Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: January 31, 2019

FILE NO.: WR 155092

Assessed Person(s): Linda Christie McConomy

Appellant(s): Barry McConomy

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

Respondent(s): Township of Mattawan

Property Location(s): 654 Moosehead Road

Municipality(ies): Township of Mattawan

Roll Number(s): 4819-000-001-12250-0000

Appeal Number(s): 3265680, 3314241

Taxation Year(s): 2017 and 2018

Hearing Event No. 702367

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

Heard: On August 15, 2018 in Mattawa, Ontario

APPEARANCES:

Parties

Representative

Barry McConomy

Self-represented

MPAC

Blair Adams

Township of Mattawan

No one appeared

DECISION OF THE BOARD DELIVERED BY LESLIE FLEMMING

Background

1Linda Christine McConomy and Barry McConomy are the owners of 654 Moosehead Trail in the Township of Mattawan (the “Subject Property”), which is a residential single family detached home on water. This home, situated on almost four acres of land, is on the shore of Lake Chant Plein in the area of the Town of Mattawa.

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.

3MPAC has assessed the value of the Subject Property, as of January 1, 2016, at $511,000. Consequently, the Assessment Review Board (the “Board”) must determine the value of the Subject Property on January 1, 2016 for the 2017 to 2018 taxation years (“current value”).

4Linda McConomy and Barry McConomy (the “Appellants”) have filed appeals for taxation years 2017 and 2018 with 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 $424,780. At this hearing, MPAC takes the position that its assessed value should be changed to $510,000.

5Pursuant to s. 40.(11) of the Act, the Township of Mattawan is a party to this proceeding. However, the Township did not advise the Board of its position on the issues raised in these appeals, and no one appeared at the hearing on the Township’s 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 of the municipal tax burden according to the value of the property possessed by each ratepayer. MPAC did not take a position nor enter evidence related to equity; nor did the Appellants. 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, the Board finds that the current value for the 2017 to 2018 tax years is $425,000.

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.

19.(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: …

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.

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 2018.

Discussion, Analysis and Findings

MPAC’s Evidence

10Blair Adams, a Property Valuation Analyst, represented MPAC. He gave the evidence on behalf of MPAC and provided a Valuation Report which he authored dated February 26, 2018. Mr. Adams explained that the Subject Property is located on Chant Plein Lake, a lake which straddles both the Townships of Mattawan and Papineau-Cameron. The properties on the Mattawan side are given a reduction of minus 13 per cent for the reason that fewer municipal services are available there.

11The Subject Property sits on 3.9 acres of land with western exposure. The home itself has been given a construction quality rating by MPAC of 7 out of 10. It measures 2,587 square feet (“sq. ft.”) and has a completely finished basement of 1,597 sq. ft. with a basement walkout. The property is served by a private well and septic system, and it has private road access. Hydro is available. The effective water frontage is 541.51 feet. The topography is described as having a slight slope. Outbuildings include an attached garage of 756 sq. ft., a carport of 266 sq. ft. attached to a second garage of 343 sq. ft., and a pole barn of 588 sq. ft. The home itself was built in 1983 and renovated in 2015.

12Mr. Adams inspected the property on August 15, 2016. He made a few minor adjustments to the property profile, related to the predominantly weedy water quality at the shore and the lack of amenities such as streetlights and sidewalks. He then reduced his recommended current value from $511,000 to $510,000.

13MPAC uses the generally accepted method of comparing direct sales of similar properties located in the vicinity in order to derive values for residential properties. Mr. Adams reviewed the concept of adjusting sales prices to make them current to the valuation day which is January 1, 2016 for the present assessment cycle. He used 596 sales of residential or vacant residential property in the vicinity to analyze the trends in sales prices. His Sales Ratio Trend Analysis covers sales occurring from January, 2012 through December, 2016. Mr. Adams recorded an overall change in the markets through this period of 0.6 per cent, and was able to calculate Time Adjustment Factors (“TAF”) month-by-month for the period of his study. In this way, MPAC can make an estimate of the change in the value of the comparable residential sales based on the month of each sale.

