Peter Gerald Thomas v. Municipal Property Assessment Corporation, 2019 CanLII 11600

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE:

February 14, 2019

FILE NO.:

WR 158292

Assessed Person(s):

Peter Gerald Thomas

Appellant(s):

Peter Gerald Thomas

Respondent(s):

Municipal Property Assessment Corporation (“MPAC”)

Region 30

Respondent(s):

City of Sudbury

Property Location(s):

657 Lake Point Court

Municipality(ies):

City of Sudbury

Roll Number(s):

5307-060-040-22100-0000

Appeal Number(s):

3321633

Taxation Year(s):

2018

Hearing Event No.

709768

Legislative Authority:

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

Heard:

February 1, 2019 by telephone conference call

APPEARANCES:

Parties

Representative

Peter Gerald Thomas

Self-represented

MPAC

Andrew Rossanese

City of Sudbury

No one appeared

MEMORANDUM OF ORAL DECISION DELIVERED BY JOANNE LAWS ON FEBURARY 1, 2019

OVERVIEW

1Peter Gerald Thomas (the “Appellant”) is the owner of 657 Lake Point Court, Sudbury (the “Subject Property”), which is a single family detached home located in the South End neighbourhood of Greater Sudbury.

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 (“current value”).

3MPAC has returned an assessment of $277,000 for the 2018 taxation year.

4Mr. Thomas filed an appeal for 2018 taxation year with the Assessment Review Board (the “Board”) pursuant to s. 40 of the Act. It is his position that MPAC’s assessment of current value is too high and that the correct current value is $250,000. MPAC’s representative, Andrew Rossanese, took the position that the assessed value is correct.

5Pursuant to s. 40(11) of the Act, the City of Sudbury is a party to this proceeding. However, it did not advise the Board of its position on the issues raised in this appeal, and no one appeared at the hearing on its behalf.

6 Section 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, I rendered my decision orally. For the reasons given at the hearing, and which follow in writing below at MPAC’s request, I find that the current value of the Subject Property for the 2018 taxation year is $252,000.

Relevant Legislation

8The Act states that:

“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:

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

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.

Issue

9The issue to be determined on this appeal is what the correct current value of the Subject Property is for the 2018 taxation year.

Discussion, Analysis and Findings

MPAC’s Evidence

10MPAC describes the Subject Property as having a lot measuring 120 wide by 125 feet deep. It is improved with a detached, singe story home built in 1958 with a brick and siding exterior. It has 1,306 square feet (“sq. ft.”) of building area. The basement also has 1,306 sq. ft. of area, 491 sq. ft. of which is finished. The home has municipal water and a septic bed. MPAC has allocated it with a 6 out of 10 quality of construction.

11Andrew Rossanese represented MPAC and presented a Valuation Report dated September 12, 2018. He used the direct sales comparison approach in support of the returned assessment of $277,000. Mr. Rossanese selected three sale properties which are summarized in the table below. All have single storey detached homes.

MPAC’S PROPOSED COMPARABLE PROPERTIES

Subject Property

672 Lake Point Court

731 Sunnyside Road

3030 Henri Street

Date of Sale

N/A

Nov 2013

May 2017

Sept 2016

Sale Price

N/A

$250,000

$335,000

$340,000

Time Adjusted Sale Price

N/A

$252,100

$329,442

$338,030

Lot Size (sq. ft.)

15,500

14,878

16,693

12,300

Building Area (sq. ft.)

1,306

1,163

1,149

1,212

Basement Area/ Finished Basement Area (sq. ft.)

1,306/491

1,163/295

1,149/1,011

1,212/921

Building Age

1958

1957

1969

1953

Quality of Construction

5.5

Number of Bathrooms

Water Service Code

Municipal

Private Well

Sanitary/Sewage

Septic Bed

12For the purpose of adjusting the sales to the valuation day of January 1, 2016, Mr. Rossanese submitted a time adjustment factor study “based on 414 sales of vacant and/or improved land” in the Subject Property’s neighbourhood from January 11, 2013 to September 1, 2017. He concluded from that study that the overall market had increased by 3.0 per cent over this 56 month period.

13Mr. Rossanese testified that in the last 10 years there has not been a sale of a single family detached home for less than $250,000 in the Greater Sudbury Area.

14At the hearing the parties agreed that the Subject Property is located in a desirable and growing area of Sudbury.

MPAC’s Submissions

15Relying on its evidence, MPAC submits that the correct current value for the 2018 taxation year is $277,000.

16MPAC argued that using the time adjusted sale price per square foot of building area of its three suggested comparable properties demonstrates the correctness and reasonableness of the assessed value. Based on all three suggested comparable properties, MPAC calculated a value of $340,578 (($216.76 + $278.90 + $286.72/3) x 1,306 sq. ft.). Based on its chosen best comparable, 672 Lake Point Court, MPAC calculated a value of $283,088 ($216.76 x 1,306 sq. ft.).

