Fuller v. Municipal Property Assessment Corporation Region 03, 2018 CanLII 96172

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: October 10, 2018

FILE NO.: WR 155845

Assessed Person(s): Patricia Anne Fuller

Appellant(s): Patricia Fuller

Respondent(s): Municipal Property Assessment Corporation Region 03

Respondent(s): City of Ottawa

Property Location(s): 22 Beechfern Drive

Municipality(ies): City of Ottawa

Roll Number(s): 0614-272-821-01900-0000

Appeal Number(s): 3265290 and 3290569

Taxation Year(s): 2017 and 2018

Hearing Event No. 701786

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

Heard: September 17, 2018 by telephone conference call

APPEARANCES:

Parties

Representative

Patricia Anne Fuller

Glen Lucas

MPAC

Leo Chapdelaine

City of Ottawa

No one appeared

DECISION OF THE BOARD DELIVERED BY JENNIFER GRIFFITH

BACKGROUND

1Patricia Anne Fuller (the "Appellant") is the owner of 22 Beechfern Drive (the "Subject Property"), which is located in the City of Ottawa.

2Pursuant to the provisions of the Assessment Act, R.S.O. 1990, c. A.31 (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.

3MPAC has assessed the current value of the Subject Property at $606,000 for the 2017 and 2018 taxation years.

4The Appellant has filed an appeal for taxation year 2017 and was deemed to have filed an appeal for the 2018 taxation years 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 $526,000. At this hearing, MPAC takes the position that its assessed value should be changed to $570,000.

5Pursuant to s. 40(11) of the Act, the City of Ottawa, is a party to this proceeding. However, no one appeared at the hearing on its behalf.

6Section 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 did not assert that an equitable reduction is required. Therefore, in this proceeding, this ground for appeal is not in issue.

7At the completion of the hearing, the Board reserved its decision. For the reasons that follow, the Board finds that the current value assessment for the 2017 and 2018 taxation years is $499,000. Therefore, the Board reduces the returned assessment from $606,000 to $499,000 for the 2017 and 2018 taxation years. Pursuant to s. 44(3)(b) of the Act, an equitable reduction of this value is not required.

RELEVANT LEGISLATION

8Section 1 of the 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.

9Section 19.(1) of the Act states:

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

10Section 19.2(1) of the Act states:

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:

4. For the period consisting of the four taxation years from 2017 to 2020, land is valued as of January 1, 2016.

11Section 40.(17) of the Act states:

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.

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.

ISSUES

13The issue to be determined on this appeal is the correct current value of the Subject Property for the taxation years 2017 and 2018.

Description of the Subject Property

14The Subject Property is a two-storey, single-family detached dwelling, located at 22 Beechfern Drive, in the City of Ottawa. The Subject Property was built in 1988, with a total building area of 3,138 square feet ("sq. ft."), and a total lot size of 0.2 acre.

DISCUSSION, ANALYSIS AND FINDINGS

MPAC's Evidence

15Leo Chapdelaine represents MPAC. Mr. Chapdelaine prepared a Valuation Report respecting the Subject Property, dated April 2, 2018 ("Valuation Report") which he submits into evidence.

16Mr. Chapdelaine states that the Subject Property was inspected on March 16, 2018 in the presence of Glen Lucas, and that the inspection revealed that the Subject Property has a finished basement area, air conditioning, and that the correct total building area is 3,138 sq. ft. (instead of 3,091 sq. ft. as previously reported).

17Mr. Chapdelaine testifies that the assessed value of suggested comparable property at 2 Hedgerow Lane includes a reduction of one per cent ($6,000) for having a corner lot; the assessed value of the suggested comparable property 62 Hampel Crescent includes a reduction of one per cent ($5,680) for having a corner lot; the assessed value of the suggested comparable property at 26 Beechfern Drive includes a positive adjustment of $45,710 for abutting a ravine; the assessed value of the Subject Property includes a positive adjustment of $43,400 for abutting a ravine; and the assessed value of the suggested comparable property at 46 Hesse Crescent includes a positive adjustment of $21,600 for having a three car garage (the Subject Property has a two car garage and the added value is $13,289).

18Mr. Chapdelaine testifies that MPAC has conducted a market analysis and found that a reduction of eight per cent to the current value of the Subject Property is required. He states that he applied the reduction to the MPAC's proposed current value of $620,000 determined by the sales evidence and corrections to the Subject Property's data to arrive at a current value of $570,000 as stated below.

19In support of current value, Mr. Chapdelaine presents a market analysis of eight sales which occurred in the same homogeneous area as the Subject Property at 26 Beechfern Drive, sold in 2014; 12 Hesse Crescent, sold in 2014; 62 Hampel Crescent, sold in 2016; 46 Hesse Crescent, sold in 2015; 50 Hesse Crescent, sold in 2015; 2 Hedgerow Lane, sold in 2016; 24 Red Oaks Trail, sold in 2014; and 24 Red Oaks Trail, sold in 2016. Mr. Chapdelaine testifies that these eight suggested comparable properties are relatively comparable to the Subject Property.

20The analysis contains both actual sales and time-adjusted sale prices. The sale prices ranges from $473,500 to $649,000 and time adjusted sale prices from $485,650 to $667,395. On average, the suggested comparable properties have a total building area of 3,026 sq. ft., a total lot size of 0.19 acres, year built 1988, sold at a median sale price of $528,750 and a median time adjusted sale price of $515,828.

MPAC's Submissions

21Relying on its evidence (revised total building area, finished basement, air conditioner) and open market sales, MPAC submits that the current value is $620,000. Applying the market reduction of eight per cent to this value results in a correct current value of $570,000 rounded ($620,000 - $49,600).

