Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: October 11, 2018

FILE NO.: WR 155844

Assessed Person(s): Tony Ravenda, Allana Oliver

Appellant(s): Tony Ravenda, Allana Oliver

Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 18

Respondent(s): City of Port Colborne

Property Location(s): 17 Tennessee Avenue

Municipality(ies): City of Port Colborne

Roll Number(s): 2711-010-017-00310-0000

Appeal Number(s): 3309317 and 3274058

Taxation Year(s): 2017 and 2018

Hearing Event No. 703597

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

Heard: September 6, 2018 in Port Colborne, Ontario

APPEARANCES:

Parties	Representative
Tony Ravenda	Self-represented
MPAC	Sheryl McRoberts
City of Port Colborne	No one appeared

DECISION OF THE BOARD DELIVERED BY JOANNE LAWS

Background

1Tony Ravenda and Allana Oliver (“the Appellants”) are the owners of 17 Tennessee Avenue (the “Subject Property”), which is a long, narrow waterfront lot on Lake Erie. The effective frontage is 70 feet (“ft.”) and the effective depth is 358 ft. for a total lot area of 1.93 acres. The lot is improved with a one and one quarter storey single family detached residence built in 2012, measuring 2,270 square feet (“sq. ft.”) with 1,970 sq. ft. on the main floor and 300 sq. ft. on the second floor. There is a basement measuring 1,980 sq. ft. and an attached garage measuring 662 sq. ft. The Subject Property has a fireplace and two and a half bathrooms. MPAC has assessed this waterfront property with a slightly sloping topography, a gravel shoreline and no proximity or abutting variables.

2The parties agree that there are two sections on the north end of the Subject Property that are designated as archeologically restrictive. MPAC has allocated an adjustment of -11% for the unusable area on the land value portion.

3MPAC has also allocated a +27.5% adjustment to the assessed value to reflect a rising real estate market in the vicinity of the Subject Property.

4MPAC’s has assessed the current value of the Subject Property at $705,000.

5Pursuant to the provisions of the Assessment Act (the “Act “), the assessment of land shall be based on its current value. The Act also provides that, for the 2017 to 2020 taxation years, MPAC is required to assess this value as of the valuation date, January 1, 2016 (“current value”).

6The Appellants have filed appeals for taxation years 2017 and 2018 with the Assessment Review Board (the “Board”), pursuant to s. 40 of the Act. It is their position that MPAC’s assessment of current value is too high and that the correct current value is between $575,000 and $595,000. At this hearing, MPAC takes the position that its assessed value is correct.

7Section 44(3)(b) of the Act directs the Board to reduce the current value of the Subject Property if similar lands in the vicinity have been assessed at a lower value (“equitable reduction”). The purpose of this provision is to fairly distribute of the municipal tax burden according to the value of the property possessed by each ratepayer. MPAC takes the position that an equitable reduction is not required. The Appellant takes the position that a reduction is required because similar properties in the vicinity of his property are assessed for less than his property.

8The Board directed the parties to produce post-hearing evidence and provided each with an opportunity to review and reply to any new evidence.

Relevant Legislation and Rules

9The 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.

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

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:

3. For each subsequent period consisting of four consecutive taxation years, land is valued as of January 1 of the year preceding the first of those four taxation years.

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.

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.

Issues

10The issues to be determined on this appeal are:

1. The correct current value of the Subject Property for the taxation years 2017 to 2018; and
2. Whether there should be an equitable reduction of the current value of the Subject Property pursuant to s. 44(3) (b) of the Act, and, if so, what the amount of this reduction should be.

Discussion, Analysis and Findings

Issue No. 1: What is the correct current value of the Subject Property for the taxation years 2017 to 2018.

MPAC’s Evidence

11Sheryl McRoberts, MPAC’s representative, presented a Valuation Report respecting the Subject Property, dated March 16, 2018. This Report included her analysis of the Subject Property’s value including a description of the Subject Property, six property sales, and time adjustment factors that were used to adjust sale prices to the valuation day of January 1, 2016. All of the suggested sale properties are waterfront properties with single family residences. See Table 1 for additional details of these properties.

