Maffei v. Municipal Property Assessment Corporation, 2019 CanLII 81689

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: August 28, 2019

FILE NO.: WR 161696

Assessed Person(s): Joseph Francis Maffei

Appellant(s): Joseph Francis Maffei and Vincent Maffei

Respondent(s): Municipal Property Assessment Corporation (“MPAC”), Region 09

Respondent(s): City of Toronto

Property Location(s): 1 Geranium Court

Municipality(ies): City of Toronto

Roll Number(s): 1908-094-290-05612-0000

Appeal Number(s): 3338356 and 3350109

Taxation Year(s): 2018 and 2019

Hearing Event No.: 718969 and 722696

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

Heard: July 23, 2019 in Toronto, Ontario and August 1, 2019 by telephone conference call

APPEARANCES:

Parties	Counsel⁺/Representative
Joseph Maffei	Self-represented
MPAC	Cherie Matthew
City of Toronto	No one appeared

DECISION OF THE BOARD DELIVERED BY JEAN-PAUL PILON

BACKGROUND

1Joseph Maffei and Vincent Maffei are the owners of 1 Geranium Court (the “Subject Property”) in the City of Toronto. Only Joseph Maffei (the “Appellant” singular) attended the hearing.

2Pursuant to the Assessment Act, R.S.O. 1990, c. A. 31 (the “Act”), the assessment of land shall be based on its current value. For the 2017 to 2020 taxation years, MPAC is required to assess this value as of the valuation date, January 1, 2016 (“current value”).

3MPAC returned a current value of the Subject Property of $2,065,000 in 2018 and $1,868,000 for 2019. MPAC took the position at the hearing that the correct current value of the Subject Property was $1,836,000.

4The Appellant filed an appeal for the 2018 taxation year with the Assessment Review Board (the “Board”) and was deemed to have brought the same appeal with respect to the Subject Property for the 2019 taxation year pursuant to subsection 40(26) of the Act. The Appellant’s position was that MPAC’s assessment of current value was too high and that the correct current value was $1,300,000.

5Pursuant to subsection 40(11) of the Act, the City of Toronto was a party to the proceeding. However, it 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.

6Subsection 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 possessed by each ratepayer.

7Both parties took the position that an equitable reduction was required and the Appellant did not contest MPAC’s evidence of what that equitable reduction should be.

8At the completion of the in-person hearing, the Board provided its decision orally. The hearing was reconvened by telephone conference call to correct a clerical calculation error in that oral decision.

9For the corrected reasons given at the hearings and which follow in writing below at the request of both parties, the Board finds that current value of the Subject Property for the 2018 and 2019 taxation years is $1,765,404. This value is reduced to $1,636,500 after the equitable reduction referred to above made pursuant to 44(3)(b) of the Act.

Relevant Legislation and Rules

10Section 1 of the Act states:

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.

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.(17) of the Act states:

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.

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.

Issue

14The issue to be determined is the correct current value of the Subject Property for the 2018 and 2019 taxation years.

Discussion, Analysis and Findings

MPAC’s Evidence

15MPAC’s representative Cherie Matthew testified that the house on the Subject Property is detached, on a corner lot with light traffic. The Subject Property has an effective site area of 4,409 square feet (“sq. ft.”) with frontage of 40.39 feet (“ft.”) and depth of 105.25 ft. Ms. Matthew testified that MPAC rated the Subject Property’s quality of construction at 8.5.

16MPAC produced a list of proposed comparable properties, the farthest being just over one-half a kilometer away from the Subject Property. All of MPAC’s proposed comparable properties had been the subject of arm’s length sales within the one-year period prior to or following the January 1, 2016 valuation date.

17MPAC applied uncontested time adjustments to the sale prices of each of its proposed comparable properties to simulate what the sale prices would have been on the valuation date. MPAC arrived at a median time adjusted sale price of $2,298,000 for the six proposed comparable properties. From that number, MPAC deducted two amounts: $276,000 as an “unfinished allowance” and $41,000 for “data changes” that were not explained at the hearing. This resulted in a revised value of $1,981,000. Finally, MPAC multiplied that amount by 0.927, the level of assessment/assessment to sales ratio in its equity study, also uncontested at the hearing, to arrive at a final opinion of value of $1,836,000.

18Additional facts emerged on the Appellant’s cross-examination of MPAC’s representative: that there is a fire hydrant in front of the Subject Property, that the Subject Property has a driveway that is awkward to navigate, that Ms. Matthew had not seen the interior of the Subject Property, that MPAC did not take into account finishes at the Subject Property, and that such finishes did not and would not have had any bearing on its assessment in any event.

Appellant’s Evidence

19The Appellant had three proposed comparable properties of his own, the first of which he also owns 2 Geranium Court, which has a lower assessed value despite being a bigger property. The Appellant referred to the other two of his proposed comparable properties for the purpose of determining land value only. This is because they have or had houses on them that were, in his testimony, substantially older than the one at the Subject Property that were only fit to be demolished. He testified that he is a builder and that he built the Subject Property and 2 Geranium Court, and that the value of the house on the Subject Property is $340,000. Significantly, he was not cross-examined on that testimony.