Appellants' Evidence

22Glen Lucas represents the Appellant. Mr. Lucas, Property Tax Review Services, is of the view that the locational feature of abutting a ravine generally adds value to the assessed value of a property. However, he argues that in the case of the Subject Property, it does not add value, because there is only approximately sixteen feet of usable land at the back of the property which ends with a steep slope.

23Mr. Lucas calls Patricia Fuller (assessed person) and she testifies that at the time of purchase, there were other lots available and she chooses the Subject Property because it offers privacy, and was heavily wooded with cedar. Ms. Fuller also testifies that she was aware that the Subject Property was a ravine lot and paid a premium of $5,000 for it.

24Ms. Fuller testifies that only about sixteen feet of the backyard is usable, and the remainder is a steep slope, estimated at about forty-five degrees. As a result, she has much difficulty cutting her lawn. In an effort to level the two sides of the back yard, Ms. Fuller states that she consulted with Yards Unlimited Landscaping and was quoted an estimate of $20,000. However, in order to do any major landscaping work to the backyard of the Subject Property, a permit has to be approved by the Municipality and other government entities to ensure compliance with the appropriate setback requirements.

25Ms. Fuller testifies that the Subject Property is assessed higher than other properties in the neighbourhood and that was confirmed by a real estate agent. She states that the property at 28 Beechfern Drive is a ravine lot that is listed on the open market for $522,000, which is significantly lower than the returned assessment of the Subject Property.

26In support of current value, Ms. Fuller presents a Sales Study with twelve sales which sold in 2015, 2016 and 2017. These twelve suggested comparable properties are located at 2 Hedgerow Lane, sold in 2016 for $535,000; 24 Beechfern Drive, sold in 2015 for $196,000; 1 Beechfern Drive, sold in 2015 for 424,000; 142 Beechfern Drive, sold in 2015 for $392,500; 33 Beechfern Drive, sold in 2015 for $335,000; 42 Beechfern Drive, sold in 2017 for $441,500; 46 Beechfern Drive, sold in 201 for $528,500; 57 Beechfern Drive, sold in 2015 for $435,000; 83 Beechfern Drive, sold in 2016 for $466,600; 11 Hampel Crescent, sold in 2017 for $560,000; 21 Hampel Crescent, sold in 2016 for $560,000; and 21 Wintergreen Drive, sold in 2017 for $619,000.

27The study shows that these twelve sales have a median sale price of $454,050 and a median ASR of 0.956.

Appellant's Submissions

28Relying on the above evidence, that the locational feature of abutting a ravine adds no value to the assessed value of the Subject Property, the Appellant submits that the correct current value for taxation years 2017 and 2018 is $526,000 rounded (MPAC's proposed current value of $570,000 - $43,400 adjustment for abutting a ravine).

Findings on Current Value

29Under s. 44.(3)(a) of the Act, the Board must first determine "the current value of the land." The best evidence the Board can receive of current value is an arm's length and market-tested sale of the property on the valuation date or close to it.

30In regard to the issue of ravine lot adjustment of $43,400, the Board accepts the adjustment value, because Ms. Fuller testifies that she knowingly purchased the Subject Property as a ravine lot and also paid a premium of $5,000 for it.

31In regard to the steep slope at the backyard of the Subject Property. The Board rejects Ms. Fuller's testimony of a cost-to-cure estimate of $20,000 by Yards Unlimited Landscaping. Ms. Fuller presents no official estimate from Yards Unlimited Landscaping detailing how they arrived at the estimated value of $20,000. The Appellants presented no other quantitative evidence to demonstrate the impact of the steep slope on the assessed value of the Subject Property.

32In reviewing MPAC's eight sales of suggested comparable properties in support of current value, the Board does not rely on the three sales which occurred in 2014. The Board finds that these three sales are too far removed from the valuation date of January 1, 2016 to provide any meaningful test of current value.

33The remaining five sales are located at 62 Hampel Crescent, sold in 2016 at a time adjusted sale price of $563,244; 46 Hesse Crescent, sold in 2015 at a time adjusted sale price of $663,036; 50 Hesse Crescent, sold in 2015 at a time adjusted sale price of $485,650; 2 Hedgerow Lane, sold in 2016 at a time adjusted sale price of $519,988; and 24 Red Oaks Trail, sold in 2016 at a time adjusted sale price of $511,668. These five comparable properties are on average similar in total building area, lot size, quality of construction and year built. However, these five comparable properties are not abutting a ravine.

34An analysis of these five sales shows that they sold at a median time-adjusted sale price of $519,988. The Board finds that the adjustment for abutting a ravine should be reduced to $21,700 ($43,400 X 0.5), because both MPAC and the Appellants acknowledge the drastic change in the steepness and openness (no privacy) of the lot over the years and offered no solution. When this value of $519,988 is adjusted for abutting a ravine it results in a value of $542,000 ($519,988 + $21,700).

35When this value of $542,000 is further reduced by MPAC's market analysis finding of negative eight percent ($43,360), it results in a current value of $499,000.

36Based on the above sales analysis, the Board accepts MPAC's five sales which occurred in 2015 and 2016, with a current value of $499,000.

37On the contrary, the Board rejects the Appellants' twelve sales, because the Appellants present insufficient information (total building area, garages, basement area, quality of construction and in some cases lot size) that is necessary to make a true comparison to the Subject Property. As well, four of the Appellants sales occurred in 2017 which is too far removed from the valuation date of January 1, 2016 to provide any true test of current value.

38Based on all of the above evidence, the Board finds the current value to be $499,000.

DECISION

39The Board finds the current value of the Subject Property is $517,000 for the 2017 and 2018 taxation years. Therefore, the Board reduces the returned assessment from $606,000 to $517,000 for the 2017 and 2018 taxation years.