Carey Eidlitz v. Municipal Property Assessment Corporation, 2019 CanLII 5476

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

ISSUE DATE: January 21, 2019

FILE NO.: WR 157843

Assessed Person(s): Carey Jeffrey Eidlitz, Susan Elizabeth Reece

Appellant(s): Carey Eidlitz

Respondent(s): Municipal Property Assessment Corporation ("MPAC") Region 15

Respondent(s): Town of Oakville

Property Location(s): 230 Gatestone Avenue

Municipality(ies): Town of Oakville

Roll Number(s): 2401-040-210-35600-0000

Appeal Number(s): 3259849 and 3340056

Taxation Year(s): 2017 and 2018

Hearing Event No.: 703565

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

Heard: August 22, 2018 in Oakville, Ontario

APPEARANCES:

Parties	Representative
Carey Eidlitz	Robert Baranowski
MPAC	John Cole, Leslie-Jane Hisey
Town of Oakville	Susan Price

DECISION OF THE BOARD DELIVERED BY DAN WEAGANT

INTRODUCTION

1Carey Eidlitz (the "Appellant") appealed the 2017 assessment of the subject property at 230 Gatestone Avenue because he believed the value returned by MPAC was too high. The Appellant also believes the assessment of the subject property should be between $1,376,000 to $1,520,000 when compared to the sales of comparable properties and the assessments of similar lands in the vicinity.

2MPAC returned a value of $1,618,000 for the subject property. In preparation for the hearing, MPAC determined an estimate of current value, based on the sales of comparable properties. This estimate of current value was $1,681,000. According to MPAC, this value was not intended as evidence of a higher assessment, but was submitted in support of the value returned. No notice for higher assessment, in accordance with Rule 40 of the Assessment Review Board's (the "Board's") Rules of Practice and Procedure (the "Rules") was filed by MPAC.

3The Town of Oakville (the "Town") concurred with MPAC.

4The Board must decide two things in this appeal. Firstly, the Board must determine, based on the evidence at the hearing, the current value of the subject property for the 2017 taxation year.

5Having reference to the assessments of similar lands in the vicinity, the Board must also decide if the current value determined needs to be reduced for the purpose of equitable assessment.

6Section 40.(26) of the Assessment Act, R.S.O. 1990, c. A.31 ("Act") states 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 did not dispose of the 2017 appeal before March 31, 2018. For that reason, this decision also applies to the 2018 taxation year.

DECISION

7The Board finds that the current value of the subject property is $1,751,000. The Board also finds that a reduction in the current value is required for the assessment to be equitable with the assessments of similar lands in the vicinity. The assessment is therefore reduced to $1,683,000.

8Neither 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. The Board will not, therefore, increase the assessment. The assessment of the subject property, at 230 Gatestone Avenue, is confirmed at $1,618,000 in the Residential property class, for the 2017 and deemed 2018 taxation years.

LEGISLATION

9In making its determination of these appeals, the Board must consider the relevant sections of the Act.

10Section 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.

11Section 19.(1) of the Act states:

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

12Section 40.(1) of the Act states:

40.(1) Appeal to Assessment Review Board. Any person, including a municipality, a school board or, in the case of land in non-municipal territory, the Minister, may appeal in writing to the Assessment Review Board,

(a) on the basis that,

(i) the current value of the person's land or another person's land is incorrect,

(ii) the person or another person was wrongly placed on or omitted from the assessment roll,

(iii) the person or another person was wrongly placed on or omitted from the roll in respect of school support,

(iv) the classification of the person's land or another person's land is incorrect, or

(v) for land, portions of which are in different classes of real property, the determination of the share of the value of the land that is attributable to each class is incorrect; or

(b) on such other basis as the Minister may prescribe.

13Section 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 Evidence

14MPAC provided a valuation report that sought to provide a range of value that the subject property would reasonably fall within. The valuation report compared the subject property with five properties that sold between June 2015 and August 2016. All five properties are located in the same general neighbourhood as the subject property.