14Using this evidence, Mr. Adams proposed five residential property sales that he deemed similar enough to the Subject Property to provide a good means of establishing the value of the Subject Property. Usually MPAC would accomplish this by comparing the Subject Property to inferior, superior and relatively similar homes. In this case, however, the Subject Property is superior to any of the other homes that sold on the Lake during the last assessment cycle. If possible, MPAC prefers to use sales close to the valuation day, or in the 11 months before and after it. In this case, that did not produce enough sales to make a fair comparison.

15The basic descriptions of MPAC’s five comparable homes are set out in the following paragraphs.

Sale 1 – 177 Chant Plein Lake Road

16This property is 2.93 acres larger than the Subject Property but it has a much smaller frontage on the lake of 151.58 feet. The residence is newer than the Subject Property’s home by 16 years, but smaller. MPAC has given it a 7.5 construction quality rating. Like the Subject Property, it is one storey in height but with a basement walkout, although the basement is not finished. It has one more bedroom and a half-bath more than the Subject Property. The road is accessible all year. It has two outbuildings consisting of a shed built in 1964 (quality 1, so not very good) and a detached garage of 1,926 sq. ft. built in 2014. The property sold for $425,000 in September, 2016, which is $424,621 once the TAF has been applied. Mr. Adams submits that the value of the Subject Property would be higher than this proposed comparable sale because of its finished basement, and number of useful outbuildings.

Sale 2 – 492A Moosehead Road

17This property is much smaller than the Subject Property, situated on 1.31 acres with a single family detached home of 890 sq. ft. and no basement. The frontage is significantly less at 165 feet. The improvements include a cabin of 127 sq. ft. and a carport of 411 sq. ft. The property sold in October of 2012 for $175,000, time adjusted to $175,710. MPAC determined this property to be worth less than the Subject Property because of the differences in size and the poorer quality of the improvements.

Sale 3 – 371 Neault Road

18This single family home on the lake has an effective year built of 1980, with average construction (ranked as a “5”), with a building size of 1,056 sq. ft. and no basement. This property has year-round road access and a private well. It was modified in 1993. The heating is electric baseboard and a wall insert, also electric. It has 103 feet of shoreline and a total area of 1.1 acres. It sold in October of 2015, the price paid was $225,000, an amount which changed but minimally with the time adjustment. This home has no listed outbuildings, MPAC notes that the property is bisected by a road behind the structure. The Subject Property would be more valuable due to the much larger frontage, the fact that the construction of the Subject Property is superior, and the fact that this proposed comparable property has no outbuildings.

Sale 4 – 329 Neault Road

19This home is described as a seasonal/recreational dwelling as opposed to a single family detached home on water. It has 105 feet or water frontage and a total lot size of 1.98 acres. It is on a year-round road, and like 371 Neault Road, the road bisects the lot behind the structure. Water comes from the lake. The shoreline is described as rocky. It is of average construction, with 1 and ¾ storeys, four bedrooms and one bathroom. While this residence was built in 1939, it was upgraded in 1982. There is one outbuilding noted: a cabin built in 1950 of 121 sq. ft. This property sold in June, 2013, for $200,000, time-adjusted to $200,642. It is inferior to the Subject Property with respect to waterfront, lot size, building quality, and with regard to outbuildings.

Sale 5 – 655 Moosehead Road

20The property code for this property denotes it as a Bed and Breakfast establishment. It was built in 1933 but upgraded so that the effective year built is 1977. MPAC gives it a quality 6 construction. It is a two and a half storey building with eight bedrooms and three baths and a building size of 5,929 sq. ft. and a finished basement of 1,945 sq. ft. Heating is done by means of a hot water boiler. The property has 270 feet of frontage on the lake, and a site area of 2.14 acres. It is accessed by private road. It has its own well plus septic bed. The exposure is west, like the Subject Property, and like the Subject Property the shoreline is noted as “weedy/algae.” It has two additional structures, including a detached garage of 852 sq. ft. and a carport of 588 sq. ft. This property sold in June, 2014, for $385,300, which is time-adjusted to $386,049. The residence is quite large, but has a smaller unfinished basement, unlike the Subject Property which has a basement the same area as the main floor. The Subject Property would sell for more because of its newer age, larger waterfront, larger lot size, and better quality building.