Table 1

Feature	Subject Property	63 Tennessee Avenue	105 Tennessee Avenue	527 Lakeshore Road East	749 Lakeshore Road East	10957 Lakeshore Road	2 Steele Street*
Waterfront Size/Description	70 ft. Gravel	70 ft. Gravel	60 ft. Gravel	90 ft. Sandy	120 ft. Sandy	90 ft. Gravel	120 ft. Gravel
House Size (sq. ft.)	2,270	2,217	1,684	1,922	2,257	1,894	3,219
Number of Storeys	1.25	1	2	1	1	1	2
Basement Size/Finished Area (sq. ft.)	1980	1449	1210	1922	2089/ 896	2006/ 120	390
Garage (sq. ft.)	662	430	240	684	612	575	490
Year Built	2012	2012	1890	1980	1962	2010	1920
Sale Date	N/A	June 2014	September 2014	November 2014	November 2012	July 2016	January 2016
Sale Price	N/A	$797,000	$525,000	$815,000	$868,000	$850,000	$677,500
Time Adjusted Sale Price	N/A	$871,095	$540,282	$814,893	$932,077**	$794,761	$674,113

*This property received a -10% adjustment for proximity to a nuisance.

MPAC’s Submissions

12MPAC takes the position that the assessment as returned of $705,000 is correct because the median time adjusted sale price of its six sales is $805,000 and the median assessed value of those sales is $752,000. MPAC states that because the Subject Property’s assessed value falls below both these values, it is considered to be correctly assessed.

13Both MPAC and the Appellant agreed that 2 Steele Street is similar to the Subject Property. Although it is older with a negative adjustment for medium traffic, it has a larger waterfront and residence. The parties agreed that the differences between the two properties balance out to make them similar.

MPAC’s Response to the Appellant’s Submissions

14With regard to the Appellant’s argument that 2 Steele Street receives a reduction for proximity to a nuisance, MPAC provided post-hearing submissions that 2 Steel Street receives a -10% adjustment for proximity to a nuisance and the same +27.5% adjustment for market sales.

15With regard to the Appellant’s argument that the Subject Property should receive an adjustment due to the archeologically important areas, MPAC responded that the land portion was adjusted by -11%. In its post hearing submissions, MPAC provided the following breakdown which accounts for the value of the Subject Property before applying the +27.5% market adjustment:

Land value before the adjustment: $288,659 Land value after the -11% adjustment: $256,907 Building Value (dwelling) $267,305 Building Value (garage) $29,492

16With regard to the environmentally protected area, MPAC submitted that all waterfront properties in the area are affected by this restriction.

Appellant’s Evidence

17Mr. Ravenda, represented himself and Ms. Oliver. His issues with regard to current value are sale values of area properties, restrictions on his property and the proximity to nuisances. He presented three suggested sale properties and a history of development and assessment issues for his property. Table 2 summarizes the Appellant’s three sale properties.

Table 2

Feature	Subject Property	53 Tennessee Avenue	165 Tennessee Avenue	33 Lakeshore Road
Waterfront Size/Description	70 ft. Gravel	69 ft. Gravel	90 ft. Gravel	75 ft. Gravel and Sand but not direct waterfront
House Size (sq. ft.)	2,270	3,379	1,714	2,782
Number of Storeys	1.25	2	1	1.75
Basement Size/Finished Area (sq. ft.)	1980	0	1,714/ 390	2,120
Year Built	2012	1953	1952	2009
Sale Date	N/A	November 2016	May 2013	May 2017
Sale Price	N/A	$735,000	$450,000*	$785,000
Time Adjusted Sale Price	N/A	$652,680	N/A	$638,990

*renovated before the sale occurred

18The Appellant presented an email dated April 25, 2018 from Kristyn Robins of Robins Real Estate who wrote that size and quality of waterfront is a driving factor in value.

19With regard to two archeologically sensitive areas on the Subject Property, the Appellant submitted reports from the City of Port Colborne’s Planning and Development department and This Lands Archeology Inc. as well as a copy of Appendix A to a By-Law which show that there are two archeologically important areas at the north or street end of the subject property.

