Larisa Climova v. Municipal Property Assessment Corporation, Region 03, 2019 CanLII 29136

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

ISSUE DATE: April 05, 2019

FILE NO.: WR 159294

Assessed Person: Larisa Climova

Appellant: Larisa Climova

Respondent: Municipal Property Assessment Corporation ("MPAC"), Region 03

Respondent: City of Ottawa

Property Location: 2026 Saunderson Drive

Municipality: City of Ottawa

Roll Number: 0614-105-703-64600-0000

Appeal Number: 3320297 and 3346432 (deemed 2019 appeal)

Taxation Year: 2018 and 2019 (deemed appeal)

Hearing Event No.: 709591

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

Heard: March 18, 2019 in Ottawa, Ontario

APPEARANCES:

Parties	Representative
Larisa Climova	Self-represented
MPAC	Laura Kelleher
City of Ottawa	No one appeared

DECISION OF THE BOARD DELIVERED BY SCOTT McANSH

1Larisa Climova appeals the assessment of the property she owns at 2026 Saunderson Drive for the 2018 and 2019 taxation years. MPAC assessed the property at $381,000 for the 2018 taxation year and $387,000 for the 2019 taxation year. Ms. Climova takes the position that the proper assessment is $346,000.

2The property is in the Elmvale Acres area of Ottawa, which is a residential subdivision that was developed in and around 1960. The dwelling on the property is a 1,103 square foot bungalow, with a finished basement, built in approximately 1960. The dwelling had some renovations, including updating kitchens and bathrooms in 2001.

3In this appeal, I must determine two things. First, I must determine what the property likely would have sold for on January 1, 2016. That is the current value of the property. Once I have determined current value, I must determine if it would be equitable to assess the property at its current value.

4For the reasons that follow, I find that the current value of the property is $358,000. I also find that it would fair and equitable to assess the property at that value. I therefore reduce the assessment from $381,000 to $358,000 for the 2018 taxation year.

Legislation

5The Assessment Act, R.S.O. 1990. c. A. 31 (the "Act") requires that I determine two things in this appeal. First, clause 44(3)(a) requires that I determine the current value, or what the property would have sold for in an arm's length transaction on January 1, 2016. Once the current value has been determined, clause 44(3)(b) of the Act requires that I "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" but only if that adjustment would result in a reduction of the assessment.

6In addition to the 2018 taxation year appeal, there is a 2019 taxation year appeal before me. This is because subsection 40(26) deems Ms. Climova to have filed a 2019 appeal if the 2018 taxation year appeal is not finally disposed of by March 31, 2019.

Current Value

7Any determination of current value must consider if MPAC has met its "burden of proof as to the correctness of the current value of the land" set out in subsection 40(17). This Assessment Review Board (this "Board") considered that provision in some detail in Jay Patry Enterprises Inc. v Municipal Property Assessment Corporation, Region 05, 2019 CanLII 39629 (ON ARB), 2018 CanLII 70338 (ON ARB) ("Jay Patry"). The Board set out a procedure to follow, at paragraph 40, when current value is at issue. First, I must look at MPAC's evidence, on its own, to see if it can support its opinion of current value. If MPAC's evidence does not support its opinion of current value, I must then look at the taxpayer's evidence to see if it can support a current value determination. I will follow that procedure here.

MPAC's Evidence

8MPAC called Michel Benoit to provide evidence at the hearing. MPAC presented the sales of six proposed comparable properties. They were selected because they are bungalows in the area that have been renovated. Those suggested comparable sales are:

	Address	House Size	Renovation Year	Sale Date	Sale Price
	2026 Saunderson Dr.	1,103	2001
1	775 Adams Ave.	1,104	2008	Nov. 2015	$417,000
2	764 Dickens Ave.	1,107	2006	June 2015	$411,000
3	862 Weston Dr.	1,205	2000	May 2015	$399,000
4	2041 Tilson St.	1,035	2014	Aug. 2016	$398,000
5	1999 Dorval Ave.	1,289	2005	June 2015	$448,000
6	792 Colson Ave.	1,387	2003	Sept. 2016	$497,000

9MPAC time adjusted the sales using its standard time adjustment method of treating assessments as reflective of the January 1, 2016 value. I do not find that method convincing, given that it only works if MPAC's assessments are correct. Correctness of assessment is an issue that this Board was established to determine. I do not find MPAC's time adjustment study to be compelling. Further, MPAC provided a second sale of its Property 3, which took place in November 2017. MPAC's evidence is that there were no changes to that property between the sales. Yet its time adjusted sale price for the 2015 sale was $412,114 and the time adjusted sale price of the 2017 sale was $418,085. If the time adjustment study were accurate, those numbers should be closer to an exact match. I will not rely on time adjustment factors.