21Mr. Adams testified that there were no other properties in the area or on this lake as valuable as the Subject Property. He would therefore use them to support his decision that the Subject Property would be more valuable than any other property, and he is recommending a current value of $510,000. In support of this, he submitted that another comparison chart entitled “Appraisal Report for 644 Moosehead Road.” Using this document, Mr. Adams set out the adjustments he applied in order to value a property worth more than any of the proposed comparable sales. By adding and subtracting the values of various favourable and unfavourable attributes from three of the most comparable sales, Mr. Adams was able to estimate the value of the Subject Property. For example, in looking at 177 Chant Pleine Lake Road, where this property has a smaller area, MPAC added $65,000 to the value to adjust it to be more like the Subject Property. This same technique was applied to a variety of features including the higher quality of construction (a reduction of $24,000), one extra half-bath (an increase of $3,000), a much larger detached garage than the Subject Property, leading to a decrease of $37,000; the fact that this property abuts an Industrial area led to an increase of $24,000. At the end of the exercise, adjusting for the differences between 177 Chant Plein Lake Road and the Subject Property led Mr. Adams to conclude that adjusting the comparable sale to be more like the Subject Property gave it an increased value of $507,621. This is how MPAC valued the Subject Property when no superior or very similar properties had been sold in the vicinity.

MPAC’s Submissions

22Relying on its evidence, MPAC submits that the correct current value for the taxation years 2017 to 2018 is $510,000.

Appellants’ Evidence

23Barry McConomy represented the Appellants, and gave evidence on behalf of the Appellants.

24Mr. McConomy began by pointing out the significant difference in the cost of living in Mattawan Township versus Papineau-Cameron. The fact that there is no fire service available in Mattawan Township drives up the cost of house insurance. The fact that residents of Mattawan have a longer commute from their homes to Highway 17, the highway connecting this area to North Bay or Ottawa, means that Mattawan residents pay a higher price for fuel on a regular basis. They are 13 kilometers farther away from the highway which is the main transportation artery for the entire region.

25Mr. McConomy noted that the lack of services is not reflected in tax savings. His property taxes are $7,000 annually and the cost of house insurance is $3,000. He pointed out that these are things a potential purchaser would need to know, and they would affect the amount a willing buyer would pay for the home.

26In support of their position, the Appellants filed a comprehensive Opinion of Value for 654 Moosehead Road prepared by Carole Corriveau, a sales representative with Century 21 in Mattawa. While Ms. Corriveau was not present to testify, her report is admissible. This report focuses on three comparable sales in the neighbourhood, one of which is 177 Chant Plein Lake Road (MPAC’s Property 1); the second is 655 Moosehead Road (MPAC’s Property 5). Her third choice is 99 Laurentian Road, a property not on waterfront located at the base of the Mount Antoine ski hill.

27Ms. Corriveau’s opinion is that the 177 Chant Plein Lake Road property would have a higher current value than the Subject Property because of the fact that it is situated in Papineau-Cameron Township with additional services. Despite its being similar to the Subject Property in size, the different township location would make a significant difference in the price this property sold for ($425,000) and what 654 Moosehead would sell for on the open market. Ms. Corriveau’s letter also points out that 177 Chant Plein Lake Road has a “roughed-in indoor in-ground pool” which was not noted in MPAC’s materials.

2899 Laurentian Crescent sold for $390,000 in June, 2014. Despite not being located next to a body of water, this property is described as being a two storey single family detached home with two full baths, one half bath, three bedrooms, on 1.14 acres. The property has a private well and a septic system, and a detached double garage.

29Ms. Corriveau’s third comparable home sale was 655 Moosehead Road, which sold for $385,300. Ms. Corriveau averaged the listing prices for these three sales which came to $457,966, and then averaged the selling prices, which came to $400,100. Ms. Corriveau concluded that the Subject Property would list for $399,900 to $419,900 and sell for $390,000 to $405,000 on January 1, 2016.

