Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: May 13, 2019

FILE NO.: WR 157494

Assessed Person(s): Patricia Makuch, Yvan Gerard Latour

Appellant(s): Patricia Makuch, Yvan Gerard Latour

Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 28

Respondent(s): Bonfield Township

Property Location(s): 669 Pine Lake Road

Municipality(ies): Bonfield Township

Roll Number(s): 4826-000-002-28000-0000

Appeal Number(s): 3234961, 3314133 and 3367522

Taxation Year(s): 2017, 2018, and 2019

Hearing Event No.: 708768

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

Heard: November 28, 2018 in Bonfield, Ontario

APPEARANCES:

Parties	Representative
Patricia Makuch and Yvan Latour	Self-represented
MPAC	John Hyatt
Bonfield Township	No one appeared

DECISION OF THE BOARD DELIVERED BY LESLIE FLEMMING

Background

1669 Pine Lake Road (the “Subject Property”) is a single-family home on water which is quite large by comparison to other similar homes in the Township. Bonfield is a township of more modest dwellings on water, whereas the Subject Property is acknowledged to be “overbuilt” for this community. The assessment was returned in the amount of $869,000 for January 1, 2017. MPAC is now recommending a value of $765,000 but the owners argue that the current value is probably in the neighbourhood of $689,000 instead.

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.

3The Board must determine the value of the Subject Property on January 1, 2016, for the 2017 to 2019 taxation years (“current value”). An appeal for the 2017 and 2018 taxation years is presently before the Board. Section 40.(26) of the Act provides that the appellant is deemed to have made the same appeal for the subsequent taxation year if the appeal is not finally disposed of before March 31 of the subsequent taxation year. The Board has not disposed of the 2018 appeal before March 31, 2019. For that reason, this decision also applies to the 2019 taxation year.

4Patricia Makuch and Yvan Latour (the “Appellants”) have filed appeals for taxation years 2017 to 2019 with the Assessment Review Board (the “Board”), pursuant to s. 40 of the Act. It is their position that MPAC’s assessment of current value is too high and that the correct current value is $689,000. At this hearing, MPAC takes the position that its assessed value should be changed to $765,000.

5Pursuant to s. 40(11) of the Act, the Township of Bonfield is a party to this proceeding. However, Bonfield 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.

6Section 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.

7At the completion of the hearing, the Board reserved its decision. For the reasons that follow, I find that MPAC has failed to discharge its statutory burden to prove the correctness of the current value of the Property. Following the framework set out in Jay Patry Enterprises v Municipal Property Assessment Corporation, Region 05, 2019 CanLII 39629 (ON ARB), 2018 CanLII 70338 (ON ARB) WR152892 (“Patry Enterprises”) on the appropriate steps to take when MPAC has failed to meet its burden, I find that the Appellants have not provided sufficient evidence to prove that a particular current value is more likely than not. I therefore reduces the assessment for the 2017, 2018 and 2019 taxation years to the last uncontested assessment of $687,000. No equitable adjustment is required.

Relevant Legislation and Rules

8The Act:

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.

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

Valuation days

19.2 (1) 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

9The issue to be determined on this appeal is the correct current value of the Subject Property for the taxation years 2017 to 2019.

Discussion, Analysis and Findings

MPAC’s Evidence

10John Hyatt represented MPAC. He testified on behalf of MPAC and submitted into evidence a Valuation Report he authored dated December 11, 2017. Mr. Hyatt identified himself as a Property Valuation Specialist.

11Mr. Hyatt describes the Subject Property as being one of approximately 15 homes located on Pine Lake, a small lake west of Mattawa River Provincial Park. The home was built in 2008, a timber frame designed home on a year-round road situated on 5.92 acres of land with 1,390 feet of frontage on the lake. This is a seasonal recreational home, with a well, septic system, hydro, three bedrooms and two-and-a half bathrooms. It is 2,674 square feet (“sq. ft.”) on the first floor and 1,642 sq. ft. on the second. MPAC has ranked this home at 8.5 out of 10 with respect to the quality of construction.

12Mr. Hyatt explained the technique of assessing the value of residential properties by comparing them to similar properties sold at or near the valuation day, which in this cycle is January 1, 2016. Because many of the sales MPAC used for this purpose were not sold near the valuation day, MPAC uses a method of analyzing the trend in sales prices in a given community, and then applying these values to the sold values of comparable homes to estimate their values as of the valuation day. For this purpose, Mr. Hyatt based his Sales Ratio Trend Analysis on time adjustment factors derived from 530 residential sales occurring between January, 2012, and December, 2016. Mr. Hyatt selected five properties in the vicinity which included one seasonal residential dwelling (Property 1, 56 Fitzgerald Road) and four single-family detached homes on water.

