Edward Jacob Keck v. Municipal Property Assessment Corporation, 2019 CanLII 91530

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: September 23, 2019

FILE NO.: WR 161442

Assessed Person(s): Edward Jacob Keck

Appellant(s): Edward Jacob Keck

Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 27

Respondent(s): City of Windsor

Property Location(s): 1868 George Avenue

Municipality(ies): City of Windsor

Roll Number(s): 3739-010-390-07400-0000

Appeal Number(s): 3228602, 3313799 and 3367360 (deemed 2019 appeal)

Taxation Year(s): 2017, 2018 and 2019 (deemed appeal)

Hearing Event No.: 701965

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

Heard: July 3, 2018 by telephone conference call

APPEARANCES:

Parties	Representative
Edward Jacob Keck	Self-represented
MPAC	Simon Wicks
City of Winsor	No one appeared

DECISION OF THE BOARD DELIVERED BY MARK SPRAGGETT

REASONS

Background

1Edward Jacob Keck (the “Appellant”) is the owner of 1868 George Avenue (the “Subject Property”), in the City of Windsor municipality and the County of Essex.

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 (“current value”).

3MPAC initially assessed the value of the Subject Property, as of January 1, 2016 at $107,000 for the 2017 taxation year and then at $92,000 for the 2018 taxation year. MPAC was willing to reduce the 2017 assessed value to $92,000 similar to 2018, however the Appellant did not accept.

4The Appellant, the owner, has filed an appeal for the taxation year 2017 with the Assessment Review Board (the “Board”) pursuant to section 40(26) of the Act, and he has been deemed to have brought the same appeal with respect to the Subject Property for the 2018 taxation year. It is his position that MPAC’s assessment of current value is too high and that the correct current value is closer to $60,000. At this hearing, MPAC takes the position that the correct current value is $92,000.

5Pursuant to section 40(11) of the Act, the municipality, the City of Windsor, is a party to this proceeding. However, the municipality did not advise the Board of its position on the issues raised in these appeals, and no one appeared at the hearing on the municipality’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 the municipal tax burden according to the value of the property possessed by each ratepayer.

7In this appeal the Appellant did not assert that an equitable reduction of current value is required. Therefore, in this proceeding, this ground for appeal is not in issue.

8At the completion of the hearing, the Board reserved its decision. For the reasons that follow, the Board finds that the current value of the Subject Property for the 2017 and 2018 tax years is $92,000.

Relevant Legislation

9The 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.

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:

3. For each subsequent period consisting of four consecutive taxation years, land is valued as of January 1 of the year preceding the first of those four taxation years.

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

10The issue to be determined on this appeal is: What is the correct current value of the Subject Property for the taxation years 2017 and 2018.

Description of the Subject Property

11The Subject Property is a 1.5 storey detached single family residential dwelling. The dwelling structure has an effective year built of 1944 with a total building area of 1,262 square feet (“sq. ft.”), and a construction quality rating of 6.0. The property is located in the City of Windsor of Essex County.

Discussion, Analysis and Findings

MPAC’s Evidence

12Simon Wicks, a Property Valuation Analyst, represented and testified on behalf of MPAC.

13Mr. Wicks prepared and submitted a Valuation Report respecting the Subject Property, dated January 16, 2018 (“Valuation Report”).

14Relying on his evidence and analysis, Mr. Wicks’s opinion of the correct current value for the Subject Property as of January 1, 2016 is $92,000. Mr. Wicks states in his Report that the data, analysis and conclusions supporting his opinion are contained in the body of the Valuation Report.

15Mr. Wicks conducted an inspection of the Subject Property on November 28, 2016, reviewing and confirming the building measurements. He testified that in March of 2015 the Subject Property had a sale amount of one dollar, followed by a sale later in June of 2015 for $60,000. In both cases Mr. Wicks testified the transactions were not open market sales but related to an estate sale. Because the Subject Property was an estate sale without being exposed to the open market, he considers that this sale price does not represent a market determined outcome. For this reason the sale is not considered an arm’s length open market transaction and therefore invalid for the purpose of analysis.

16Mr. Wicks testified that he searched MPAC’s corporate database for sales information and identified six suggested comparable properties for his analysis. All the properties sold between April 2015 and September 2017, with three selling in 2015, two in 2016 and one in 2017.

