Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: June 25, 2019

FILE NO.: WR 160342

Assessed Person(s): Susan Elizabeth Rennick and Donald Dean Rennick

Appellant(s): Susan Rennick and Donald Rennick

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

Respondent(s): City of North Bay

Property Location(s): 392 Surrey Drive

Municipality(ies): City of North Bay

Roll Number(s): 4844-050-077-61200-0000

Appeal Number(s): 3343594, 3343593 and 3367485

Taxation Year(s): 2017, 2018 and 2019

Hearing Event No.: 713964

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

Heard: May 6, 2019 in North Bay, Ontario

APPEARANCES:

Parties	Representative
Donald Rennick	Self-represented
MPAC	Louise St. Jean Brittany Kee
City of North Bay	No one appeared

DECISION OF THE BOARD DELIVERED BY DAN WEAGANT

INTRODUCTION

1The subject property, located at 392 Surrey Drive, has an assessment of $398,000 for the 2017 taxation year. Susan and Donald Rennick (the “Appellants”) believed this assessment was too high and filed an appeal to the Assessment Review Board (the “Board”).

2Subsequent to that appeal, MPAC conducted an investigation and property review on the assessment and increased the assessment for the 2018 taxation year to $429,000. Following that assessment change, MPAC further amended the assessment for the 2019 taxation year to $419,000.

3The Appellants believe the assessment should be between $375,000 and $385,000.

4The 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

5The Board finds the current value of the subject property is $420,000. The Board also finds that there is evidence to support a reduction in this amount in order to make it equitable with the assessments of similar lands in the vicinity.

6Accordingly, the assessment of 392 Surrey Drive is reduced as follows:

• For the 2017 taxation year – from $398,000 to $392,000;
• For the 2018 taxation year – from $429,000 to $392,000; and
• For the 2019 taxation year – from $419,000 to $392,000,

all in the Residential property class.

LEGISLATION

7In making its determination of these appeals, the Board must consider the relevant sections of the Assessment Act, R.S.O. 1990, c. A.31, (the “Act”).

8Section 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.

9Section 19.(1) of the Act states:

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

10Section 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

11MPAC submitted a valuation report that considered the sales of five properties in the City of North Bay that it deemed to be comparable with the subject property. These five properties are located from 0.18 to 0.73 kilometres from the subject property. They sold between March 2012 and November 2016 for prices ranging from $335,000 to $480,000.

12MPAC compared the characteristics of each of the five comparable properties with those of the subject property. When these characteristics were compared, MPAC determined that the subject property’s current value should fall between the sale values of Comparable Properties No. 2 and No. 5; both of which sold near the valuation day for $357,000 and $480,000 respectively.

13Ms. St. Jean testified that when the value adjustments for differences between the subject property and these two comparable properties are applied, the subject property’s value is $429,000. In arriving at her conclusion Ms. St. Jean highlighted the following differences between the subject property and comparable properties No. 2 and No. 5:

	Comparable property No. 2 – 29 Ellendale Drive (Inferior)	Comparable Property No. 5 – 46 Stone Manor Drive (Superior)
Lot Size	Smaller than subject property	Smaller than subject property
Main Building Size	Smaller than subject property	Smaller than subject property
Basement Size	Smaller than subject property	Smaller than subject property
Finished Basement Area	Smaller than subject property	Slightly larger than subject property
Effective Year Built	Newer than subject property (by 4 years)	Newer than subject property (by 23 years)
Garage Size	Smaller than subject property	Smaller than subject property
Bathrooms	0.5 less than subject property	0.5 less than subject property

Appellants’ Case

14The Appellants relied on a comparison of the assessments of other properties to arrive at a current value of the subject property. The Board’s consideration of that evidence follows under the ‘Equity of Assessment’ section of these reasons.

15In addition, the Appellants submitted that MPAC’s comparable properties were not sufficiently similar to the subject property to be meaningful indicators of the subject property’s current value. Mr. Rennick submitted that:

• The range of value between the highest valued ‘inferior’ property and the lowest valued ‘superior’ property among the five MPAC comparable properties was approximately $123,000, which is too broad of a range to be meaningful;
• While specific value adjustments were applied to the subject property to reflect its differences from the comparable properties, MPAC provided no source for the value of these adjustments; and
• The selected comparable properties did not have sufficient comparability owing to location, lot size and age.

