Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: March 21, 2019

FILE NO.: WR 157493

Assessed Person(s)/Appellant(s): Melissa June McCuaig and Keith Thompson McCuaig

Respondent(s): Municipal Property Assessment Corporation (“MPAC”), Region 32

Respondent(s): Town of Marathon

Property Location(s): 30 Aspendale Drive West

Municipality(ies): Town of Marathon

Roll Number(s): 5859-000-004-17136-0000

Appeal Number(s): 3266281 and 3314920

Taxation Year(s): 2017 and 2018

Hearing Event No. 708064

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

Heard: November 27, 2018 by telephone conference call

APPEARANCES:

Parties	Representative
Melissa McCuaig and Keith McCuaig	Keith McCuaig
MPAC	Brittany Kee Glenn Spiess
Town of Marathon	Chuck Verbo

DECISION OF THE BOARD DELIVERED BY LESLIE FLEMMING

Background

1Melissa McCuaig and Keith McCuaig are the owners of 30 Aspendale Drive West in the Town of Marathon (“Subject Property”). The Subject Property is a single-family detached home not on water in the Town of Marathon (“Town”), built in 1973. It is a bungalow, with an attached garage.

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. The Subject Property was assessed in the amount of $139,000 for 2017 taxation year and $137,000 for 2018 taxation year. It is these assessed values that are under appeal in the current proceeding.

Preliminary Issues

3Mr. McCuaig had advised MPAC that he was contesting the validity of an assessment notice that came out in November 2016. He thought it was an unlawful notice. MPAC, represented by Ms. Kee for this issue only, argued that the notice came out prior to the end of November 2016. Under s. 36 of the Act (excerpted below), “assessments may be made anytime between January 1 and the second Tuesday following December 1”.

4The Board ruled in favour of MPAC’s argument. The parties clarified that the value under appeal was the value contained in the notice received in November.

5A second issue, raised by Mr. Spiess, MPAC’s representative, was that Mr. McCuaig had filed no documentation in advance of the hearing. Mr. Spiess objected to Mr. McCuaig being allowed to make representations at the hearing.

6The Board noted that Mr. McCuaig would be permitted to give verbal testimony and to cross-examine MPAC’s witnesses should he wish to do so. He would not be permitted to file any documentary evidence at the hearing because he had failed to comply with the Board’s Rules of Practice and Procedure, regarding advance disclosure of evidence.

7At that time Mr. McCuaig advised the Board and the participants that he did not intend to make any comment whatsoever during the hearing. The Board asked him if he would prefer to withdraw his appeal than to proceed without participating himself, but he chose to proceed. He stayed on the line.

8Therefore, the appeal proceeded on the ground that the values given for the Subject Property for 2017 and 2018 taxation years were too high.

9Pursuant to s. 40(11) of the Act, the Town of Marathon is a party to this proceeding. However, the Town of Marathon did not advise the Board of its position on the issues raised in these appeals, but did have a representative, Chuck Verbo, was present at the hearing as an observer.

10Section 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 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.

11At the completion of the hearing, the Board reserved its decision at the Appellant’s request. For the reasons that follow, the Board finds that the 2017 and 2018 tax years is $137,000. An equitable reduction of this value is not required.

Relevant Legislation and Rules

12The 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 the period consisting of the four taxation years from 2013 to 2016, land is valued as of January 1, 2012.

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

36.(1) Except as provided in section 32, 33 o4 34, assessment of land under this Act shall be made annually at any time between January 1 and the second Tuesday following December 1.

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.

13The Board’s Rules of Practice and Procedure:

37. On or before the filing deadline set out in the schedule of events for a proceeding, each party must file all materials that they intend to rely on at a hearing event, including:

(a) all evidence, including expert reports;

(b) statements of issues and responses, and

(c) witness statements.

45. All parties must provide a copy, in paper or electronic form, of all relevant documents in their possession, control or power to all other parties in the proceeding, except for privileged documents.

46. A document, including an expert report, will only be admitted into evidence at a hearing event if it has been disclosed, and filed with the Board, in accordance with these Rules, unless the Board determines that there are exceptional circumstances.

Issue

14The issue to be determined on this appeal is the correct current value of the Subject Property for the taxation years 2017 and 2018.

MPAC’s Evidence

15Mr. Spiess filed a Valuation Report dated May 4, 2018, which had been prepared by him, along with an Equity Analysis Report.

16Mr. Spiess advised that he assessed the Subject Property following an inspection by himself in April 2013. At that time he measured the Subject Property’s residence, and then he reviewed this building in 2018.

17The Subject Property is a bungalow located in approximately the centre of the Town. It is in a subdivision with homes built at approximately the same time as the Subject Property. The building area of the Subject Property is 1,840 square feet (“sq. ft.”) and MPAC ranks it as having a construction quality value of 6 out of 10. The Subject Property has been upgraded and the effective year built is 1992. The lot is 0.2 acres in size.