20The parties agree that the subject property has an environmentally protected zone near the shore area which restricts development.

21The Appellant presented a map and photographs showing his property’s proximity to the senior’s facility and hospital. The map indicates that 2 Steele Street sits between his property and the senior’s facility and hospital and that his residence is no farther away from these ‘nuisances’ than 2 Steele Street. He also submitted a photograph to illustrate that the Robin Flour Mill is visible from his property.

Appellants’ Submissions

22The Appellant believes that his assessment is unfairly high in relation to the sale values of properties in his area. He also argues that any property with more shoreline or a sandy beach will have added value when compared to his property.

23The Appellant argues that those properties with a larger shoreline than his are superior to his property and referred to the email from Kristyn Robins to support his position. MPAC argued that this document carries little weight because the intent of this email could not be determined; the author was not called as a witness, and could not be cross-examined. MPAC also argues that the rubble and rock waterfront does not detract from the view of the water from the residence.

24The Appellant argued that his ability to develop his property is negatively impacted by two areas. The parties agree that there are two sections on the north end of the Subject Property that are Indigenous burial grounds and, therefore have been zoned archeologically important. Zone 1 is approximately 70 ft. by 40 ft. and is archeologically significant and must be left untouched. Zone 2 is approximately 32 feet by 50 ft. and is archeologically sensitive. There are fewer limitations on the sensitive area and the Appellants have built a driveway over this portion. MPAC has allocated an adjustment of -11% on the land portion only. The Appellant argues that the adjustment was made for Zone 2 and that an additional adjustment should be made for Zone 1.

25The parties agree that the area near the shoreline is an environmentally protected area for the Fowler Toad. The Appellant argued he is unable to build a break wall near the shore and lost approximately 10 feet of land last winter. The parties agree that all waterfront properties in the vicinity of the subject property have the same environmental protection restriction however some property owners built break walls prior to the environmental protection coming into force. As such, properties with break walls do not experience the same erosion. The Appellant argued that the lack of a break wall will affect the market value of his property and that it should be reflected in the value.

26Appellant argued that the subject property’s assessment should reflect its proximity to a the Northland Point Senior’s Facility and a hospital, the hospital’s helicopter landing pad and its ambulance entrance, all of which can be seen from the subject property. The Appellant stated that an abutting property, 2 Steele Street, is given a negative adjustment for these factors. He argues that the subject property should receive a similar adjustment because his residence is physically no farther away from the hospital than 2 Steele Street.

27The Appellant also argued that he can see the Robin Flour Mill from his property but submitted no evidence or arguments as to how this view affects his value.

28The Appellant submits that the correct current value for taxation years 2017 to 2018 is $595,000 based on the sales evidence presented.

Appellant’s Response to MPAC’s Submissions

29The Appellant argued that both 63 Tennessee Avenue and 105 Tennessee Avenue were renovated before they sold and, therefore, the sale values reflect superior properties than what is reflected in MPAC’s evidence. In particular, the Appellant testified that 63 Tennessee’s renovations are of a much higher quality finish than his property.

30The Appellant argues that 527 Lakeshore Road East, 749 Lakeshore Road and 10957 Lakeshore Road are superior to the Subject Property because they have sandy shore lines which are more desirable than his shoreline which MPAC described as gravel. The Appellant’s photographic evidence shows the subject property has a shoreline that is gravel, rocks and concrete debris, the shoreline for 527 Lakeshore Road East and 749 Lakeshore Road are sandy and the shoreline for 10957 Lakeshore Road is a mixture of stones and sand.

Findings on Issue 1

31The best evidence of current value is an open market sale of the Subject Property on or near the valuation day. When there is no such sale, the next best evidence is open market sales of similar properties on or near the valuation day. Sales that occur before and after the valuation day are preferable because they provide a clearer picture of the market place, particularly if the market is fluctuating.

32I agree with the Appellant that a sandy shoreline is superior to a rock and rubble shoreline and that a larger waterfront will likely fetch a higher sale price than a smaller waterfront, all other factors being equal. This is supported by the sale values submitted by the parties.