16The Appellants further submitted that MPAC had not met its onus of burden of proof as provided for under s. 40(17) and as a result, its evidence should be disregarded by the Board.

Is a reduction in the current value necessary to achieve equitable assessment when reference is made to the assessments of similar properties in the vicinity?

17The Appellants submitted that s. 44.(3)(b) requires the Board to have reference to the assessments of similar properties and where necessary reduce the current value determined to make the subject property’s assessment equitable with those similar properties.

18He interpreted this wording to mean that the legislators, having elected to consider sales as a determining factor for current value, were intending that sales should not be considered as part of the equity consideration of s. 44.(3).

19Accordingly, he submitted that only assessments should be used for the equity comparison. As a result, the Appellant submitted a summary of six properties that he deemed to be sufficiently similar to compare with the subject property with respect to assessment. The summary appears as Table A.

TABLE A

	Lot area (acres)	Building Area (square feet)	Year built	2016 CVA	2016 CVA / square foot
Subject Property	0.28	1,921	1982	$429,000	$223.32
1 Lakeview Drive	0.21	1,828	1983	$343,000	$187.64
2 Lakeview Drive	0.36	1,859	1973	$328,000	$176.43
3 Lakeview Drive	0.21	2,540	1981	$416,000	$163.78
104 Willingdon Drive	0.27	2,627	1981	$503,000	$191.47
127 Willingdon Drive	0.37	1,879	1979	$389,000	$207.03
156 Willingdon Drive	0.17	1,759	1985	$341,000	$193.86

20The Appellant submitted that the two most similar properties in this sample are 1 Lakeview Drive and 3 Lakeview Drive. He surmised that if the subject property was assessed at $380,000 as he believes is correct, the assessment per square foot would work out to $197.81 per square foot. When this value is compared to the per square foot assessment values of his two most similar properties of $187.64 and $163.78, the Appellant submitted that his suggested assessment is a reasonable result.

21MPAC 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 0.886 to 1.139, with a median of 1.003.

22According to MPAC, no adjustment to the current value determined is required because the median ASR falls above 1.00 which indicates that similar properties in the vicinity are being assessed slightly above their current value.

Board’s Analysis

Current Value

23The Appellant’s submissions focused on the perceived shortcomings of MPAC’s analysis. In his view, there was not sufficient information to determine if MPAC’s adjustments were accurate. He focused on a specific value attributed to central air conditioning by MPAC of approximately $8,000. He countered that value by testifying that he had received quotes from area contractors for an amount of approximately half that amount. He held this discrepancy as an indication of the unreliability of MPAC’s source data.

24The Appellant submitted that MPAC had not met its onus of burden of proof of the current value of the subject property, as the range determined by sales was, in his view, too broad. This, combined with the absence of source data for market values, reflected his submissions on the current value. Any additional factual data and testimony given by the Appellant was related to the equity of the current value as the assessment.

25MPAC countered the Appellant’s submissions by explaining that it doesn’t determine market value by assembling a list of attributes and their respective values to arrive at a current value. Rather, it relies on sales data in the market and makes relative adjustments according to what the market indicates those adjustments are valued at. To illustrate, MPAC explained that while a new central air conditioning unit might cost $4,000 to install, their sales data shows that central air conditioning, as part of an open market sale, is likely to add approximately $8,000 in value to that sale.

26MPAC further acknowledged that the range of value demonstrated by their comparable sales was relatively large. However, they were able to make meaningful adjustments to that range to arrive at a value that was reasonable.

27When considering MPAC’s evidence and specifically the property details of its five comparable properties, the Board disregards comparable properties 3, 4 and 5 for the following reasons:

• Comparable No. 3 and Comparable No. 4 are two-storey dwellings, whereas the subject property is a one storey or bungalow dwelling; and
• Comparable No. 5 has an effective year built of 2010, whereas the subject property has an effective year built of 1987.

28The Board prefers MPAC’s Comparable properties No. 1 and No. 2 as indicators of the value of the subject property. Property No. 1 has a smaller lot, a smaller main living area, 1.5 fewer bathrooms, a smaller garage and a larger finished basement area. Its effective year built is four years newer than the subject property. Property No. 2 has a smaller lot, a smaller main living area, 0.5 fewer bathrooms, a smaller garage and a smaller finished basement area. Its effective year built is one year newer than the subject property.