Appellants’ Submissions

30Relying on his evidence, the Appellant submits that the correct current value for taxation years 2017 to 2018 is $424,780. He submits that the location in Mattawan Township is an important feature in assessing value as pointed out by Ms. Corriveau in her opinion of value for his home.

Findings on Current Value

31The very best gauge of current value would be the sale of a Subject Property at or near the valuation day, January 1, 2016. However, where there has been no sale, as in the present case, the accepted best means of deriving value is to compare the Subject Property with similar properties in the same area which have sold close to the valuation day. In an area like the Mattawan and Papineau-Cameron Townships, there were few sales in approximately four years prior to the valuation day, and very few sales of similar homes. In the opinion of MPAC, the most valuable single family detached home located on Lake Chant Plein is the Subject Property. This makes it difficult to compare with other home sales because of the absence of data from more expensive homes.

32Evidence for MPAC was based on the comparison of the Subject Property with five other homes sold in the area between 2012 and 2016. Because MPAC determined that there were no homes as valuable as the Subject Property, the evidence presented included a feature-by-feature valuation including adjustments for various features. While the exercise was useful and instructive, it omitted one variable which, in the Appellants’ submission is a very important detail and a major consideration for a home buyer, and that is the location of the Subject Property in a Municipality that did not provide fire services. A second consideration brought forward by the Appellants, and not taken into consideration in the market analysis exercise, was the distance of Mattawan Township from Highway 17, which is the major artery connecting homes in this area to the closest city, North Bay.

33The Opinion of Value produced by the Appellants is much less detailed, and is based upon only three comparable property sales. In Ms. Corriveau’s opinion, the Subject Property would not be as valuable as the 177 Chant Plein Lake Road property for the reason of the location of this comparable in a different township than Mattawan, and the presence of the roughed-in indoor pool. Ms. Corriveau thought that 99 Laurentian Crescent was a better comparable sale because of its location in the Township of Mattawan with the same proximity to town and with similar services to the Subject Property.

34The Board finds that the Subject Property would likely be more valuable than the smaller homes presented by MPAC as properties 2, 3 and 4. Property 5 is a difficult comparable sale because of its large size – eight bedrooms, 5,929 sq. ft. in area, with two and one-half storeys, and its age. This comparable property, operated recently as a bed and breakfast establishment, would not appeal to the same market as the other homes described by both MPAC and the Appellants.

35The Laurentian Crescent property is a useful comparison because, while being a smaller building than the Subject Property, it is a newer build, and located in the same Township as the Subject Property. Sold at $390,000, this comparable home is of less value than the Subject Property.

36The Board agrees that the best comparable sales are 177 Chant Plein Lake Road, and 99 Laurentian Crescent. However, unlike Ms. Corriveau, the Board finds that there are more similarities between 177 Chant Plein Lake Road and the Subject Property arising from the location of both on waterfront. Both properties have some superior features that the other lacks. 177 Chant Plein is on a year-round road, for instance, while the Subject Property is not, but the Subject Property has a much larger waterfront, larger building, and finished basement. The Subject Property has several outbuildings, including a newer two-bay detached garage plus another garage. No evidence was provided about the effect of the roughed-in in-ground pool on the value of 99 Laurentian Crescent. It is difficult to include this item in any consideration of value without knowing the comparable cost of this amenity and whether it is an asset or a liability to a potential homebuyer.

37Given the locational issues described by both the Appellants and by the realtor who provided an Opinion of Value, the Board finds that the Subject Property would not have features to bring its value to over $85,000 more than 177 Chant Plein Lake Road. Rather, while the properties are different, many of the differences can be set off against each other, such as water frontage (Subject Property) and overall site area (177 Chant Plein Lake Road), or a variety of outbuildings (Subject Property) against year-round road access (177 Chant Plein); or the finished basement of the Subject Property against the location of 177 Chant Plein Lake Road in the Township of Papineau-Cameron.

38Therefore, the Board agrees with the Appellants that their property has the same value as 177 Chant Plein Lake Road, and finds that the current value is $424,621, rounded to $425,000.

DECISION

39The correct current value of the Subject Property is $425,000 for the 2017 and 2018 taxation years.

40The Board reduces the assessment from $511,000 to $425,000 for the 2017 and 2018 taxation years.