Nelson Stewart Taddeo v. Municipal Property Assessment Corporation, 2019 CanLII 94116

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: October 03, 2019

FILE NO.: WR 161792

Assessed Person(s): Nelson Stewart Taddeo

Appellant(s): Nelson Stewart Taddeo

Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region No. 32

Respondent(s): Township of Ignace

Property Location(s): 515 Main Street

Municipality(ies): Township of Ignace

Roll Number(s): 6001-000-001-42100-0000

Appeal Number(s): 3260256, 3315007 and 3368330

Taxation Year(s): 2017, 2018 and 2019

Hearing Event No.: 718671

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

Heard: July 17, 2019 by telephone conference call

APPEARANCES:

Parties

Representative

Nelson Stewart Taddeo

Self-represented

MPAC

Shelby Roper, Carlene Steiner and Justin Johnstone (observing)

Township of Ignace

No one appeared

DECISION OF THE BOARD DELIVERED BY SUBUOLA AWOLERI

INTRODUCTION

1Nelson Taddeo, (the “Appellant”) is the owner of 515 Main Street (the “Subject Property”). The Subject Property is a vacant commercial land with an actual frontage of 114.28 feet and actual depth of 205.83 feet for an actual site area of 0.54 acres. This property is part of five properties owned by the Appellant, in which he has appealed their assessment.

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”).

3The Appellant appeals the 2017, 2018 and 2019 assessment of the Subject Property on the grounds that the assessment is too high. The Appellant submits that the current value of the Subject Property should be $1,000. The Subject Property was assessed by MPAC at $9,900 for the 2017 and 2018 taxation years and $7,000 for the 2019 taxation year. Shelby Roper, MPAC’s advocate, requests that the Board confirms the recommended assessment of $7,000 for the January 1, 2016 valuation date.

4Pursuant to s. 40(11) of the Act, the Municipality, (in this case, the Township of Ignace) is a party to this proceeding. However, the Township did not advise the Board of its position in this appeal and no one appeared at the hearing on the Township’s behalf.

5At the completion of the hearing, the Board reserved its decision.

PRELIMINARY ISSUE

6The MPAC valuation report entered into evidence by Carlene Steiner was authored by another MPAC employee, Monte Ross, who was not available to provide evidence at the hearing. Ms. Steiner submitted that she is familiar with the valuation report and that she carried out the inspection of the Subject Property. She further testified that due to the constraint of time, she did not update the valuation report.

7The Appellant initially indicated that he did not have a copy of this valuation report, but Justine Johnstone stated that the valuation report was served on the Appellant in February 2019 prior to the settlement conference. The Appellant submitted that no one advised him to review the documents disclosed prior to the settlement conference.

8At the hearing, Mr. Johnstone emailed the valuation report to the Appellant.

9The Board took a recess and during which time the Applicant reviewed the valuation report before the hearing reconvened at the original scheduled time of 1:30 p.m.

10The Appellant did not object to Ms. Steiner presenting the valuation report into evidence.

11The Board accepted MPAC’s valuation report into evidence as Ms. Steiner testified that she inspected the Subject Property and has knowledge of the content of the valuation report.

ISSUES

12The issues to be determined are:

i) What is the correct current value of the Subject Property for the 2017, 2018 and 2019 taxation years?

ii) Is the current value as determined by the Board equitable in reference to the assessments of similar lands in the vicinity?

DECISION

13The Board determines the correct current value of the Subject Property for the 2017, 2018 and 2019 taxation years to be $6,776.

14The Board finds that this assessment at current value is equitable with the assessments of similar lands in the vicinity, and therefore no further reduction is required to achieve equity.

15The Board reduces the assessment of the Subject Property from $9,900 to $6,776 for the 2017, 2018 taxation years and from $7,000 to $6,776 for the 2019 taxation year.

REASONS FOR DECISION

Legislation

16In accordance with s. 44.(3)(a) of the Act, the first mandate of the Board is to determine “the current value of the land.” Section 1 of the Act defines current value as “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.” That is, for the 2017, 2018 and 2019 taxation years, the Board must determine what the Subject Property would have sold for in an arm’s length transaction on the January 1, 2016 valuation day set by the Act.

17The second mandate of the Board is provided in s. 44.(3)(b) of the Act which provides:

… The Board shall … 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.