29The Board finds these two properties to be the best comparable properties in evidence because:

• They are located in close proximity to the subject property;
• They have sales dates within 6 months of the January 1 2016 valuation day;
• They have effective year built dates within 4 years of the subject property;
• They have forced air heating and three bedrooms, like the subject property;
• Their living areas are within 16% of the living area of the subject property: and
• They have similar basement areas as the subject property.

30The chief difference between the subject property and comparable properties No. 1 and No. 2 is the main living area. Comparable No. 1 has an area of 1,614 square feet and Comparable No. 2 has an area of 1,602 square feet. The subject property has an area of 1,921 square feet. Comparable properties No. 1 and No. 2 both sold within six months of the valuation day, for $346,100 and $357,000 respectively. When these sale prices are divided by the properties’ respective main level square footage, the results are $214.44 and $222.85 respectively, with a mean of $218.65. When this value is applied to the subject property’s main living area of 1,921 square feet, the result is $420,026.

31The Board finds that the best evidence of current value of the subject property is its comparison to Comparable Properties No. 1 and No. 2 advanced by MPAC. The current value of the subject property is $420,000, rounded.

Equity of Assessment

32The concept of reducing the current value determined to make the subject property’s assessment equitable with that of similar properties in the vicinity requires the Board to change a correct assessment finding to one that is incorrect to make it fair and equitable. Adjustments for this purpose cannot therefore be made without compelling evidence to do so.

33The Appellant’s case relied on the comparison of the assessments of six similar properties in the vicinity of the subject property. The six similar properties did not have a sale value in evidence. Accordingly, the Appellant compared the assessment per square foot of each property to arrive at a mean per square foot assessment amount.

34This approach allows similar properties of differing sizes to be compared on a common element; in this case, assessment per square foot.

35When the median ($189.55) and average ($186.70) assessment per square foot values of the six similar properties cited by the Appellant are applied to the subject property’s 1,921 square feet of living area, the resulting range is $358,651 to $364,125. This range ignores the other differences between the properties as compared to the subject property.

36MPAC’s equity analysis indicates that, when the assessments of 30 similar properties in the vicinity of the subject property are compared with their time adjusted sale values, the result shows that properties are generally assessed above their current value. MPAC relies on a median ASR to decide if the current value of a property should be reduced to arrive at an assessment that is equitable.

37In making its determination of any equity reduction, the Board must be convinced, by the best evidence available that the reduction is warranted. This case requires the Board to decide between two different approaches to determining whether or not an adjustment to the current value determined is necessary to achieve equitable assessment of the subject property.

38MPAC submitted an equity study that relies on the comparison between the assessments of 30 similar properties in the vicinity and their respective time adjusted sale prices. That is one method of determining the equity issue.

39The Appellant submitted a comparison of six similar properties in the vicinity and, making adjustments for the different building sizes of those six properties and the subject property, developed a range of value that the assessment of the subject property should fall within.

What is the best method of determining if an equity adjustment is necessary under [s. 44(3)](https://www.canlii.org/en/on/laws/stat/rso-1990-c-a31/latest/rso-1990-c-a31.html#sec44subsec3_smooth)(b) of the [Act](https://www.canlii.org/en/on/laws/stat/rso-1990-c-a31/latest/rso-1990-c-a31.html)?

40In Municipal Property Assessment Corp v Schumacher, [2016] OJ No 3400, 2016 ONSC 3239, 267 ACWS (3d) 956, 56 MPLR (5th) 55, 90 OMBR 353, 2016 CarswellOnt 10197 (“Schumacher”), the Court found:

Section 44(3)(b) does not specify any particular methodology.

41Both Parties made submissions regarding the other’s equity submissions. The Appellant submitted that by using sales as part of a calculation, MPAC was not meeting the letter or spirit of s. 44(3)(b), which he submitted, only contemplates reference to the assessments of similar properties in the vicinity. By contrast, MPAC submitted that the Appellant’s approach lacks a sufficient number of similar properties (6), whereas MPAC’s evidence includes a comparison of the subject property to 30 similar properties in the vicinity.

42The Parties both believe their own method is the best of the two. Schumacher tells us that no particular methodology is superior to any other. The question of which method is the best is the Board’s to answer.

