Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: February 07, 2019

FILE NO.: WR 157942

Assessed Person(s): Kelly White

Appellant(s): Kelly White

Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 03

Respondent(s): City of Ottawa

Property Location(s): 3940 Limestone Road

Municipality(ies): City of Ottawa

Roll Number(s): 0614-422-830-13301-0000

Appeal Number(s): 3320455

Taxation Year(s): 2015

Hearing Event No. 709365

Legislative Authority: Section 32 of the Assessment Act, R.S.O. 1990, c. A.31, as amended

Heard: January 9, 2019 by Telephone Conference Call

APPEARANCES:

Parties

Representative

Kelly White

Self-represented

MPAC

David Lynch

City of Ottawa

No one appeared

DECISION OF THE BOARD DELIVERED BY JENNIFER GRIFFITH

Background

1Kelly White (“Appellant”) is the owner of 3940 Limestone Road (the “Subject Property”), which is located in the City of Ottawa.

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 2013 to 2016 taxation years, MPAC is required to assess this value as of the valuation date, January 1, 2012 (“current value”).

3MPAC has assessed the current value of the Subject Property at a total value of $253,000 for the 2015 taxation year, made up of a corrected assessment of $177,000 and a supplementary assessment of $76,000. The only value at issue in this appeal is the $177,000 corrected assessment.

4The Appellant has filed an appeal for taxation year 2015 with the Assessment Review Board (the “Board”), pursuant to s. 40 of the Act. It is their position that MPAC’s assessment of current value is too high and asserts no position on what that value should be. At this hearing, MPAC takes the position that its assessed value should be $253,000 and that the corrected assessment value of $177,000 under appeal should be confirmed. This value is clearly supported in Municipal Property Assessment Corporation vs. White, Region No. 03, [2018] O.A.R.D. CanLII 130505 (“White”) which states, at paragraph 21, that “the deemed appeal is only regarding the $177,000 assessment for the 2015 taxation year. That was the only assessment in place from January 1, 2015 through May 3, 2015. The total assessment was $253,000 from May 4, 2015 through December 31, 2015, but only $177,000 is in dispute because the parties agreed on the $76,000 increase in value”.

5Pursuant to s. 40(11) of the Act, the City of Ottawa is a party to this proceeding. However, no one appeared at the hearing on its 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. MPAC takes the position that an equitable reduction is not required. The Appellant asserts no position on equity. Therefore, equity is not at issue at this hearing.

7At 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 2015 taxation year is $209,000. Therefore, the Board subtracts the agreed to supplementary assessment value of $76,000 to arrive at a value of $133,000 ($209,000 - $76,000); and reduces the corrected assessment of $177,000 to $133,000 for the Subject Property for the 2015 taxation year. Pursuant to s. 44.(3)(b) of the Act, an equitable reduction of this value is required.

RELEVANT LEGISLATION

8Relevant sections of the Act are as follows:

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.

Assessment based on current value

19(1) 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:

1. For the 2006, 2007 and 2008 taxation years, land is valued as of January 1, 2005.

2. For the period consisting of the four taxation years from 2009 to 2012, land is valued as of January 1, 2008.

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.

Correction of errors, etc., in assessment roll

32 (1) Despite the delivery of any notice provided for under this Act, the assessment corporation at any time before the time fixed for the return of the assessment roll may correct any defect, error, omission or misstatement in any assessment and alter the roll accordingly.

Burden of proof

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.

Same, 2009 and subsequent years

44.(3) 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.

ISSUES

9The issue to be determined on this appeal is the correct current value of the Subject Property for the taxation year 2015.

Description of the Subject Property

10The Subject Property is a one-storey, single-family detached dwelling, located at 3940 Limestone Road, in the City of Ottawa. The Subject Property was built in 1985, with a total building area of 1,889 square feet (“sq. ft.”), a frontage of 320 feet and a total lot size of 2 acres.

DISCUSSION, ANALYSIS AND FINDINGS

The correct current value of the Subject Property for the taxation year 2015

MPAC’s Evidence

11David Lynch represents MPAC. Mr. Lynch presents a Valuation Report respecting the Subject Property, which was prepared by Bill Deevy, a former Property Valuation Analyst which he submits into evidence. Mr. Lynch advised the Board that Mr. Deevy has retired and because he is knowledgeable about the issues he has taken over carriage of the appeal.

12Mr. Lynch provides the Board with a brief history of the Subject Property. He states that the Subject Property was purchased in July, 2014 for $181,000; renovated and was occupied in May 2015; appealed the returned value of $390,000 for the taxation year 2015 with the Board; the appeal was dismissed in White and an appeal of the $177,000 corrected assessment was deemed. White also found that Mr. White had a binding agreement with MPAC on the $76,000 supplementary assessment for the 2015 taxation year. There was also a tax appeal filed for the 2014 taxation year.