10MPAC stated that all six properties were similar to Ms. Climova's property. The sales range from $398,000 to $497,000. MPAC said that this supported its opinion of value of $381,000 because it had applied a cost to cure adjustment for water damage of $6,500 and because Ms. Climova's property is a corner lot, which is worth $13,798 less than these properties. Adding those arbitrary values to its opinion of $381,000 leads to a comparison value of $401,298, which is at the low end of the range. I do not accept that calculation.

11First, the cost to cure was for water damage in the basement that was observed on MPAC's June 13, 2017 inspection of the property. The evidence before me is that all of that damage was repaired by the fall of 2017. Property is assessed each year as it was on the second Tuesday after December 1 of the previous year, see Non-Profit Seniors Housing of Kenora v Municipal Property Assessment Corporation, Region 32, 2015 CanLII 58800 (ON ARB). For the 2018 taxation year, property is assessed as it was on December 12, 2017. There was no water damage on that date, so that adjustment should not be applied.

12Secondly, MPAC cannot meet its burden by adding values to its opinion of value that are not supported by evidence. It may be that Ms. Climova's lot, as a corner parcel, would sell for less, but MPAC could have used the sales of corner lots to establish that. The value of $13,798 was provided for the difference in value, but no justification was given for that value. MPAC must meet its burden through objective evidence, not arbitrary numbers it produces.

13MPAC's opinion of value is $381,000, but is has provided six properties that it says are similar that all sold for more. There is no clear, objective, path from MPAC's evidence to a value of $381,000. MPAC has not met its burden to prove the correctness of the current value.

Taxpayer Evidence

14Ms. Climova provided the sales of 13 properties to support her opinion of value. All of the properties are similarly sized bungalows with finished basements in the area. I have numbered those sales starting from 7, to organize them with MPAC's evidence.

	Address	House Size	Sale Date	Sale Price
	2026 Saunderson Dr.	1,103
7	2029 Saunderson Dr.	1,117	Oct. 2015	$350,000
8	2041 Saunderson Dr.	1,020	Nov. 2015	$357,000
9	2061 Saunderson Dr.	1,020	June 2015	$366,000
10	2044 Saunderson Dr.	1,033	Nov. 2016	$359,000
11	2001 Saunderson Dr.	1,110	Feb. 2016	$339,000
12	968 Chapman Blvd.	1,083	May 2015	$338,500
13	865 Wingate Dr.	1,221	Aug. 2015	$363,000
14	849 Chapman Blvd.	1,235	April 2016	$335,000
15	2034 Corry St.	1,008	July 2016	$374,000
16	2022 Tilson St.	1,113	June 2015	$350,000
17	866 Weston Dr.	1,110	March 2016	$363,000
18	2030 Arch St.	1,123	Aug. 2015	$365,000
19	840 Cork St.	1,183	Aug. 2015	$321,215

15Ms. Climova calculated the median sale price per square foot of these sales to be $314.47. Applied to her house size, this led to a suggested value of $346,855. She also took the mean sale price of the three properties that she said were most similar to hers: Sales 7, 11, and 16. The mean of those sales is $346,333.

16MPAC argues that Sale 11 is not comparable because it had serious foundation issues when it was sold, which would impact its sale value. Ms. Climova says that she also has some cracks in her home, so Sale 11 is comparable. I accept MPAC's evidence that the foundation issues at Sale 11 make its comparability questionable.

17MPAC also argued that a value per square foot analysis is only appropriate if properties are very similar, or are adjusted to be conceptually very similar. MPAC said that it was not an appropriate method here. I agree that a value per square foot is not generally the best method of determining the value of property. A far better method is bracketing, where comparable properties are rated as superior or inferior, creating a range of likely sale values. I will use that method to determine the likely sale value of Ms. Climova's property.

18I find that all of MPAC's suggested comparable properties are superior to Ms. Climova's. Sale 1 has a much more recent renovation. Sale 2 also has a more recent renovation. Sales 3 and 4 both have basement apartments. Finally, Sales 5 and 6 are larger homes.