43For guidance in making such a decision, the Board turns to Trizec Equities Ltd v Ontario (Regional Assessment Commissioner, Region No. 27) [1988] OJ No 182, 27 OAC 203, 37 MPLR 175, 8 ACWS (3d) 399 (Trizec), where Justice Saunders stated:

All points of comparison must be considered. The Board must make a factual finding, based on such a consideration. One point of similarity such as use may be, but is not necessarily, determinative. Some similarities may be overridden by other characteristics and some differences may be subordinated.

44This finding was confirmed in Municipal Property Assessment Corporation v. Loblaw Properties Limited, 2017 ONSC 1299 and is informative in this case, because it directs that any reasonable method that compares as many points of comparison as is available would be better, and that, while one point of comparison may be satisfactory in some cases, where multiple points are in evidence, they must be considered.

45As in any other aspect of an appeal before this Board, the probative value and the relative weight of these points of comparison rest with the Board.

46Both Parties advanced ‘use’ as a point of comparison. Use is a fundamental aspect of both Parties’ submissions; all of the similar properties in evidence are single family dwellings, not on water and within one kilometre of the subject property. At that point, the two methods diverge, with MPAC making a comparison of their 30 properties’ assessments and their corresponding time adjusted sale values.

47The Appellant goes on to compare the assessments of his six similar properties to the subject property in terms of age, size and location of those properties along with their respective assessments.

48The Appellant’s analysis took more points of comparison into account. Further, the Board finds that the points of comparison he introduced were relevant to the question posed by s. 44.(3)(b). In summary, the Appellant’s equity analysis shows a comparison of the square footage of living area of each property, their respective lot size, their age and their assessments, as follows:

Similar Property	Year Built	Assessment ($)	Lot size (Acres)	Dwelling size (Square Feet)	Assessment per Square Foot ($)
1 Lakeview Drive	1982	343,000	0.21	1,828	187.64
2 Lakeview Drive	1973	328,000	0.36	1,859	176.74
3 Lakeview Drive	1981	416,000	0.21	2,540	163.78
104 Willingdon Drive	1981	503,000	0.27	2,627	191.47
156 Willingdon Drive	1985	341,000	0.17	1,759	193.86
127 Willingdon Drive	1979	389,000	0.37	1,879	207.03

49Similarly, MPAC’s evidence included the same data for the five properties advanced in its determination for current value. One property, 156 Willingdon Drive was common to both submissions. That data is summarized as follows:

Similar Property	Year Built	Assessment ($)	Lot size (Acres)	Dwelling size (Square Feet)	Assessment per Square Foot ($)
29 Ellendale Drive	1991	374,000	0.14	1,614	231.72
37 Ellendale Drive	1988	369,000	0.14	1,602	230.33
46 Carriage Crescent	1991	329,000	0.27	1,643	200.24
46 Stone Manor Drive	2010	462,000	0.18	1,694	272.72

50The Board disregards the property at 46 Stone Manor Drive as it was built 28 years after the subject property. The Board also disregards 3 Lakeview Drive and 104 Willingdon Drive as each of these properties has a dwelling size that is 32% and 37% larger than the subject property respectively. This is a broad range for a comparison of properties of this size. The seven remaining single family dwellings in this joint sample were all built within nine years of the subject property, with lot sizes somewhat smaller to somewhat larger and building sizes that are all within 16% of the floor area of the subject property.

51The mean per square foot assessment of these nine properties with these same points of comparison is $203.94. When applied to the subject property’s 1,921 square feet of living area, the result is $391,768. The Board finds that this represents an equitable assessment when reference is made to the assessments of similar properties in the vicinity and when all of the points of comparison in evidence are used. The Board finds that the range of points of comparison in this sample makes it superior to the larger sample submitted by MPAC, which only used ASR and local vicinity as selection criteria.

52Accordingly, the Board finds that the assessment of the subject property is reduced, from the current value determined, of $420,000 to $392,000 (rounded), for the purpose of equitable assessment.

CONCLUSION

53The Board finds the current value of the subject property is $420,000. The Board also finds that there is evidence to support a reduction in this amount in order to make it equitable with the assessments of similar lands in the vicinity.

54Accordingly, the assessment of 392 Surrey Drive is reduced, as follows:

• For the 2017 taxation year – from $398,000 to $392,000;
• For the 2018 taxation year – from $429,000 to $392,000; and
• For the 2019 taxation year – from $419,000 to $392,000,

all in the Residential property class.