Rudolf Josef Meyer and Marlise Althaus v. Municipal Property Assessment Corporation Region 1 and Township of North Glengarry, 2019 CanLII 11606

Assessment Review Board / Commission de révision de l’évaluation foncière

ISSUE DATE: February 13, 2019

FILE NO.: WR 154297

Assessed Person(s)/Appellant(s): Rudolf Josef Meyer and Marlise Althaus

Respondent(s): Municipal Property Assessment Corporation ("MPAC") Region 1

Respondent(s): Township of North Glengarry

Property Location(s): 20195 Kenyon Conc. Rd. 1

Municipality(ies): Township of North Glengarry

Roll Number(s): 0111-011-000-26400-0000

Appeal Number(s): 3281957 and 3288684

Taxation Year(s): 2017 and 2018

Hearing Event No.: 698666

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

Heard: June 13, 2018 in Alexandria, Ontario

APPEARANCES:

Parties	Representative
Rudolf Meyer and Marlise Althaus	Self-represented
MPAC	Michelle Gravelle
Township of North Glengarry	No one appeared

DECISION OF THE BOARD DELIVERED BY MARK SPRAGGETT AND JEAN-PAUL PILON

INTRODUCTION

1Rudolf Josef Meyer and Marlise Althaus are owners of 20195 Kenyon Conc. Road, a farm in the Township of North Glengarry (the "Subject Property").

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.

3For the 2017 and 2018 taxation years under appeal, MPAC has assessed the current value as returned at $360,000 for the Subject Property. That value is apportioned with $176,800 in the residential property class and $183,200 in the farm property class.

4Rudolf Josef Meyer (the "Appellant") filed an appeal for the 2017 taxation year with the Assessment Review Board (the "Board"), and he has been deemed to have brought the same appeal with respect to the Subject Property for the 2018 taxation year pursuant to s. 40(26) of the Act. It is the Appellant's position that MPAC's assessment of current value is too high and that the correct current value is $300,000. MPAC took the position at the hearing that its assessed value is correct.

5Pursuant to s. 40(11) of the Act, the Township of North Glengarry was a party to the proceeding. However, it did not advise the Board of its position on the issues raised in these appeals, and no one appeared at the hearing on its behalf.

6Subsection 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. The purpose of this provision is to fairly distribute the municipal tax burden according to the value possessed by each ratepayer.

7MPAC took the position that an equitable reduction was not required. The Appellant did not assert that an equitable reduction was required. Therefore, in this proceeding, this ground for appeal was not in issue.

8At the completion of the hearing, the Board reserved its decision. For the reasons that follow, the Board finds that for the 2017 and 2018 taxation years, the current value of the Subject Property is $371,000. The returned assessment of $360,000 should therefore be confirmed.

RELEVANT RULES AND LEGISLATION

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:

4. 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

10The issue to be determined in this appeal is the correct current value of the Subject Property for the taxation years 2017 and 2018.

PROPERTY DESCRIPTION

11The Subject Property is used primarily for farming purposes. In addition to a residential building, it includes various other structures, such as an attached garage, three barns, two sheds, a greenhouse, and a quonset hut. The Appellant initially took an issue with MPAC's description of the Subject Property, but then accepted MPAC's evidence that 23.45 acres of the total 46.45 acres of farmland on the Subject Property fall in MPAC's Soil Class 3, described by its representative as land suited for hay and pasture, or lower quality farmland. It was further agreed that the remaining farmland, 22 acres, was correctly described as being Soil Class 5, bush and swamp.

DISCUSSION, ANALYSIS AND FINDINGS

MPAC's Evidence

12Michelle Gravelle represented MPAC at the hearing and filed a Valuation Report dated February 27, 2018.

13Ms. Gravelle relied on the cost approach, secondarily using the direct comparison approach to confirm MPAC's opinion of current value.

14Applying the cost approach, and taking into account deductions for depreciation and obsolescence to the variety of building structures on the Subject Property, Ms. Gravelle arrived at a value of $224,535 for the structures on the Subject Property.