15When making comparisons to the subject property, MPAC applied a Time Adjustment Factor ("TAF") to each sale value. The TAF is used to adjust the sale price so that it more closely reflects the value at which the properties would have sold on the valuation day of January 1, 2016. The TAFs used in this case were derived from a 'time changes over time' study that used 247 sales of residential properties in the area that took place in 2015 and 2016. A TAF for each month in the time period is applied to sales in that month to arrive at a Time Adjusted Sale ("TAS") value.

16The five proposed comparable properties submitted by MPAC have TAS values ranging from $1,411,168 to $1,659,287. In MPAC's opinion, this provides a range within which the current value of the subject property should reasonably lie. MPAC submitted that the subject property has a larger living area than all of the five comparable properties in its sample.

17MPAC's conclusion was that a reasonable current value of the subject property is therefore $1,681,000, and that the returned value of $1,618,000 should be confirmed.

Town's Evidence

18The Town submitted a brief comparison report that compared the subject property with four comparable properties; two of which were included in the sample submitted by MPAC. The Town noted that the average per square foot TAS values of its four proposed comparable properties of $590.33 is higher than the assessment value per square foot of the subject property ($525.50). This led the Town to the conclusion that, by comparison to the four most comparable properties it could find, the current value assessment of the subject property of $1,618,000 is reasonable.

Appellant's Evidence

19Robert Baranowski, representing the Appellant, took issue with MPAC arriving at an opinion of current value that was higher than the returned value. He viewed this as an attempt by MPAC to make a case for a higher assessment without giving the notice required to do so in the Act. In cross-examination, MPAC's assessor testified that the higher opinion value was only advanced to show that the returned value was reasonable.

20The Appellant advanced two separate approaches to determining the current value of the subject property. The first approach was to take the per square foot TAS value of 225 Gatestone Avenue; a nearby property considered by all three Parties, and apply that figure to the 3,079 square feet of the subject property. This approach resulted in a current value of $1,511,789.

21The second approach advanced by the Appellant was to consider the returned value of $1,618,000 as the current value. Both approaches, according to the Appellant should be subject to adjustment for equitable assessment under s. 44.3(b) of the Act.

The Board's Analysis

22The Board finds that the most comparable properties in evidence are proposed comparable properties 3 and 5, submitted by MPAC. These two properties have a similar lot size, same year built, the most similar living area and, like the subject property, both have a pool.

23The Board disregards MPAC's Comparable 1 at 325 Gatestone Avenue which was preferred by the Appellant. Comparable 1 has no swimming pool, has a smaller living area, and a much smaller finished basement than the subject property.

24When the mean TAS value per square foot derived from comparable sales 3 and 5, of $568.64, is applied to the subject property's living area of 3,079 square feet, the result is $1,750,842. The Board finds the current value of the subject property is $1,751,000 (rounded).

When Reference is made to the Assessments of Similar Properties in the Vicinity, Should the Current Value Determined be reduced to make it Equitable?

25The Appellant submitted that the assessment returned does not reflect an equitable assessment when it is compared to the assessments of similar properties in the vicinity.

26To account for this inequity, the Appellant submitted that there were five separate values the Board could consider as the properly adjusted assessment, after the adjustment for equity:

1. Using the current value determined by applying the per square foot TAS value of 226 Gatestone Avenue: $1,511.789:

   a) Apply the median Assessment to Sales Ratio ("ASR") of the five comparable properties in MPACs sample of 0.91 to arrive at an assessment of $1,375,727;

   b) Apply the median ASR in MPAC's equity analysis using 30 properties of 0.95 to arrive at an assessment of $1,436,199;

   c) Apply the median ASR of 32 properties comprised of MPAC's 30 equity properties and the two properties in its current value analysis that did not appear in the equity sample of 0.94 to arrive at an assessment of $1,421,081; Or,

2. Using the current value as returned of $1,618,000:

   a) Apply the median ASR of the five comparable properties in MPAC's sample of 0.91 to arrive at an assessment of $1,472,380;

   b) Apply the median ASR of 32 properties comprised of MPAC's 30 equity properties and the two properties it its current value analysis that did not appear in the equity sample of 0.94 to arrive at an assessment of $1,520,920.

