Kamen Laptev v. Municipal Property Assessment Corporation, Region 27, 2019 CanLII 18810

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE:

March 04, 2019

FILE NO.:

WR 158792

Assessed Person(s):

Kamen Mladenov Laptev

Appellant(s):

Kamen Laptev

Respondent(s):

Municipal Property Assessment Corporation, (“MPAC”), Region 27

Respondent(s):

Town of Lasalle

Property Location(s):

377 Mayfair Avenue

Municipality(ies):

Town of Lasalle

Roll Number(s):

3734-090-000-24350-0000

Appeal Number(s):

3233370 and 3314043

Taxation Year(s):

2017 and 2018

Hearing Event No.:

701596

Legislative Authority:

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

Heard:

July 23, 2018 in Lasalle, Ontario

APPEARANCES:

Parties

Representative

Kamen Laptev

No one appeared

MPAC

Justin Jewhurst

Town of Lasalle

No one appeared

DECISION OF THE BOARD DELIVERED BY DAN WEAGANT

INTRODUCTION

1Kamen Laptev (the “Appellant”) filed an appeal to the Assessment Review Board (the “Board”) because he believed the assessment returned on his property at 377 Mayfair Avenue (the “subject property”) was too high.

2MPAC returned an assessment of $288,000 for the 2017 and 2018 taxation year.

3At the appointed time for the hearing, no one was in attendance on behalf of either the Town or the Appellant. The Town had previously confirmed receipt of the hearing notice and advised that it was not participating in this appeal.

4The Board called the hearing to order at 10 a.m., having given the Appellant a 30 minute grace period, as is the Board’s custom. The Appellant did not appear.

5Rule 104 of the Board’s Rules of Practice and Procedure (the “Rules”) states, “If a Party fails to appear at a hearing event, the Board may proceed with the hearing event, or take other steps that it deems appropriate.” The Board chose to proceed with the hearing because:

• There was no evidence that the Appellant did not receive notice of the hearing.

• MPAC prepared for and attended the hearing with the expectation that it would have a chance to cross-examine and argue its case. Such preparation and attendance has costs.

6The Board finds that the Appellant’s failure to attend was prejudicial to MPAC. For that reason and for the reason that MPAC prepared and attended in good faith, the hearing commenced in the Applicant’s absence.

7The Board must decide two things in these appeals. Firstly, the Board must determine the current value of the subject property. Once that decision is made, the Board must then determine if the current value found needs to be reduced for the purpose of equitable assessment, when reference is made to the assessments of similar properties in the vicinity.

DECISION

8The Board finds the current value of the subject property is $344,000. There is evidence to support a reduction in this amount for the purposes of equitable assessment.

9The assessment is therefore reduced from $344,000 to $332,000.

10Neither MPAC nor the Town gave notice to the Board and the other parties, as required under Rule 40 of the Rules, of its intention to raise a change in assessment that would result in higher taxation. Increasing the assessment for 2017 and 2018 would, therefore, be unfair.

11Accordingly, the assessment of 377 Mayfair Avenue for the 2017 and 2018 taxation years is confirmed at $288,000 in the Residential property class.

LEGISLATION

12In making its determination of these appeals, the Board must consider the relevant sections of the Assessment Act, R.S.O. 1990, c. A.31 (“Act”).

13Section 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.

14Section 19.(1) of the Act states:

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

15Section 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 Case

16MPAC testified that the subject property sold on April 14, 2016 for $265,000. The sale on that date was accompanied by a second sale on the same date for $1. MPAC considered these sales to be suspect with regard to determining the property’s current value, despite the proximity of the sale date to the statutory valuation day of January 1, 2016.

17MPAC submitted the following reasons for disregarding the sales of the subject property on April 14, 2016:

• The $265,000 was identified as an estate sale of the property, meaning that it was purchased from the estate of someone who had passed away, and was being sold by the estate’s executors. MPAC commonly disregards these kinds of sales because they are typically driven by emotion or other duress, not related to the overall market factors in place.

• The $1 purchase was disregarded out of hand as there was no evidence that the property had experienced some calamity or other condition to render it valueless. It also indicated that non-market related factors were impacting the sale.

18Having disregarded the sale of the subject property, MPAC submitted a valuation report that compared the subject property with six properties in the local area that it deemed to be comparable for the purposes of determining the current value of the subject property.

19The subject property was described by MPAC as an unconventional split level dwelling, with a lot size of 0.14 acre. It was built in 1994 and is of average construction, with a quality of construction code of 6.5 applied. It has 1,828 square feet of living area and an attached garage.