Analysis

20The salient details of MPAC’s proposed comparable properties are summarized below:

	Subject Property	#1	#2	#3	#4	#5	#6
Address	1 Geranium Court	588 Conacher Drive	34 Riseborough Avenue	28 Gustav Crescent	151 Maxome Avenue	172 Newton Drive	52 Riseborough Avenue
Site Area (square feet)	4,409	7,585	6,623	6,516	7,525	5,480	6,629
Building Area (square feet)	3,588	4,028	4,059	3,754	4,029	3,956	4,015
Variables	Traffic and corner lot	Traffic and corner lot	Traffic
Time Adj. Sale Price	N/A	$2,213,274	$2,479,844	$2,448,187	$2,201,941	$2,300,451	$2,295,792

21The houses on each of these properties are of similar size and quality. However, the Subject Property has a site area of 4,409 sq. ft. and, except for the fifth proposed comparable property at 172 Newton Drive, all of the other proposed comparable properties include significantly more land. The differences in land size are large, ranging from 47% more land in the case of the second, to 72% more land in the case of the first. In addition, only the third and fourth properties have variables similar to the Subject Property.

22MPAC’s method for arriving at its assessed value took the median time adjusted sale price of all of these proposed comparable properties without considering the significant difference in the quantity of land attached to each. In addition and more significantly, the only imprecise conclusion that could be drawn from MPAC’s evidence was that the Subject Property was worth less than all of the others, as all of them were superior to the Subject Property.

23The Appellant produced evidence on three proposed comparable properties, including his own at 2 Geranium Court. That property was not considered in the analysis, however, because it had not been the subject of an arm’s length sale, and the direct comparison method considers sale prices for comparison.

24The Appellant also testified at length about the lower assessment 2 Geranium Court. It was pointed out to him that that property was the subject of its own, separate litigation and settlement that was not relevant to the determination of value for the Subject Property.

25The other two proposed comparable properties in the Appellant’s evidence were relied upon for the purpose of determining land value only, where he testified the houses were old, effectively built in 1979 but originally built in 1959 and 1960 and were only fit to be demolished. These are summarized below:

	Subject Property	#2	#3
Address	1 Geranium Court	107 Cummer Avenue (Sale January 8, 2016)	98 Cummer Avenue
Site Area (square feet)	4,409	6,336	9,702
Sale Price (Time Adjusted)	N/A	$960,000*	$1,355,763

*The Appellant did not apply any time adjustment for this proposed comparable property.

26Both of the Appellant’s proposed comparable properties are larger than the Subject Property, the second significantly larger, which the Appellant relied on to his detriment. However, the Appellant testified they are both in very close proximity to the Subject Property and, considered together, they are the best and only evidence of the value of land alone.

27The Appellant testified he built both of the houses on Geranium Court mentioned above and said that the value of his house was $340,000 without providing any documentation or evidence to substantiate it. That testimony may well have been self-serving, but it was entirely unchallenged in cross-examination. It was also not argued that either of the Appellant’s proposed comparable properties required any of the mostly inexact and partially unexplained adjustments that were the focus of the Appellant’s cross-examination.

28That essentially left the Board with two choices in its determination of correct current value. It could accept MPAC’s evidence of proposed comparable properties that, with the exception of a single property at 172 Newton Avenue, included similar houses but substantially more land than at the Subject Property, the value of which could not be extracted from sale prices and artificial adjustments. Alternatively, the Board could consider the Appellant’s evidence of the value of land in the immediate vicinity, adding his uncontested evidence of the value of the house.

29The Board determined that the most reliable way to reconcile the evidence before it would be to accept only the fifth proposed comparable property from MPAC as most similar to the Subject Property, along with the Appellant’s two proposed comparable properties for land value, adding the Appellant’s evidence of the value of the house. Summarized, that evidence was as follows:

Address	172 Newton Drive	107 Cummer Avenue	98 Cummer Avenue
Land	Included	$960,000	$1,355,763
House	Included	$340,000	$340,000
Land and House	$2,300,451	$1,300,000	$1,695,763
Average of all three	$1,765,404

30The average of the land and house amounts above is $1,765,404 which was the best evidence of the value of the Subject Property. As a result, it is determined that the correct current value of the Subject Property is $1,765,404.

31The parties did not contest MPAC’s equity adjustment of 0.927. Applied to the correct current value of $1,765,404 above, the assessment is reduced to $1,636,530, rounded to $1,636,500.

DECISION

32The Board finds the current value of the Subject Property is $1,765,404 for the 2018 and 2019 taxation years. The Board also finds that there is evidence to support a reduction in this amount for the purposes of equitable assessment.

33Accordingly, the assessment of 1 Geranium Court for the 2018 and 2019 taxation years is reduced from $1,765,404 to $1,636,500.