27MPAC submitted an equity analysis that compared the TAS values of 30 single-family dwellings to their respective assessments. MPAC testified that these properties are all in the vicinity of the subject property, and that a map produced to illustrate their proximity demonstrates this fact.

The Board's Analysis

28In order to reduce the amount of the current value for the purposes of equity or fairness, the Board has to reduce a correct finding to one that is incorrect. In order to so, the Board must have sufficient evidence to suggest the current value determined should be reduced to be fair.

29MPAC's equity analysis included 30 properties, including three of the five comparable sales in their valuation report. The concept of similarity as it applies to the consideration of sales in determining equity is less burdensome than the same comparison for the purpose of determining current value. The concept of equitable assessment is intended to reflect that, on a balance of probabilities, it is reasonable to infer that similar properties are generally sharing the assessment and tax burden fairly.

30MPAC submitted that the chief issue for the Board to decide with respect to the equity question was which median ASR to apply to the current value determined. All Parties agreed that the median ASRs of the sample in evidence indicate that similar properties in the vicinity are in fact under assessed, when their assessments are compared to their current values, as determined by sales. MPAC further submitted that their equity analysis was most suitable for the purpose of determining the level of assessment because it compared the assessments and sale values of 30 properties. MPAC's position was that a 30 property analysis is statistically superior to a five property analysis as suggested by the Appellant in two of his five alternative approaches to determining a reduced assessment.

31MPAC's finding, using the original sample of 30 properties was that no adjustment to achieve equitable assessment was necessary because the median ASR in its analysis was 0.953, which lies within the range determined by MPAC to reflect equitable assessment. This range is 0.95 to 1.05.

32There are 34 properties in evidence that can be used to provide a sample in determining whether or not a reduction in the current value determined is required for the purpose of equitable assessment. These 34 properties are derived from MPAC's original list of 30 appearing in its equity analysis. There are also two properties in MPAC's current value analysis that do not appear on its list included in the equity analysis. Finally, there are two properties in the Town's current value analysis that do not appear in MPAC's original analysis. The Board finds that the total sample of 34 combined properties is the best available data for the determination of whether or not a reduction in the subject property's current value is required. There is no doubt that the 34 properties are similar to the subject property and that they are in the same vicinity.

33In 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. When the two additional properties in MPAC's valuation report and the two additional properties in the Town's current value analysis are added to the list of 30 properties in MPAC's equity analysis, the results are:

• Mean ASR - 0.961
• Standard Deviation - 0.069
• 95% Confidence Range - 0.023
• Low End of the Confidence Range – 0.938
• High End of the Confidence Range – 0.985

34These results indicate that it is very likely that similar single family dwelling properties in the vicinity are generally assessed below their current value. Based on this sample, the Board can be 95% sure that the all property in the vicinity is, on average, assessed between 93.8% and 98.5% of its current value. The Board finds that it would be unfair to assess this property at its current value if similar property in the vicinity is, on average, assessed below its current value. The Board finds that this is the best evidence of whether or not the current value determined for the subject property should be reduced, and applies the mean ASR of 0.961 to the current value determined.

35Accordingly, the current value determined of $1,751,000 is reduced by a factor of 0.961, for a reduced value of $1,682,711 ($1,683,000 rounded), for the purposes of achieving equitable assessment.

CONCLUSION

36The Board finds that the current value of the subject property is $1,751,000. The Board also finds that a reduction in the current value is required for the assessment to be equitable with the assessments of similar properties in the vicinity. The assessment is therefore reduced to $1,683,000.

37Neither 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. The Board will not, therefore, increase the assessment. The assessment of the subject property, at 230 Gatestone Avenue is confirmed at $1,618,000 in the Residential property class, for the 2017 and deemed 2018 taxation years.