18Section 19.2(1)4 of the Act prescribes the valuation days, which provides:

Valuation days

19.2(1) Subject to subsection (5), the day as of which land is valued for a taxation year is …: For the period consisting of the four taxation years from 2017 to 2020, land is valued as of January 1, 2016.

19Section 40.(17) of the Act places “the burden of proof as to the correctness of current value” on MPAC.

Issue No. 1: What is the correct current value of the Subject Property for the taxation years 2017, 2018 and 2019

Current Value – Evidence and Analysis

MPAC’s Evidence

20Ms. Steiner, MPAC’s witness, submitted into evidence the valuation report prepared by Mr. Ross respecting the Subject Property, dated March 12, 2019.

21Ms. Steiner testified that she has been a property valuation specialist, employed by MPAC for over 25 years and one of the municipalities which she is responsible for is the Kenora district of Northwestern Ontario, where the Subject Property is located.

22Ms. Steiner testified that although she did not prepare the valuation report, she inspected the property on March 14, 2017. During cross-examination, Ms. Steiner confirmed that during the inspection, she noticed that there is a significant decline at the back of the Subject Property, more than the adjacent vacant commercial lot on 513 Main Street and that the drop on this decline on the Subject Property is between 6 to10 feet, and affected half of the lot. Ms. Steiner added that due to this significant decline, MPAC adjusted the lot size of the Subject Property. The actual frontage was 114.28 feet by an actual depth of 205.83 feet for a site area of 0.54 acres. MPAC adjusted the lot size to an effective frontage of 100 feet by an effective depth of 117.60 feet for an effective lot size of 0.27 acres. Ms. Steiner also testified that the Subject Property is undeveloped and treed.

23Ms. Steiner further testified that the market in Northwestern Ontario was flat from 2012 to 2016 and no time adjustment was produced.

24Ms. Steiner presented only one sale of a vacant commercial land which sold at June 2016 for $15,000, with a time adjusted sale price of $14,451. This sale property is 0.4354 kilometres from the Subject Property. It has an effective frontage of 100 feet and an effective depth of 107 feet, for an effective site area of 0.25 acres. Ms. Steiner testified that this sale property is similar to the Subject Property in terms of the size and location. She also added that the Subject Property has access to Highway 17 and potential access to the side street, Rand Street and that access for the Subject Property means that the Subject Property has the ability to have a public or private roadway without any legal restriction to access it. She submitted that for assessment purposes the Subject Property would be deemed to have access.

25Ms. Steiner further testified that MPAC has recognised that the Subject Property is undeveloped, by not applying the 100% upward adjustment to its current value assessment (“CVA”), which was applied to MPAC’s only sale comparable which is a developed lot. Ms. Steiner concluded that since MPAC’s comparable sale sold for $15,000 and due to the topography of the Subject Property, which resulted to an adjusted lot size by approximately 50%, the recommended value of the Subject Property at $7,000 should be confirmed. She also testified that the 2012 CVA for the Subject Property was $10,000 and the Appellant did not appeal the 2012 assessment.

Appellant’s Submissions

26The Appellant did not serve and file any evidence. He used MPAC’s valuation report to make his submissions to the Board.

27The Appellant confirmed from Ms. Steiner that she carried out the scope of work on the Subject Property and consequently she has first-hand knowledge about it.

28The Appellant submitted that MPAC’s Valuation Report is not accurate. He questioned Ms. Steiner on the accuracy of MPAC’s evidence about the Subject Property. Ms. Steiner confirmed during cross-examination that there could be a ditch in front of the Subject Property but not a significant ditch that would impact its value. She also confirmed that during the inspection, she did not see a driveway to the Subject Property and she did not measure the amount of the drop in the decline at the back of it, which could be greater than 6 to 10 feet. She further confirmed that she did not see the necessity of taking photographs of the decline since she was physically there to inspect the Subject Property and she further emphasized that 50% of the lot is still a good portion and would be useable.

29The Appellant submitted that there could be a need to have a retaining wall at the back of the Subject Property to address water retention from a neighbouring property and a government body would have to regulate the construction of the retaining wall. Ms. Steiner testified that she could not speak to this and that presently there is no need for a retaining wall at the back of it.

30The Appellant further argued that MPAC’s only sale is superior to the Subject Property, it is leveled, partially paved, has access and a driveway to Highway 17 and it is not treed and has no ditches (Ms. Steiner confirmed during cross-examination that this sale is the same as MPAC’s Sale 3 (209-211 Main Street) used in MPAC’s valuation report for the Appellant’s other appeals of the vacant commercial lots adjacent to the Subject Property).