17Using bracketing, MPAC argued that the range of sale prices, $250,000 to $340,000, support the assessed value, which falls at the lower end of this range.

18In response to Mr. Thomas’ argument that his property became less marketable after he was required to move the septic bed which resulted in the limited use and un-severability of his lot, Mr. Rossanese said none of his suggested comparable properties have severable lots and all have septic beds.

19In response to Mr. Thomas’ argument that his property lacks a sidewalk, Mr. Rossanese stated that MPAC places no market value on sidewalks.

20In response to Mr. Thomas’ argument that his property has fewer services than nearby properties that are connected to the municipal sewer system, Mr. Rossanese pointed out that his three suggested comparable properties also have septic beds and two do not have municipal water.

Appellant’s Evidence

21Peter Thomas represented himself. He acknowledges that his property is located in a desirable area of Sudbury however his property lacks services that other, nearby properties, receive. He has no sidewalks or municipal sewer. In addition, he cannot improve his land.

22His primary issue is that a change made to his property due to a damaged septic tank system has reduced the market value of his property due to restrictions on use of his side yard. Mr. Thomas’ evidence is that approximately 10 years ago a gas line was installed in his home and his septic tank was damaged. New guidelines had come into play which required that the replacement septic tank be installed in a different location. The replacement septic tank was installed on the south side, or side yard, of his property. At one time, the side yard included a carport and a mature tree, both of which were removed for the new septic bed. Furthermore, the side yard was large enough that the lot may have been severed. Once the replacement septic tank was installed, he lost the use of 50% of his lot and his property could no longer be severed nor could it be improved upon. It must remain as lawn area. Larger plantings such as shrubs or trees or improvements are not permitted. He cannot re-construct the lost car port.

23Mr. Thomas argues that the Subject Property is not as valuable as it once was when the vacant portion may have been used for purposes other than a lawn. He argues that a prospective purchaser will not be interested in a lot this size if it cannot be used for any other purpose than, as he put it, cutting grass.

24Mr. Thomas presented two Appraisal Reports for his property, one from 2010 and the other from 2018, along with other documents which outlined the septic tank and property use issues. The second appraisal, dated February 27, 2018, is the closest of the two reports to the January 1, 2016 valuation day. It was authored by Victor Costanzi and reviewed by Fred Johannsen, AACI, both of Johannsen Appraisal Services. It contained three sale properties. All are similar to the Subject Property in that they are single-storey detached with brick and siding exteriors. These properties are summarized in the following table.

APPELLANT’S PROPOSED COMPARABLE PROPERTIES

Subject Property

1530 Sunnyside Road

2256 Dunbar Street

1046 Clementine Street

Date of Sale

N/A

Dec 2017

Aug 2017

May 2017

Sale Price

N/A

$275,000

$255,000

$235,000

Water

Municipal

Well

Municipal

Sewage

Septic

Municipal

Septic

Lot Size

120 x 125

4.09 acres

70 x irregular

110 x 136

Age of Building

1958

1972

1987

1969

Build. Area (sq. ft.)

1,311

2,230

1,108

1,028

Bathrooms

1.5

Basement

Fully finished

unfinished

Fully finished

Parking

Driveway

Double garage

Driveway

25Like MPAC, the Appraiser used the direct comparison approach to value. Unlike MPAC, the Appraisal Report’s author adjusted the sale values by a number of differences between his suggested comparable properties and the Subject Property. While adjustments were made for many of the physical differences, adjustments were not made for the differences in age. From his analysis of the Subject Property and the adjustments he made to his suggested comparable sale properties, the Appraisal Report’s author concluded that the Subject Property’s market value was $250,000 in 2018.

Appellants’ Submissions

26Relying on his evidence, the Appellant submits that the correct current value for the 2018 taxation year is $250,000.

Findings

27The very best way of determining the current value of a property is an open market sale of that property near the valuation day. That gives a market-tested value for the property which is, essentially, its current value at the time of the sale. Where a sale has not taken place, as here, the next best way of determining current value is to look to sales of similar properties.

28Both parties provided evidence of value based on comparing the Subject Property with other residential properties sold in the Sudbury area. MPAC provided a Valuation Report and the Appellant provided two appraisals and related supporting documents.

29I agree with Mr. Rossanese that his sale 1, 672 Lake Point Court, is the most comparable of the sales he submitted. It is located across the street from, and, therefore, in the same market as the Subject Property. Although this sale is farther from the valuation day than I would prefer, MPAC provided a Sales Ratio Trend Analysis which shows that the market has been quite stable. The report shows that during a 56 month period from January 11, 2013 to September 1, 2017, the overall change in the market was 3%. Like the Subject Property it has a single storey residence of a similar age and the lot is a similar size. Like the Subject Property, it has municipal water and a septic bed. I received no evidence that there are any restrictions to this property to improve or build on the land which suggests it is superior to the Subject Property in this regard. The residence is slightly smaller with 1,163 sq. ft. of building area. In consideration of all the factors, I find that, on balance, this property is the most similar to the Subject Property. It sold in November 2013 for $250,000 and has a time adjusted sale price of $252,100.