33Both 63 Tennessee Avenue and 105 Tennessee Avenue were renovated before they sold and, therefore, the sale values reflect superior properties than what is reflected in MPAC’s evidence.

34I am disregarding the sales for 749 Lakeshore Road and 165 Tennessee Avenue. MPAC provided time adjustment factors for the period January 2014 to February 2018. Both of these sales occurred outside of this period and, therefore, time adjustments to estimate their sale prices to the January 1, 2016 valuation day cannot be made. The sale dates are too far from the valuation day to accept the sale values without time adjustments.

35In reviewing the remaining sale properties I find that 53 Tennessee Avenue is inferior to the Subject Property. It has a larger residence but is older and it has two storeys whereas the subject property has only 1.25 storeys. I also find that 105 Tennessee is inferior to the Subject Property. The Appellant argued that it is superior because it has been renovated however it is significantly older than the subject property and it has a smaller residence and slightly less waterfront. Accordingly, I find that the Subject Property would sell for more than the time adjusted sale price of $652,680 (the higher of the two inferior properties).

36I find that 63 Tennessee, 527 Lakeshore, and 10957 Lakeshore are superior to the subject property.

a. I accept the Appellant’s testimony that 63 Tennessee Avenue has been renovated and the quality of finish is superior to the subject property.

b. Although 527 Lakeshore has an older and slightly smaller residence, it has a sandy shore with a larger waterfront.

c. 10957 Lakeshore is a similar age and has a slightly smaller residence but it has a sandy and gravel shore and a larger waterfront.

Accordingly, I find that the subject property would sell for less than lowest time adjusted sale price of $794,761.

37I find that 33 Lakeshore Road is comparable to the Subject Property. The residence is larger but is a similar age and the shoreline is gravel and a similar size. It has a time adjusted sale price of $638,990.

38However, I find that the most comparable property is 2 Steele Street. The parties agreed that, on balance, 2 Steele Street is similar to the Subject Property. Although it is older with medium traffic, it has a larger waterfront and building. I accept the parties’ submissions that the differences between the two properties balance out to make them similar. It has a time adjusted sale price of $674,113. This sale price will also reflect any proximity to nuisances. Therefore, I find that the current value of the Subject Property would be $674,133 if it were not impacted by the archeological land use restrictions.

39The Appellant also argued that he can see the Robin Flour Mill from his property. Neither party presented evidence of as to the affect this view may have on the value of the subject property. Consequently, I make no adjustment for the view of the flour mill.

40The parties agree that the subject property is zoned environmentally protected at the waterfront area and the Appellant testified he is unable to build a break wall which results in soil erosion. I accept MPAC’s testimony that all waterfront properties in the vicinity have the environment protection zone and, therefore, the market sales will reflect any value this may have on the Subject Property. However, I make no adjustment for the lack of a break wall as I received no evidence that would quantify this factor.

41For the archeologically significant area on the subject property’s north end, MPAC has allocated an adjustment of -11% to the total land portion. The Appellant argues that a larger reduction should be given because MPAC’s adjustment does not include Zone 1. I disagree. MPAC’s evidence is that the adjustment was based on the unusable area which is Zone 1. Zone 2 is in use for parking and a driveway. Accordingly, I accept MPAC’s adjustment factor of -11%.

42In its assessment of this property MPAC allocated almost equal portions to the land and the building before making its adjustments for the archeologically significant area and the market adjustment. I have adopted this allocation in my calculations. Removing 11% from 50% of the indicated value results in a reduction of 5.5% from the total current value. Applying that to the indicated value of $674,113 leads to a likely current value of $637,037.

43Accordingly, I find that the current value of the subject property as of the valuation day is $637,000 (rounded).

Issue No. 2: Whether there should be an equitable reduction of the current value pursuant to [s. 44(3)](https://www.canlii.org/en/on/laws/stat/rso-1990-c-a31/latest/rso-1990-c-a31.html#sec44subsec3_smooth)(b) of the [Act](https://www.canlii.org/en/on/laws/stat/rso-1990-c-a31/latest/rso-1990-c-a31.html), and, if so, what the amount of this reduction should be.

