Cassan v. Municipal Property Assessment Corporation, 2019 CanLII 7198

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE:

January 28, 2019

FILE NO.:

WR 156343

Assessed Person(s):

John Paul Robert Cassan and Theresa Ann Cassan

Appellant(s):

John Cassan and Theresa Cassan

Respondent(s):

Municipal Property Assessment Corporation (“MPAC”)

Region 31

Respondent(s):

City of Sault Ste. Marie

Property Location(s):

141 Princeton Drive

Municipality(ies):

City of Sault Ste. Marie

Roll Number(s):

5761-030-026-12100-0000

Appeal Number(s):

3265166 and 3314895

Taxation Year(s):

2017 and 2018

Hearing Event No.

702878

Legislative Authority:

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

Heard:

October 11, 2018 by telephone conference call

APPEARANCES:

Parties

Representative

John Cassan

Self-represented

MPAC

Brett McGuire

The City of Sault Ste. Marie

No one appeared

DECISION OF THE BOARD DELIVERED BY JOANNE LAWS

INTRODUCTION

1John and Theresa Cassan (the “Appellants”) are the owners of 141 Princeton Drive, Sault Ste. Marie (the “Subject Property”). MPAC assessed the Subject Property at $366,000 for the 2017 taxation year and at $354,000 for the 2018 taxation year. However, MPAC takes the position that the correct current value is $354,000 for both taxation years. The Appellants argue that there are a number of factors which negatively impact the value of their property including flooding in the back yard and a general lack of maintenance. They also argue that their property is assessed higher than the sale values of similar properties in their neighbourhood. They argue that their property should be assessed between $285,000 and $290,000.

2The Subject Property has a lot area of 13,082 square feet (“sq. ft.”) with frontage of 58.4 ft. and an effective depth of 224 ft. It is improved with a single family detached side-split house built in 1990. The total building area is 2,340 sq. ft. and there is an attached garage measuring 528 sq. ft.

3Pursuant to the provisions of the Assessment Act (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 (“current value”).

4The parties agree that equity is not an issue.

5Pursuant to s. 40(11) of the Act, the City of Sault Ste. Marie is a party to this proceeding. However, it did not advise the Assessment Review Board (“Board”) of its position on the issues raised in these appeals and no one appeared at the hearing on its behalf.

6At the completion of the hearing, I reserved my decision. For the reasons that follow, I find that the Subject Property likely would have sold for $318,000. I find that the maintenance issues and flooding are reflected in this value. I therefore reduce the 2017 assessment of the property from $366,000 to $318,000 and the 2018 assessment of the property from $354,000 to $318,000 for the 2017 and 2018 taxation years.

Relevant Legislation

7The Act states that:

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.

19.2(1) Valuation days – 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

The issue to be determined on this appeal is the correct current value of the Subject Property for the taxation years 2017 and 2018.

Discussion, Analysis and Findings

MPAC’S Evidence

8Brett McGuire represented MPAC and relied on his Valuation Report for the Subject Property dated April 26, 2018.

9Mr. McGuire stated he inspected the Subject Property on May 25, 2018. As a result of that inspection and discussions with the Appellant, Paul Cassan, MPAC removed the value for a deck, a fireplace, and an air conditioning unit. These adjustments reduced the assessed value from $366,000 to $354,000.

10Mr. McGuire chose six properties, which he said were comparable to the Subject Property. The time adjusted sale prices for these six sales range from $284,225 to $399,825. Mr. McGuire takes the position that this adjusted assessment of $354,000 is supported by this range of values.

MPAC’s Submissions

11Relying on its evidence, MPAC’s submits that the correct current value for the Subject Property is $354,000 for taxation years 2017 and 2018.

12In response to the Appellants’ arguments, MPAC agrees that the flooding and deteriorating garage floor may affect the Subject Property’s value. However, no adjustment could be made without some evidence, such as estimates for the cost-to-cure, which MPAC did not receive from the Appellants. With regard to the chimney brick deterioration, MPAC’s position is that because it has removed the fireplace from the assessed value, a further adjustment for the chimney brick deterioration is not be warranted. In any event, MPAC could not consider a further adjustment without some evidence of the cost-to-cure.