19Sale 7 is slightly larger, and therefore superior to Ms. Climova's property. Sale 8 backs onto a park, so is also superior. Sale 9 does not have a garage, which Ms. Climova's property has, so it is likely inferior. Sale 10 also lacks a garage so is inferior. Sale 11 is inferior due to its foundation issues. Sale 12 is slightly inferior because it is very slightly smaller than Ms. Climova's house. Sale 13 is superior because the house is larger. Sale 14 has not been renovated, so is inferior. Sale 15 is superior because it had more recent renovations and a double car garage. Sale 16 is inferior because it has not been renovated. Sale 17 is superior because it has a basement apartment. Sale 18 is slightly superior, only because it is slightly larger. Finally, Sale 19 is inferior because it lacks renovations. In summary, my findings are:

	Address	Status	Sale Price
19	840 Cork St.	Inferior	$321,215
14	849 Chapman Blvd.	Inferior	$335,000
12	968 Chapman Blvd.	Inferior	$338,500
11	2001 Saunderson Dr.	Inferior	$339,000
16	2022 Tilson St.	Inferior	$350,000
10	2044 Saunderson Dr.	Inferior	$359,000
9	2061 Saunderson Dr.	Inferior	$366,000
7	2029 Saunderson Dr.	Superior	$350,000
8	2041 Saunderson Dr.	Superior	$357,000
13	865 Wingate Dr.	Superior	$363,000
17	866 Weston Dr.	Superior	$363,000
18	2030 Arch St.	Superior	$365,000
15	2034 Corry St.	Superior	$374,000
4	2041 Tilson St.	Superior	$398,000
3	862 Weston Dr.	Superior	$399,000
2	764 Dickens Ave.	Superior	$411,000
1	775 Adams Ave.	Superior	$417,000
5	1999 Dorval Ave.	Superior	$448,000
6	792 Colson Ave.	Superior	$497,000

20This table shows that there is some overlap in the sale prices of inferior and superior properties. The inferior sales indicate that Ms. Climova's property likely would have sold for more than $366,000, while the superior sales indicate that it likely would have sold for less than $350,000. It is highly likely, therefore that the property would have sold for something in the range of $350,000 to $366,000. I have no reason to prefer the higher or lower end of that range, so find that the most likely sale value is the midpoint of the range, or $358,000.

21The current value of the property for the 2018 and 2019 taxation years is $358,000.

Equity

22Once I have determined the current value, clause 44(3)(b) of the Act requires that I look at the assessment of similar land in the vicinity to determine if an assessment at current value would be equitable. If there is evidence that other property is assessed below its current value, it may also be fair to assess this property below its current value.

23Ms. Climova did not make any argument that it would be unfair or inequitable to assess the property at its likely sale value. MPAC entered an equity study, which look at the assessments of 30 bungalows with a similar quality of construction. I am satisfied that those are similar properties. However, MPAC included sales that took place in 2017, over a year from the valuation day, and used time adjustments to the sale prices. I do not think that properties that have sold more than a year form the valuation day are a good guide to value. I also do not find MPAC's time adjustments compelling, for the reasons set out above. The remaining sales are:

	Address	Assessment	Sale Price	Assessment to Sale Ratio
1	1969 Naples Ave.	$366,000	$440,000	0.832
2	1999 Dorval Ave.	$412,000	$448,000	0.920
3	792 Colson Ave.	$439,000	$497,000	0.883
4	775 Adams Ave.	$395,000	$417,000	0.947
5	764 Dickens Ave.	$402,000	$411,000	0.978
6	930 Weston Dr.	$377,000	$400,000	0.943
7	2041 Saunderson Dr.	$357,000	$357,300	0.999
8	866 Weston Dr.	$358,000	$363,000	0.986
9	862 Weston Dr.	$411,000	$399,000	1.030
10	2061 Saunderson Dr.	$378,000	$366,000	1.033
11	2029 Saunderson Dr.	$363,000	$350,000	1.037
12	2034 Corry St.	$375,000	$374,000	1.003
13	2041 Tilson Dr.	$405,000	$398,000	1.018
14	2044 Saunderson Dr.	$361,000	$359,000	1.006
15	2022 Tilson Dr.	$380,000	$350,000	1.086
16	2001 Saunderson Dr.	$359,000	$339,000	1.059
17	968 Chapman Blvd.	$407,000	$338,500	1.202
18	1969 Naples Ave.	$366,000	$300,000	1.220
19	1979 Saunderson Dr.	$390,000	$315,500	1.236

24The mean assessment to sale ratio of those sales is 1.022, with a 95% confidence interval of 0.048. That means that similar property in the vicinity is likely assessed at between 97.4% and 107% of its sale value. That does not indicate that property is under assessed. There is no need for an equity adjustment here.

Conclusion

25The current value of Ms. Climova's property is $358,000. There is no evidence that it would be unfair or inequitable to assess the property at that value. The assessment for the 2018 taxation year is reduced from $381,000 to $358,000 and the assessment for the 2019 taxation year is reduced from $387,000 to $358,000.