30On balance, MPAC’s sale 2, 731 Sunnyside Road, is superior to the Subject Property. Although it has a slightly smaller building area, it has a newer residence with more finished basement area, it has an additional bathroom and a larger lot. It has a private well and a septic bed, however I received no evidence that there are restrictions on improving the land for this property that are similar to the Subject Property. Accordingly, the Subject Property would sell for less than its time adjusted sale price of $329,442.

31MPAC’s sale 3, 3030 Henri Street is, on balance, inferior to the Subject Property. It is older, has a slightly lower quality of construction, a slightly smaller building area and a smaller lot. Like sale 2, it has a private well and septic bed, however I received no evidence that there are restrictions on improving the land similar to the Subject Property. MPAC’s photographic evidence shows that it does not have the curb appeal or is as well maintained as the Subject Property. Yet it sold in September 2016 for $340,000 and has a time adjusted sale price of $338,030. Based on the high sale price for such an inferior property, I am not confident that I have all of the information for this property. At the very least it appears to be an outlier when compared to the other five sales in evidence. Accordingly, I am disregarding this sale because I am not confident in the information I have.

32MPAC proposed calculating the current value based on the sale value per square of building area for each of its sales. This method is not preferable in this instance because the sale properties are not identical to the Subject Property. Considering the properties as a whole and taking into account their differences will result in a more accurate estimation of current value.

33I accept the Appellant’s evidence that the Subject Property’s marketability is lessened because of the restrictions on use of the side yard.

34The Appellant’s 2018 Appraisal Report, which is the nearest of his two appraisals to the valuation day, included three sales, all of which occurred in 2017 with unadjusted sale values of $235,000, 255,000 and $275,000. They are similar to the Subject Property in that they are all single storey residences with brick and siding exteriors.

35The Appraisal Report’s author did not attend the hearing and, therefore, his opinions could not be examined. I do not believe that the author’s absence at a hearing necessarily results in his report being given less weight. The weight given to an Appraisal Report will depend on the circumstances of the case and the contents of the report. A report may have detailed opinions of value with reasons for those opinions. In such cases an appraisal may stand on its own without oral testimony. That is not the case here. During the hearing, the Appellant was unable to answer questions about the contents of the Appraisal Report and the details of the adjustments made to each sale are incomplete. As a result, I find that the Appraisal Report (in particular, the value of the adjustments made to the sale properties) does not carry the same weight as it might have if the author been called as a witness.

36While this lack of clarity caused me to attribute less weight to the opinions in the Appraisal Report, I am not making a finding of credibility of the author or the report. In addition, the three sales presented in the Appraisal Report can still be considered in determining the current value. My analysis of these three sales follows.

37The first sale, 1530 Sunnyside Road, is superior to the Subject Property in lot size, building size, age, and because it has a garage. I was not provided with a time adjustment factor for the sale date of December 2017. However, based on MPAC’s time adjustment factors, I am satisfied that any adjustment will be minor. Accordingly, I find it likely that the Subject Property would sell for less than $275,000.

38The Appellant’s second sale, 2256 Dunbar Street, is 29 years newer than the Subject Property and it has both municipal water and sewage. It sold in August 2017 for $255,000 and using MPAC’s time adjustment factors, the time adjusted sale price is very similar at $255,510. It has a slightly smaller residence, however the details of the lot size are incomplete. While I do not have the actual lot size, it is fair to say that, based on its age and the municipal services it receives, it is likely superior to the subject property. However, based on the missing data, I am not relying on this sale in my determination of current value.

39The third sale, 1046 Clementine Street, is very similar to the Subject Property. It is slightly newer but it has a smaller building area. Like the Subject Property it has municipal water and a septic tank, a similar sized lot, a finished basement and no garage. It sold for $235,000 in May, 2017. Using MPAC’s time adjustment factors, the time adjusted sale price is $232,885. I find that the Subject Property would likely sell for a similar value.

40Based on the above, I find that the Subject Property would likely sell for less than $275,000 and no more than $252,000. Accordingly, I find that the current value of the Subject Property is $252,000, rounded.

DECISION

41The correct current value of the Subject Property is $252,000 for the 2018 taxation year.

42Accordingly, the assessment is reduced from $277,000 to $252,000 for the 2018 taxation year.

“Joanne Laws”

JOANNE LAWS

MEMBER

Assessment Review Board

A constituent tribunal of Tribunals Ontario - Environment and Land Division

Website: www.elto.gov.on.ca Telephone: 416-212-6349 Toll Free: 1-866-448-2248