Appellants’ Evidence

13Paul Cassan is the Appellant and represented himself and Theresa Cassan.

14He presented a letter of opinion dated May 1, 2018 written by Bill Montague, a real estate sales representative. In this letter Mr. Montague indicated that the market value of the Subject Property was between $285,000 and $290,000 as of May 1, 2018. Mr. Cassan submitted two spreadsheets prepared by Mr. Montague; one of 19 Multiple Listing Service sales and another of 13 GeoWarehouse sales. In his letter, Mr. Montague indicated that 154 Princeton, which sold for $275,000 in March 2016 and 181 Princeton which sold for $260,000 in August 2017 were comparable to the Subject Property. Mr. Montague was not called as a witness.

15During the hearing Mr. Cassan said that Mr. Montague also felt 113 Princeton, which sold in June 2015 for $310,000, was comparable to the Subject Property. He added that Mr. Montague may not have considered the exterior repairs needed and, therefore, may have over-estimated the value of the Subject Property.

16Mr. Cassan also submitted photographs of the Subject Property’s driveway, back yard, garage floor, exterior chimney brickwork, and a bathroom. He testified that he has not maintained or updated the Subject Property.

Flooding

17Mr. Cassan testified that his back yard is a low spot in the neighbourhood and that the higher elevation properties behind his home drain into his back yard. At least once a year, usually in the fall, the back yard floods and, sometimes, the water level is high enough that it enters the basement through the windows. Mr. Cassan explained that flooding doesn’t occur in the spring or summer; that a combination of saturated ground and heavy rain is needed for the flooding to occur. Mr. Cassan submitted photographs of a flood event which occurred the night before this hearing. He testified that there is a storm drain in the back yard but it is inadequate during the flooding events. He argues that to cure the flooding the land level needs to be raised and the storm drain upgraded but that the cost to do this work would be substantial. In response to cross-examination questions, Mr. Cassan believes the municipality would inspect the drain if asked but, if work was required, he also believes he would be responsible for the costs. He has not pursued this route because he is worried that the municipality might issue a work order. He said he is required to disclose the flooding to prospective purchasers which, he argues, would negatively affect the market value of the property.

Garage Floor

18Mr. Cassan testified that the concrete floor in the garage was poured incorrectly and is crumbling.

Chimney Brickwork

19Mr. Cassan testified that the exterior bricks on his chimney are cracking. He said that he sought to have the bricks repaired but was advised that the chimney must be rebuilt.

Appellants’ Submissions

20Relying on their evidence, the Appellants submit that the correct current value for taxation years 2017 and 2018 is in the range of $285,000 to $290,000. They argue that the lack of maintenance and updates may result in a market value that is less than this range.

21The Appellants argue that both the flooding, and their requirement to disclose the flooding to prospective purchasers, negatively affect the market value of the Subject Property, as does the garage floor and chimney brickwork. However, the Appellants provided no estimates for the costs to cure these issues or any evidence of how they might affect the market value of the Subject Property.

Findings on Current Value

22The best evidence of current value of a residential property is an arm’s length sale of that property on or near the valuation day. Often, the next best evidence is arm’s length sales of similar properties on or near the valuation day.

23MPAC presented six sale properties and the Appellants identified three sales on which they wished to rely.

24The Appellants’ three sales are all on the same street as the Subject Property. The first sale, 113 Princeton Drive, sold in June 2015 for $310,000. The second sale, 154 Princeton Drive, sold in March 2016 for $275,000. The third sale, 181 Princeton Drive sold in August 2017 for $260,000. Each of the residences is significantly smaller than the Subject Property at 1,640 sq. ft., 1,500 sq. ft., and 1,367 sq. ft., respectively. Other than the lot size of 181 Princeton Drive at 6,361 sq. ft., which is less than half the size of the Subject Property, I was provided with no other physical details of these three sales.