20The six properties in MPAC’s sample had time adjusted sale values ranging from $247,953 to $302,211. They sold between March 2015 and December 2016; all within 12 months of the statutory valuation date of January 1, 2016. Each has an attached garage.

21All of MPAC’s comparable properties are described as unconventional split level dwellings. They were built between 1995 and 2007 and are located within 600 metres of the subject property. Their lot sizes range from 0.14 to 0.17 acres. Each is designated as having average construction condition and has been assigned the quality construction code of 6.5. Living areas of the six comparable properties range from 1,161 square feet to 1,655 square feet.

22MPAC submitted that these six properties provide a range of value, within which the subject property should lie, as to the general nature of the neighbourhood. According to MPAC, the median value of the six, time adjusted sales is $296,608, indicating that the returned value of $288,000 is reasonable.

Board’s Analysis

23Having reviewed the details of the six comparable advanced by MPAC, the Board disregards three, as being too dissimilar from the subject property, as follows:

• Property 4 at 575 Birmingham Avenue has 1,225 square feet of living area, whereas the subject property has 1,828 square feet of living area;

• Property 5 at 477 Rene Drive was built in 2007, whereas the subject property was built in 1994; and

• Property 6 at 598 Birmingham Avenue has 1,161 square feet of living area, whereas the subject property has 1,828 square feet of living area.

24This leaves the Board with three properties for comparison to use to determine the subject property’s current value. The characteristics of these three properties, as compared to the subject property are summarized in Table A.

TABLE A

Subject Property

400 Menard Lane

554 Olcott Avenue

555 Farrell Avenue

Lot size (acres)

0.14

0.16

0.15

0.17

Year built

1994

1995

1999

2000

Current Value Assessment (CVA)

$288,000

$283,000

$305,000

$294,000

Time Adjusted Sale (TAS) value

N/A

$299,227

$300,709

$293,989

Living Area

1,828

1,601

1,655

1,495

TAS value / square foot

N/A

$186.90

$181.70

$196.65

CVA / square foot

$157.55

$176.76

$184.29

$196.66

25The Board notes that the mean time adjusted sale price per square foot of these three best comparable properties in evidence is $188.42. When applied to the square footage of the subject property, the result is $344,431 or $344,000, rounded. The Board finds the current value of the subject property is $344,000.

When reference is made of the assessments of similar properties in the vicinity, should the current value determined be reduced for the purpose of equitable assessment?

26MPAC submitted an equity analysis that compared the time adjusted sale value of 30 single-family dwellings in the vicinity of the subject property with their corresponding 2017 assessments. Comparisons of such assessments and time adjusted sale values are a common means of determining if similar properties in the vicinity are equitable assessed. The comparison of these assessments to time adjusted sale values is called the Assessment to Sale Ratio (“ASR”). The range of ASRs in MPAC’s sample was 0.796 to 1.282, with a median of 0.946.

27MPAC’s analysis did not include the ASRs of three of the six properties used by MPAC to determine current value (Properties 1, 3 and 5.)

Board’s Analysis

28In making its determination of any equity reduction, the Board must be convinced, by the best evidence available that the reduction is warranted. The Board finds that the mean ASR using all properties in evidence is the best evidence of whether or not a reduction in current value is required for the purposes of equitable assessment. When the ASRs of the three additional properties in MPAC’s evidence of current value are added to MPAC’s list of 30 properties in its equity analysis, the results are:

• Mean ASR – 0.965

• Standard Deviation – 0.109

• 95% Confidence Range – 0.037

• Low End of the Confidence Range – 0.927

• High End of the Confidence Range – 1.002

29Based on this sample, the Board can be 95% sure that the true average level of assessment of similar properties in the vicinity is between 92.7% and 100.2% of their current values. That indicates that it is more likely than not that similar property in the vicinity is, on average, assessed below its current value.

30Accordingly, the current value determined is reduced from $344,000 to $331,960, ($332,000 rounded) by applying the mean ASR of .965 from the analysis.

DECISION

31The Board finds the current value of the subject property is $344,000. There is evidence to support a reduction in this amount for the purposes of equitable assessment.

32The assessment is therefore reduced from $344,000 to $332,000.

33Neither MPAC nor the Town gave notice to the Board and the other parties, as required under Rule 40 of the Board’s Rules, of its intention to raise a change in assessment that would result in higher taxation. Increasing the assessment for 2017 and 2018 would, therefore, be unfair.

34Accordingly, the assessment of 377 Mayfair Avenue for the 2017 and 2018 taxation years is confirmed at $288,000 in the Residential property class.