13The following Table sets out the basic details of the five proposed comparable properties and the Subject Property as included in MPAC’s materials.

TABLE A: MPAC’S COMPARABLE PROPERTY SALES RE 669 PINE LAKE ROAD

	Subject Property	56 Fitzgerald Road	646 Nosbonsing Park Road	108 Pineland Drive	50 Sheilds Point Road	35 Talpine Road
Property Code & Description	(391) Seasonal/rec First Tier on Water	(391) Seasonal/rec First Tier on Water	(313) Single Family Detached on Water	(313) Single Family Detached on Water	(313) Single Family Detached on Water	(313) Single Family Detached on Water
Current Assessment	$765,000	$313,000	$568,000	$400,000	$533,000	$413,000
Sale Date		10/11/2016	09/22/2016	09/08/2014	12/14/2016	10/16/2014
Sale Price		$397,000	525,000	$400,000	$415,000	$340,000
Time-Adjusted Price		$396,756	$524,711	$400,401	$414,718	$340,319
Effective Frontage (Ft)	745 ft.	150 ft.	174 ft.	100.34 ft.	754 ft.	172 ft.
Effective Site Area (Acres)	5.92 ac.	1.2 ac.	0.96 ac.	0.49 ac.	4.63 ac.	0.87 ac.
Access	Year Round Road	Private Road	Year Round Road	Year Round Road	Year Round Road	Private Road
Effective Yr. Built	2008	2006	2002	1987	1998	1991
Quality Rating	8.5	6.5	6	6	6	6
Total Building Area (sq. ft.)	4,316	1,758	2,445	1,365	1,209	858
Finished Bsmt. Area (sq. ft.)	0	0	808	1,004	729
Detached Garage Size (sq. ft.)	1,658	908	755	746	1,403	1,431
Other Secondary Structures	Cabin (235 sq. ft.)	Carport (468 sq. ft.)

14Mr. Hyatt was asked to explain how he was able to use the five proposed comparable homes to support his conclusion of value in the amount of $765,000. He explained that there were simply no other home sales in the vicinity that were as large or as valuable as the Subject Property. Out of the five selected comparable homes, while properties 1 and 2 were not in Bonfield itself, properties 3, 4 and 5 were. He hoped that by using properties located near the Subject Property he could support his conclusion of value.

MPAC’s Submissions

15Relying on its evidence, MPAC’s submits that the correct current value for the taxation years 2017 to 2019 is $765,000. Mr. Hyatt had reduced the value from his initial current value assessment of $869,000 by 15% which he applied because the home was overbuilt for the area.

Appellant’s Evidence

16The Appellants both participated in the hearing and both gave evidence in support of their appeal.

17The Appellants filed documents with the Board, including the summaries of residential real estate sales in the District of Nipissing. The sales information was provided by a realtor, and set out the addresses of the properties, their listing prices, their sold prices and dates of sales, plus information relating to lot sizes, water front sizes, the number of bedrooms and bathrooms, the lakes they were located on, and information related to heating source, water source and sewage (generally septic systems for all the sales). The following Table B sets out the details of the five most valuable of these sales in a succinct format.

TABLE B: APPELLANTS’ COMPARABLE PROPERTY SALES (Over $550,000)

	Subject Property	51 Stepping Stone Lane	353 MacPherson Drive	56 Whispering Pines Lane	157 Road To Isles	445 MacPherson Drive
Lake	Pine	Trout	Trout	Trout	Trout	Trout
Sale Date		03/28/2016	06/30/2015	10/03/2014	04/29/2013	10/15/2014
Sale Price		$575,000	$610,000	$710,000	$725,000	$950,000
Time-Adjusted Sale Price		$575,000	$610,000	$710,710	$726,450	$950,950
Frontage (Ft.)	745 (effective)	Unknown	220	Unknown	Over 1,200	unknown
Site Area (Acres)	5.92	Unknown	3.3	Unknown	3.5	unknown
Year Built	2008	2004	1978	Unknown	1996	2001
Total Building Area (Sq. Ft.)	4,316	1,450	1,750	2,500	Unknown	Unknown
Type of Basement	None	Full, finished	Full, finished	Crawl space	Partial	None
Garage Size (Att’d or Det’d)	Detached; 1658 sq. ft.	2-car attached	2-car attached	3-car, attached	2-car, attached	Both attached and detached
Other Secondary Structures	Cabin

18The information also contained photographs of each of the residential sales. None of these properties were located in the Township of Bonfield, and the Appellants speculated that properties located on Trout Lake and Lake Nosbonsing, both much larger lakes than Pine Lake, would obtain some inherent value from the size of the lake itself. They did not have particulars as to this increase in value due to location, but suggested the homes in Bonfield on Pine Lake were never going to be as valuable as other real estate in Nipissing because the lake was smaller and the community not as wealthy.