31The Appellant testified that there are no chances that MPAC’s current value for the Subject Property is correct, since he asserted that the Township is “practically giving away its land for a purchase price of $1,000”. Consequently, he submitted that the correct current value of the Subject Property should be $1,000.

32The Appellant concluded by submitting that MPAC has not provided an accurate valuation report to quantify the magnitude of the issues with the Subject Property. He emphasized that taxpayers should be able to rely on the work product of MPAC. Furthermore, he submitted that MPAC should be able to make adjustments on the Subject Property for the ditch, lack of access to Highway 17 and the decline at the back of the Subject Property.

MPAC’s Submissions

33Ms. Roper submitted that the Appellant’s submissions to the Board are opinion based and that the Appellant has not provided evidence to quantify the downward adjustments to the Subject Property and his reference to potential future costs on developing the Subject Property are all hypothesis. In support of her argument she referred the Board to its prior decision in Garden Trail Development Ltd. v. Municipal Property Assessment Corp. Region 15, [2015] O.A.R.B.D. No. 282 (“Garden Trail”) at paragraph 37, where the Board determined:

In regard to the Appellant having to bear extraordinary costs in developing the land the Board finds this argument to be self-serving. It is expected that when a land developer is considering purchasing development lands that they will perform their due diligence and take into account all aspects of the potential purchase, including in assessing whether the land in question would be a good investment. Also included in this due diligence would be considering land preparation costs. This reduction, if granted, would eventually be borne by the tax payer to the benefit of the Appellant, and the Board finds this unacceptable. The Board doubts that any developer is going to purchase and prepare land to be sold at a loss. Therefore, the Board puts no weight on this argument.

Findings on Issue 1

Board’s Analysis – Correct Current Value

34Under s. 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 arm’s length and market-tested sales of comparable properties located nearby, as close as possible to the legislated valuation date of January 1, 2016.

35Apart from his testimony, the Appellant did not provide any evidence neither did he present any comparable market sales. He submitted that the Township is selling its properties for a minimal amount of $1,000 and if the Township is diluting the market, it will be difficult to sell the Subject Property and that the correct current value for the Subject Property is $1,000. The Township was not represented at the hearing to provide evidence of these sales (if any), neither did the Appellant provide any corroborating evidence of sales of these properties. During cross-examination, Ms. Steiner testified that she was not aware of these sales by the Township. This was of limited assistance to the Board in determining the correct current value of the Subject Property; therefore, the Board puts no weight on this evidence.

36The Appellant further submitted that the Subject Property qualifies for downward adjustments to its CVA, due to its declining topography at the back, its lack of access to Highway 17, the ditch in front of it and there could be a need to construct a retaining wall at the back of it to address any drainage issue from a neighbouring property. He also emphasized that Ms. Steiner did not measure the decline at the back of the Subject Property; consequently, the magnitude of this decline cannot be ascertained.

37Regarding access to Highway 17, Ms. Steiner testified that the Subject Property could have potential access to Highway 17 and that access for it means that it has the ability to have a public or private roadway without any legal restriction to access it. This does not mean that the Subject Property already has access but could have access. The Board notes that this marks a difference between the Subject Property and MPAC’s sale with access to Highway 17. The Appellant insists that this affects the marketability of the Subject Property but has not provided any evidence in this regard. The Appellant did not provide any evidence to quantify the downward adjustments for access, a ditch, or retaining wall. The Board read in its opening statement that the Board requires evidence to quantify or measure the impact of any unique situation against the assessed value of the Subject Property. The Board cannot speculate or arbitrarily calculate an impact to the Appellant’s assessed current value. Accordingly, the Board cannot make any downward adjustment to the determined current value of the Subject Property without quantitative evidence.

38The Appellant also submitted that Ms. Steiner did not measure the decline at the back of the Subject Property and her evidence could be inaccurate. Ms. Steiner testified that she conducted the onsite inspection although she did not provide photographs. She submitted that based on her onsite inspection of the Subject Property and her over 25 years’ experience as a property valuation specialist, MPAC adjusted the Subject Property’s lot size from 0.54 acres to 0.27 acres, resulting to only 50% of the lot size being valued. The Appellant did not provide any evidence of this decline neither did he provide evidence to quantify it. If the Appellant wanted to dispute the declining topography of the Subject Property, he could have provided his own evidence to contradict MPAC’s evidence such as by providing photographs of his property. I am satisfied that Ms. Steiner’s first hand evidence and efforts to evaluate the Subject Property is more reliable and quantifiable than the Appellant’s bare statements which are not supported by any other evidence. The Board accepts MPAC’s quantification of the decline at the back of the Subject Property and also used this factor in arriving at the correct current value of the Subject Property.