15Using the direct comparison approach, Ms. Gravelle first identified six proposed comparable properties in the vicinity of the Subject Property having no building structures, to determine the value of farm land portion of the Subject Property. These, and all of the other proposed comparable properties before the Board, were not adjusted for changes of price over time because of the small number of sales transactions. They were as follows:

Sale Number	Roll Number	Address	Soil Class	Average Sale Price per Acre
1	0101-006-023-54500-0000	County 25 Road	Partly 1	$7,000
2	0101-006-023-89002-0000	Caber Road	2, 3 and 5	$6,100
3	0111-016-000-79000-0000	Concession 10 Road	2, 3 and 5	$6,100
4	0111-016-001-97000-0000	21423 Conc. 10 Road	Partly 1	$7,000
5	0111-016-007-10010-0000	Green Road	Partly 1	$7,000
6	0111-016-007-73100-0000	Power Dam Road	2, 3 and 5	$7,000

16Ms. Gravelle testified that she considered all but the second and third proposed comparable properties to be superior to the Subject Property, mostly because they had land partly classified in Soil Class 1. For these properties, she calculated an average sale price per acre of $7,000. Ms. Gravelle considered proposed comparable properties two and three to be slightly superior, with parts of each in Soil Class 2, with others in Soil Classes 3 and 4. She calculated the average sale price per acre of $6,100 for these properties.

17For the Subject Property, Ms. Gravelle's evidence took into account the amount of land that was pasture, bush and swamp in arriving at a current value of $3,000 per acre.

18Applying that amount to the acreage of the Subject Property of 46.45, MPAC arrived at a land value of $139,000.

19Adding the value for the land and the structures, Ms. Gravelle arrived at a total current value of $363,000 rounded.

20To confirm her valuation using the cost approach, Ms. Gravelle testified she identified six additional proposed comparable properties in the vicinity of the Subject Property that had building structures on what was primarily farmland to determine the cost of the structures on the Subject Property. Ms. Gravelle's analysis of these six proposed comparable properties led her to arrive at a current value of $370,000 for the Subject Property. Below are the relevant proposed comparable properties that are referred to in the reasons below.

	Subject Property	4251 Squire Road MPAC 1	22560 Glen Robertson Road MPAC 3
Sale Date	NA	11/01/2017	12/19/2014
Sale Amount	NA	$422,000	$320,000
Site Acreage	46.35	50	64
Effective Year Built	1964	1935	1918
Full Storeys	1 ¾	1 ¾	2
Building Area	2,304	1,292	1,446
Additional Structures	2 sheds, 3 barns, Quonset hut, greenhouse	3 sheds and 5 barns	5 sheds, Quonset hut, several agricultural tanks, bins and a milk house
Farm Lands (acres)	22.45 in Class 3 23 in Class 5	27 in Class 2 14 in Class 4 9 in Class 5	39 in Class 3 10 in Class 5 15 in Class 6

21Ms. Gravelle testified that this evidence led her to conclude that MPAC's returned assessment of $360,000 was reasonable and correct.

Appellant's Evidence

22The Appellant testified at the hearing and took the position that the current value of the Subject Property was $300,000.

23Mr. Meyer relied on a quantity of local newspaper clippings, most of which were undated and unsourced, that were real estate advertisements for properties for sale. He testified that these proved that properties in the vicinity either did not sell or would not have sold for their listed prices.

24The Appellant also submitted into evidence another unsourced and undated local newspaper article indicating that house prices had increased in the area of the Subject Property by 5.2% between 2016 and 2017.

Appellant's Submission

25The Appellant argued that the proposed comparable properties referred to by MPAC were within a 10 or 15 mile radius, which he considered too large an area to be comparable, although he submitted none of his own in response.

26The Appellant testified that he was aware of two properties close to the Subject Property that have not sold for more than $1,500 per acre of land.