MPAC’s Evidence

44MPAC presented an equity analysis of 37 sales of waterfront properties. The median assessment to sale ratio of these sales is 1.009 with a 15.8 coefficient of dispersion.

MPAC’s Submissions

45Relying on its evidence, MPAC’s submits that an equitable reduction of the current value for the 2017 to 2018 taxation years is not required. MPAC argues that the assessment to sale ratio of 1.009 falls well within its acceptable range of 0.95 to 1.05 and the coefficient of dispersion of 15.8 is acceptable because it should be below 20 for recreational waterfront.

Appellant’s Evidence

46The Appellant argues that the subject property’s assessed value should be $575,000 which was is the average assessments of six properties: 19 Tennessee Avenue ($622,000), 165 Tennessee Avenue ($575,000), 105 Tennessee Avenue ($494,000), 2 Steele Street ($694,000), 53 Tennessee Avenue ($481,000) and 33 Lakeshore Road ($578,000). The assessments for the first two properties have not been tested with open market sales. Sales data for the remaining four can be found in Tables 1 and 2.

Appellant’s Submissions

47The Appellant argues that many properties are assessed lower than his property including superior properties that have larger building sizes and waterfronts, such as 2 Steele Street (see Table 1) and 19 Tennessee Avenue which the Appellant describes as the most superior property in the area a similar lot size, superior finishes and a residence which is almost twice the size of the subject property.

Findings on Issue 2

48The purpose of an equitable reduction has been described by the Ontario Court of Appeal in Empire Realty Co. Ltd. and Assessment Commissioner for Metropolitan Toronto et al., 1968 CanLII 183 (ON CA) at page 2:

A prime objective of municipal taxation is the equitable distribution of the burden according to the value of the property possessed by each ratepayer; in the system prevailing in Ontario, the tax levied on the ratepayer is determined by the application of a uniform mill rate upon the assessed value of the ratepayer's taxable property set down in the assessment roll. If equity in taxation is to be achieved, it must result from equity in assessment.

49In addressing equity in assessment, the Court, at page 6, also noted that “an assessment made at the actual value of lands and buildings … would be an unequitable assessment if all similar lands in the vicinity were assessed at some percentage of actual value substantially less than one hundred.”

50However, the goal of the Act is to determine the correct current value. Any equitable reduction in the current value results in an incorrect current value. Consequently, an equitable reduction should only be made where there is clear evidence to support that such a reduction is warranted. In this regard, the burden of proof rests with the Appellant to establish, on a balance of probabilities, that an equitable reduction is required.

51The term “vicinity” is not defined in the Act, but refers to the appropriate geographical area that will yield meaningful comparable properties (see Ontario Regional Assessment Commissioner, Region No. 3 v. Graham, 1993 CanLII 8621 (ON CA) at page 6).

52The Appellant presented two properties without sales and four with sales. The two properties without sales indicate that MPAC’s model is assessing a somewhat similar (165 Tennessee Avenue) and a superior property (19 Tennessee Avenue) less than the subject property. However, the assessments alone are of little assistance in determining the amount of an adjustment, if any, is warranted. The remaining four properties have sales. The data shows that, in relation to these four sales, MPAC has tended to assess them below their market value; the median assessment to sale ratio is 0.91. However, I would prefer a larger sample before making a determination for an equitable reduction.

53Therefore, I prefer MPAC’s equity analysis which contained 37 residential waterfront properties. The Appellant’s four properties are included in MPAC’s analysis. The median assessment to sale ratio of 1.009 indicates that no adjustment is required for the purpose of equity.

DECISION

54The correct current value of the Subject Property is $637,000 for the 2017 to 2018 taxation years.

55An equitable reduction of the current value of the Subject Property, pursuant to s. 44.(3)(b) of the Act, is not required.

56Accordingly, the assessment is reduced from $705,000 to $637,000 for the 2017 and 2018 taxation years.