence of whether or not the current value determined represents equitable assessment is that of MPAC. Its equity study included the assessments and sales of 30 similar single-family dwellings from the vicinity of the subject property, with the result that the median assessment was 94.8% per cent of its TAS price. The equity study concluded that, in order for the assessment of the subject property to be equitable, its current value as determined above should be reduced by 5.2%.

36When this reduction is applied to the current value determined, the resultant assessment for the subject property is $1,012,464 or $1,012,000 rounded.

CONCLUSION

37The Board finds that the current value of the subject property is $1,068,000. The Board also finds that a reduction in the current value is required for the assessment to be equitable with the assessments of similar properties in the vicinity. The assessment is therefore reduced to $1,012,000.

38As MPAC failed to give notice to the Board and the other Parties, under Rule 40 of the Board’s Rules of Practice and Procedure, of its intention to raise a change in assessment that would result in higher taxation, the Board finds that the assessment of the subject property, at 2223 Providence Road, is confirmed at $965,000 in the Residential property class, for the 2017 and deemed 2018 taxation years.