18The Act requires MPAC to estimate the “current value” or the amount that a willing buyer would pay for the property. It is usual in residential property assessment that MPAC will use a method called “direct sales comparison” to evaluate properties. This method involves comparing the Subject Property with similar properties in the same neighbourhood which have sold near to the valuation day, which in this cycle is January 1, 2016. For this purpose, Mr. Spiess selected six single detached home sales in the neighbourhood which occurred between April 2012, and November 2014. The six homes were compared as to size, floor area, lot size, structure condition, heating type, the number of bathrooms, and whether or not the residences had garages or other secondary structures on site.

19In order to make sure that the values of the proposed comparable homes were estimated as close as possible to the valuation day, January 1, 2016, Mr. Spiess employed a method of estimating the values of a number of sales occurring in the area between 2012 and December 2016 to determine the monthly change in values. This technique is common in respect of residential assessment. Mr. Spiess included information respecting the 527 home sales he used to derive the monthly change in value. He determined that prices had arisen during those months only 0.55 %.

20Mr. Spiess listed the descriptions of the six sold homes he used, setting out the date of the sale, and also his opinion as to whether each comparable home was more expensive or less expensive than the Subject Property. He included photographs of each proposed comparable home sale in his materials. He was able to estimate the Subject Property’s value in comparison to the six sales.

21The six homes are set out in the following table, along with some basic information about their sizes, the lot sizes, and their selling prices and dates of sale. Note that this chart uses actual sale prices because the time-adjustments made by MPAC are very small. Using actual sale prices does not distort the nature of the information in this case. All six homes had construction quality ranked at 6 out of 10. All were built in the 1970s.

TABLE A: COMPARABLE HOME SALES IN MARATHON

Address	Site Area (acres)	Building Area (sq. ft.)	Basement Area (sq. ft.)	Finished Basement Area (sq. ft.)	Sale Date	Sale Price
Subject Property	0.2	1,840	1,756	310
13 Gullwing Street	0.27	1,255	1,238		01/17/2014	$110,000
6 Pinewood Walk	0.17	1,130	1,130	500	09/27/2012	$116,000
11 Van Horne Crescent	0.23	1,111	1,093		08/24/2012	$115,000
37 Bastedo Crescent	0.2	1,568			11/13/2014	$135,000
6 Bastedo Crescent	0.23	1,104	1,085	504	07/04/2012	$137,000
30 Lloyd Irwin Street	0.19	1,012	1,012	341	08/08/2013	$113,308

22Mr. Spiess summed up by advising that the Subject Property had undergone a major renovation, which included replacement of most of interior features and exterior siding and roof. In his opinion, the Subject Property was more valuable than all six proposed comparable homes, with the possible exception of 6 Bastedo Crescent. This property was as close a comparable as he could find.

MPAC’s Submission

23Relying on its evidence, MPAC submits that the correct current value for the taxation years 2017 and 2018 is $137,000.

Appellant’s Evidence

24The Appellant provided no evidence, and waived his opportunity to cross-examine Mr. Spiess.

Town’s Evidence

25The representative of the Town provided no evidence. Mr. Verbo was permitted to ask two questions of the representative from MPAC. The first was whether the values of homes in the Town reflected the closure of the Mill in the Town in 2008. Mr. Spiess answered that the values reflected the market. Mr. Verbo also asked how many neighbourhoods were in the Town, and Mr. Spiess advised that there are two. Aspendale Drive is in the older section of town.

Appellant’s Submission

26The Appellant made no submissions.

Town’s Submission

27The Town made no submissions.

DECISION

28The evidence presented by MPAC was compelling and cogent. The evidence was not challenged in cross-examination. Mr. Spiess offered a coherent explanation of how he used the direct sales comparison method of analyzing the value of the Subject Property, and his six proposed sales, accompanied by descriptions and photographs, confirmed the assessment. The correct current value of the Subject Property is $137,000 for the 2017 and 2018 taxation years.

29The Subject Property and the two Bastedo Crescent properties are similar. #37 Bastedo Crescent and the Subject have the same size lots, while #6 Bastedo Crescent has a slightly larger lot. The Bastedo Crescent comparable homes are smaller than the Subject Property, but both have large detached garages. The garage at 37 Bastedo Crescent is larger than the Subject Property’s while the garage at 6 Bastedo is pre-engineered steel and approximately 46 feet smaller in area. 6 Bastedo also has 200 sq. ft. more finished basement area than that Subject Property. Those properties are both, on balance, similar to the Subject Property and sold for $135,000 and $137,000, amply supporting MPAC’s recommended value.

30In conclusion, MPAC recommended a current value of $137,000 for both 2018 and 2019, which the Board accepts.

31The Board therefore reduces the assessment for 2017 from $139,000 to $137,000. The Board also confirms the assessment for 2018 in the amount of $137,000.

32An equitable reduction of the current value of the Subject Property, pursuant to s. 44.(3)(b) of the Act, is not required.