27The Appellant further relied on a previous Board decision that held that the current value of the Subject Property was $248,000 for the 2015 and 2016 taxation years.

FINDINGS

28MPAC's use of the direct comparison approach to determine the current value of the land was unsatisfactory because none of the evidence it used in that approach supported its determination of current value. This is because none of MPAC's proposed comparable properties in this part of its analysis was comparable to the Subject Property as they were entirely dissimilar to the land on the Subject Property both in quality and in quantity. Specifically, they did not contain similar quantities of Class 3 or 5 or similar farm land, nor was there any means of isolating farm land in those classes to determine the value of each of those classes of land at the Subject Property. Moreover, there was no explanation as to how farm land of any class that had sold for $7,000 and $6,100 per acre would support a conclusion that the farm land at the Subject Property could be valued at $3,000 per acre.

29In addition, MPAC's determination of the value of each structure on the Subject Property using the cost approach lacked corroboration, where it was simply stated as a fact what each structure was worth taken from MPAC's manuals. This was insufficient where these conclusions were contested by the Appellant.

30The best evidence of value before the Board was that submitted by MPAC in support of its analysis using the direct comparison approach, because the properties used in that approach included both structures and farm land of similar quantity and quality. In particular, two of those proposed comparable properties were sufficiently similar to the Subject Property in their totality to be of conclusive in the determination of the correct current value of the Subject Property.

314251 Squire Road, MPAC's first proposed comparable property using the direct comparison approach, is relatively comparable with respect to the quantity of land it has, 50 acres where the Subject Property has 46.45, with a similar number of additional structures. It also has a similar amount of similar quality farm land, 27 acres in Class 2 compared to 22.45 acres in Class 3 for the Subject Property, 14 acres in Class 4 and 9 acres in Class 5, where the Subject Property has the same amount of land, 23 acres, entirely in Class 5. In addition, the house on this proposed comparable property is, on balance, also relatively comparable in that while it is smaller and slightly older, it has a slightly higher quality of construction. It was purchased on November 1, 2017 for $422,000, and while this date falls beyond the shoulder year after the valuation date of January 1, 2016, it is only one of two proposed comparable properties that were useful to the Board in its determination of correct current value.

32The second best proposed comparable property presented by MPAC was 22560 Glen Robertson Road. That property has 64 acres of land similarly distributed by class as the Subject Property: 39 acres in Class 3, 10 acres in Class 5, and 15 acres in Class 6. Like the 4251 Squire Road property, it also includes a house that is, on balance, relatively comparable to the one at the Subject Property. While it is smaller and slightly older, it has a slightly higher quality of construction and an additional quarter-storey. It was purchased on December 19, 2014 for $320,000.

33The mean of these two sales prices, $422,000 and $320,000, is $371,000 and the best evidence before the Board of the correct current value of the Subject Property.

34The Appellant's evidence of local newspaper clippings of properties offered for sale was of no assistance to the Board in determining current value. Not only were they uncorroborated, they failed to indicate at what price, if any, a property sold for, or if a property sold at all, necessary components of the direct comparison approach to determine current value.

35Similarly, the Board found that the Appellant's views on what he thought the sale prices had been for local properties was not useful in the absence of credible and corroborating evidence explaining the details of each sale.

36The Appellant filed a previous decision of the Board involving the Subject Property (Meyer v Municipal Property Assessment Corporation Region No. 01, 2016 CanLII 37480 (ON ARB)), which was not binding on the Board. This is because the question to be determined in that decision was the correct current value of the Subject Property on January 1, 2012, where the question to be determined in this decision was what was the correct current value on January 1, 2016.

DECISION

37The correct current value of the Subject Property is $371,000 for the 2017 and 2018 taxation years.

38MPAC has not served a notice of intention to seek a higher assessment as required by Rule 40 of the Board's Rules of Practice and Procedure. Therefore the assessment of the Subject Property at $360,000 is confirmed for the 2017 and 2018 taxation years with $176,800 in the residential property class and $183,200 in the farm property class.