19In addition to the Appellants’ submissions respecting home sales in the District, they also testified to the fact that the shore road allowance abutting their property is actually part of the Mattawa River Provincial Park. The Appellant produced copies of correspondence from Ontario Parks confirming this fact and setting out the restrictions included with the licence to use the Park property. In this case, the Appellants had sought to replace a worn dock with a new floating dock which was to be 126 feet in total length. In an email dated February 26, 2018, an Ontario Parks representative contacted Mr. Latour requesting further particulars of the dock design and location. This information was necessary prior to the issue of the permit. Mr. Latour also attached a copy of the permit No. WP-MAT-16-01 which set out the particulars of the authorized work, the conditions of how the work was to be carried out and what steps were to be taken with respect to disposal of waste material. The Appellant Yvan Latour testified that any future work on the Park property is not covered by the Permit, and that even the replacement of damaged dock boards in the future would require an updated permit.

20The Appellants submit that the fact that the shore does not belong to the property itself and is subject to Ontario Park regulations detracts from the value of the property on resale. The Appellants did not know what the monetary impact would be of this factor.

Appellants’ Submissions

21Relying on their evidence, the Appellants submit that the correct current value for taxation years 2017 to 2019 is $689,000. They testified that the 2012 current value for this property was $687,000. Using MPAC’s time adjustment factors, they calculated that the current value as of January 1, 2016, was $689,000.

FINDINGS

22Subsection 40(17) of the Act states that MPAC has the burden of proving “the correctness of the current value of the land.” As the Board found in Patry Enterprses at paragraph 21, the burden is around “current value” and not the assessment. That means that MPAC is required to prove the correctness of “the amount of money the fee simple, if unencumbered, would realize if sold at arm’s length from a willing seller to a willing buyer.”

23The panel in Patry Enterprises sets out a procedure to follow where current value is at issue, as in this section 40 appeal. It asks the Board to first consider MPAC’s evidence and to make a determination whether or not the evidence before it, on a balance of probabilities, proves the current value of the property. Where this is not the case, the Board will then consider the evidence presented by the Appellants to determine whether the Appellants’ evidence, on a balance of probabilities, is capable of proving the current value for the Subject Property. Where the evidence provided by both sides fails to prove the current value, the Board then “should fix the assessment at the last uncontested assessed value”.

MPAC’s Evidence and Current Value

24While MPAC’s evidence canvassed the sales prices of similar lakefront residential properties located either in or near the Township of Bonfield, MPAC was unable to find any comparable property sales within $240,000 of the current value proposed for the Subject Property. The explanation was simple: the Subject Property is “overbuilt for the area”. However, where none of the proposed comparable homes sold for more than $525,000, MPAC failed to provide evidence to substantiate the recommended assessment of $765,000. As noted in previous Board decisions, such as Patrick v Municipal Property Assessment Corporation, Region 02, 2019 CanLII 7194 (ON ARB), there must be a “pathway” showing not only how the value was arrived at but also that it is correct.

Does the Taxpayer’s Evidence Prove Current Value?

24The Appellants provided a number of sales that took place in the same District in which the Subject Property is located, but on different lakes. While the Appellants were able to find reasonably current sales and while the values of their proposed comparable properties in fact bracketed their suggested current value of the Subject Property, there were gaps in the information presented which made it impossible to compare the Subject Property with these suggested comparable properties. Table B above sets out the five most valuable comparable property sales in the District of Nipissing provided by the Appellants. While the Appellants expanded the area of their search in order to capture more properties that would be similar to or more valuable than the Subject Property, their level of detail is inconsistent, making it impossible to compare the properties on as many features as necessary to form a true opinion of current value. For example, the very important size details, including building area, site area and waterfront dimensions are not recorded for all the five sales set out. As a consequence, due to insufficient detail, it is impossible to determine whether or not the proposed property sales are in fact comparable at all.

25In this case, like MPAC, the Appellants have not satisfied the Board as to the current value of the Subject Property. Applying Patry Enterprises, the Board therefore reduces the assessment for the 2017, 2018, and 2019 taxation years to the last uncontested assessment of $687,000. The Board is unable to make a finding as to the current value of the Subject Property on January 1, 2016, on the evidence presented.

26No adjustment in the assessment on the ground of equity is required.