17Mr. Wicks applied the Direct Comparison Approach to arrive at his opinion of the correct current value for the Subject Property. In lieu of a quantitative approach, Mr. Wicks adopted a bracketing approach, where he qualitatively classified suggested comparable properties as being either inferior, superior or closely comparable to the Subject Property. In so doing, he is able to establish a probable range of current value for the Subject Property.

18Mr. Wicks presented a time adjusted sale price range for the six suggested comparable properties between $103,176 (1948 George Avenue) to $133,335 (2033 Pillette Road).

19Mr. Wicks estimates the current value of the Subject Property to be $92,000. He testified that this was the request for reconsideration value that was not accepted by the Appellant.

MPAC’s Submissions

20Relying on its evidence, MPAC submits that the correct current value for the taxation years 2017 and 2018 is $92,000.

21MPAC disagreed with the Appellant’s argument that the 2015 sale of the Subject Property supports his view that the current value is much lower than $92,000. MPAC maintains that the 2015 sale was not an open market arm’s length sale and therefore of no use in determining current value, as stated in paragraph 15 above.

Appellant’s Evidence

22Jacob Keck, the Appellant testified at the hearing.

23Mr. Keck provided no written evidence for the Board’s consideration.

24Mr. Keck testified that although the sale of the Subject Property in 2015 was not an open market transaction, he believes the sale of the estate for the amount of $60,000 is a valid measure of where the current value should be.

Appellant’s Submissions

25The Appellant disputes MPAC’s characterization of the 2015 sale of the Subject Property as invalid because it was not an open market arm’s length sale.

26The Appellant disagrees with MPAC’s value of $92,000 maintaining that it is much lower given that in 2015 it sold for $60,000.

Findings

27Under section 44.(3)(a) of the Act, the Board must first determine “the current value of the land.” The best evidence the Board can receive of current value is an arm’s length and market-tested sale of the property on the valuation date or close to it. If, as in this case, no such transaction took place, the next best measure of current value is an arm’s length and market-tested sale of comparable properties located nearby, as close as possible to the legislated valuation date of January 1, 2016.

28To estimate a value for the Subject Property from the suggested comparable properties, there must be sufficient elements that are comparable, in terms of physical factors such as building area, land area, land frontage, age of construction and physical condition, etc. so that a direct comparison can be made.

29The Board finds that MPAC’s six suggested comparable properties provide sufficient information to determine the current value for the Subject Property. The Board finds that the six properties are comparable to the Subject Property, exhibiting characteristics that are comparable in terms of lot size, being in the same neighbourhood, having relatively similar periods of construction, of similar property types and quality classification. The Board finds the time adjusted sales range is indicative that the value of the Subject Property is much higher than $92,000.

30The Board notes that one of MPAC's comparable properties is located on the same street as the Subject Property, has a time adjusted sale of $103,176. This property is similar in many respects to the Subject Property, with a notable exception of being only a 1.25 storey dwelling versus a 1.5 storey dwelling for the Subject Property. The Board is persuaded by the range in sale prices, supporting the argument that the current value of the Subject Property is at least $103,176.

31The Appellant takes an opposing view, arguing that the Subject Property should be valued much less than MPAC’s proposed value of $92,000. The Board finds no evidence to support the Appellant’s position. The Appellant provided no written evidence of any kind to assist the Board in making a determination of current value. The fact is that the Subject Property is an estate sale that was not offered for sale on the open market. The Board has no other evidence to support this the lower value as reflecting an open market sale and, therefore, the Board is not persuaded to accept the 2015 sale value.

32Therefore, the Board finds that the best evidence to determine current value is the six comparable properties provided by MPAC. Based on the Board’s analysis of the evidence, the Board concludes that a current value could be as high as $103,000 rounded. However, as MPAC has proposed $92,000 and there is no party seeking a higher value, the Board is satisfied that the correct current value is $92,000.

DECISION

33The Board finds the correct current value as of January 1, 2016 for the 2017, 2018 and 2019 taxation years is $92,000.

34In addition to the 2017 and 2018 taxation year appeals before the Board, there is also an appeal of the 2019 taxation year assessment of property. This is because subsection 40(26) of the Act deems that an appellant has brought the same appeal for the 2019 taxation year if the 2018 taxation year appeal has not been finally disposed of by March 31, 2019.