25There are some difficulties with the Appellants’ evidence. One difficulty is that it does not contain sufficient details to determine whether his suggested comparable properties are, in fact, directly comparable to the subject property. Another issue is with the Appellant’s account of Mr. Montague’s opinions, which is hearsay. Mr. Montague did not attend the hearing to undergo questions regarding the content of his documents. Section 15 of the Statutory Powers Procedure Act, R.S.O. 1990, c. s.22 sets out the admissibility of evidence before this Board. Hearsay evidence is admissible. However, I find that, without further information, the Appellant’s hearsay evidence has little weight.

26Based on the limited information presented, the only conclusion I can make is that all three properties are inferior to the Subject Property and, therefore, the Subject Property would likely sell for more than their sale values. The limited data on these properties does not assist me in determining the Subject Property’s current value.

27MPAC’s evidence of its suggested comparable sale properties is much more comprehensive than the Appellants’. I have attached a summary of MPAC’s data, the Market Analysis Grid, as Appendix A. They sold in either 2012 or 2014, which I would normally find too far from the valuation day. However, MPAC’s undisputed evidence indicates that the market has changed very little between 2012 and the valuation day of January 1, 2016. As a result, I accept these sales despite their distance from the valuation day.

28I find that MPAC’s Sale 1, 127 Pleasant Drive, is inferior to the Subject Property. It is older, built in 1976, and has a smaller lot at 7,750 sq. ft. and a slightly smaller building of 2,153 sq. ft. It sold in August 2012 for $287,500.

29I find that Sale 3, 36 Partridge Court, is inferior to the subject property. It is a similar age, built in 1988, but it has a smaller lot of 7,860 sq. ft. and a smaller building of 1,858 sq. ft. It sold in November 2014 for $335,000.

30I find that Sale 4, 15 Partridge Court, is inferior to the subject property. It is a similar age, built in 1989, but it has a smaller lot of 6,000 sq. ft. and a smaller building of 1,801 sq. ft. It sold in September 2014 for $300,000.

31I also find that MPAC’s Sale 6, 108 Prince Charles Crescent, is inferior to the Subject Property. It is the same age, built in 1990, but it has a much smaller lot at 4,956 sq. ft. and a much smaller building of 1,669 sq. ft. It sold in October 2012 for $342,500.

32I find that Sale 2, 28 Partridge Court, is relatively similar to the subject property. While it has a smaller lot of 7,020 sq. ft., it is a similar age, built in 1989, and a similar building size of 2,151 sq. ft. It sold in July 2014 for $340,000.

33I find that Sale 5, 92 Prince Charles Crescent, is relatively similar to the subject property. It, too, has a smaller lot of 6,898 sq. ft. However it is a similar age, built in 1990, and it has a similar building size of 2,353 sq. ft. It sold in March 2012 for $405,000.

34MPAC’s inferior properties have sale values ranging from $287,500 to $342,500 with a median value of $317,500. The similar properties sold for $340,000 and $405,000. I received no evidence that any of these properties are lacking maintenance or have a flooding issue similar to the Subject Property. If the Subject Property had no maintenance or flooding issues, the likely current value would be in the range of similar property sale values.

35MPAC has acknowledged the lack of maintenance by making some adjustments to the initial assessment but it declined to make adjustments for all of the issues, including the flooding, because the cost-to-cure was not quantified by the Appellants.

36The Appellants should have provided some evidence to account for the cost-to-cure the remaining issues, even if they could not be precisely quantified.

37However, in this particular case, with these particular circumstances, I find that despite a lack of cost-to-cure evidence, a reduction is warranted. The only evidence before me as to current value is the sales of other properties. In consideration of the flooding and the maintenance issues, I find that it is reasonable to consider the sale values of the inferior properties to determine the Subject Property’s current value. None of the suggested comparable sale properties were identified as lacking in maintenance or having flooding issues. Therefore, I conclude that those properties that are otherwise physically similar to the subject property are, in fact, superior to the Subject Property and that the inferior properties are the best evidence of the likely sale value of the Subject Property. The median sale value of the four inferior properties is $318,000, rounded. This is the current value of the Subject Property.

DECISION

38The correct current value of the Subject Property is $318,000 for the 2017 and 2018 taxation years.

39Accordingly, the assessment is reduced from $366,000 to $318,000 for the 2017 taxation year and from $354,000 to $318,000 for the 2018 taxation year.