39The Board recognizes that MPAC’s evidence is not without its weakness. However, the Board evaluates and weighs all the evidence before it and is using the best evidence presented at the hearing to arrive at the Board’s determinations. There was only one sale that MPAC presented and the Board used this sale being the best evidence available and presented at the hearing to determine the current value range of the Subject Property. This property sold in June 2016 at $15,000. This sale is within the shoulder years for the valuation date of January 1, 2016, which is 12 months before and after the valuation date. Ms. Steiner further provided a time adjusted sale amount of $14,451. She did not testify on how this time adjusted sale amount was derived, there were no sales presented to justify this time adjustment factor of 0.9341 presented in MPAC’s valuation report. The Board further notes that MPAC provides in its valuation report that the “market in North Western Ontario was considered flat (2012 to 2016) and no time adjustments were produced”. The Board does not understand how MPAC arrived at its time adjusted sale price for this sale. Due to the lack of data to support this time adjusted sale price, the Board does not find the time adjusted sale price for MPAC’s sale useful in determining the correct current value for the Subject Property.

40The Board finds that MPAC’s only sale comparable is superior to the Subject Property. Ms. Steiner confirmed during cross-examination that this sale comparable is partially paved, it has access and a driveway to Highway 17, it does not have any trees on it and it is developed. All these features make it superior to the Subject Property. Ms. Steiner further testified that MPAC recognised that this sale is developed and applied a 100% upward adjustment to it. MPAC’s sale is strikingly different from the Subject Property. Ms. Steiner did not testify that MPAC’s sale has a declining topography. She testified that due to the magnitude of the decline at the back of the Subject Property, which she admitted is greater than the drop of the decline on the other parcel adjacent to it (513 Main Street), she estimated the drop of the decline to the Subject Property to be approximately 6 to 10 feet, while she estimated the drop of the decline for 513 Main Street to be about 4 to 6 feet. This means that the impact on value for the Subject Property is greater than that of 513 Main Street. However, the Subject Property’s effective site area of 0.27 acres is larger than the adjusted lot size of 513 Main Street, which is 0.22 acres. In determining the correct current value of the Subject Property, the Board did not use the sale price of MPAC’s only sale; rather, it used its assessment, since the sale was for developed land compared to the Subject Property that is undeveloped. In the assessment of this sale property, MPAC provided the value of this property excluding the 100% upward adjustment for developed land, and also the value using the downward neighbourhood adjustment of (-49%) as $6,776. Ms. Steiner had confirmed during cross-examination that MPAC’s only sale comparable is the same as Sale 3 property used in MPAC’s valuation report in the appeals of the other adjacent lots, which belongs to the Appellant. On the balance of probabilities, it is more probable than not that the current value of the Subject Property should be $6,776, as this value excludes the 100% upward adjustment for developed land and it is greater than the CVA of 513 Main Street due to its larger effective site area of 0.27 acres.

41The Board therefore determines that the correct current value for the Subject Property is $6,776.

Issue No. 2: Whether there should be an equitable reduction of the current value pursuant to [s. 44(3)](https://www.canlii.org/en/on/laws/stat/rso-1990-c-a31/latest/rso-1990-c-a31.html) of the [Act](https://www.canlii.org/en/on/laws/stat/rso-1990-c-a31/latest/rso-1990-c-a31.html), and, if so, what the amount of this reduction should be.

Equity Analysis

42Section 44.(3)(b) of the Act directs that after determining current value, the Board shall 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.”

43The burden of proof rests with the party that alleges that it would be inequitable to assess the Subject Property at its current value, and in this appeal is the Appellant. The Appellant has to establish, on a balance of probabilities, that an equitable reduction is required. The Appellant did not provide any evidence. MPAC submits that the Appellant did not provide any statement of issues and it does not believe that equity is an issue in this appeal.

44The Board finds that there is no evidence to prove that an equitable reduction is required.

CONCLUSION

45Based on all the evidence, the Board determines the correct current value of the Subject Property to be $6,776 and determines that this correct current value is equitable with the assessment of similar properties in the vicinity and therefore no equity adjustment is required.