13As a result of the 2014 tax appeal, Mr. Lynch states that MPAC became aware that the Subject Property was used for Marijuana Grow Operation (“MGO”) which led to a Court Order which prevented occupancy of the Subject Property, because it was deemed substantially un-useable.

14MPAC becoming aware of the state and condition of the Subject Property because of the MGO, revised the returned assessment for the taxation year 2015 from $390,000 to $177,000 pursuant to s. 32(1.1) with notice, which is the subject of this appeal. Mr. Lynch states that the revised assessment of $177,000 reflects a 90% reduction of the assessed value of the house and garage.

15In support of current value, Mr. Lynch presents an analysis of three sales of suggested comparable properties which occurred over the period 2010 to 2012, in the same homogeneous neighbourhood as the Subject Property. The analysis contains both actual and time-adjusted sales prices.

16These three suggested comparable properties are located at 1248 Kinburn Side Road, sold in 2010 for $277,000 (time-adjusted sale price $292,226); 1279 Galetta Side Road, sold in 2012 for $325,000 (time-adjusted sale price $322,985); and 3957 Stonecrest Road, sold in 2011 for $345,000 (time-adjusted sale price $353,855). On average these three suggested comparable sales have a total building area of 1,848 sq. ft.; lot size of 2.56 acres; year built 1985; a quality rating of 6.7; and sold at a time-adjusted sale price of $175.08 per sq. ft. This is compared to the Subject Property with a total building area of 1,889 sq. ft.; a lot size of 2 acres; built in 1985; a quality rating 7; and assessed at a value of $93.70 per sq. ft. Applying the average value per square foot of building space of $175.08 to the Subject Property results in a value of $331,000 rounded ($175.08 x 1,889 sq. ft. of total building area).

17As stated above, Mr. Lynch also presents evidence that the Subject Property was sold in 2014 for $181,000, because of the state and condition as a result of the MGO.

18Based on the above evidence, Mr. Lynch is of the view that the open market sales with an average sale price of $331,000 (rounded); and the sale of the Subject Property in 2014 for $181,000 supports the adjusted assessment of $177,000.

MPAC’s Submissions

19Relying on its evidence, MPAC submits that although the sales range from $181,000 to $331,000, the Subject Property is the subject of unlawful activities (MGO), which the court declared substantially un-useable and therefore, was unoccupied. Therefore MPAC is only seeking to have the current value confirmed at $177,000 for the 2015 taxation year.

Appellant’s Evidence

20On December 18, 2018, Mr. White filed the same disclosure which was argued at the Motion to dismiss hearing in White, and asking the Board to adopt the disclosure as his evidence for today’s hearing.

21Mr. White testifies that the whole assessment process is a fraud, and lacks transparency and integrity. The Board assured Mr. White that the appeals process is independent, and re-assured him that all parties will be given an opportunity to present their case; that the evidence will be analyzed; the applicable legislation will be applied to the evidence; and that the decision will be fair and just. In response, Mr. White states that all he wanted to say is that the whole process is a fraud.

22Mr. White states that both the Minutes of Settlement (“MOS”) for the supplementary assessment, effective May 4, 2015, reducing the value from $176,000 to $76,000; and the MOS for the Returned Assessment for the taxation year 2016, reducing the value from $367,000 to $238,000 are also a fraud and lack transparency. Those agreements were addressed at length in White and the Board found those agreements to be valid.

23Mr. White presents no sales evidence in support of current value.

Appellant’s Submissions

24Mr. White submits that MPAC’s suggested comparable properties are more marketable and located in a more desirable area than the Subject Property. He argues that the Subject Property’s neighbour on the southern side is an active beef cattle operation and on the northern side is an active sheep farm.

25Mr. White asserts no opinion of current value.

Findings on Current Value

26Under 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.

27In regard to the issues of:

a. transparency and fraud; and

b. MOS for the supplementary assessment for 2015, reducing the value from $176,000 to $76,000; and the MOS for the 2016 taxation year, reducing the value from $367,000 to $238,000.

The Board finds that these same issues were sufficiently addressed in White, which is included in Mr. White’s evidence. The Board offered Mr. White another opportunity to explain why he felt that the process is a fraud and lacks transparency. Instead, Mr. White did not embrace the opportunity and maintains his position that the process is a fraud. Therefore, the Board puts no weight on these issues.

28In regard to the issues that MPAC’s suggested comparable properties are more marketable and located in a more desirable area than the Subject Property, the Board agrees that the suggested comparable properties would be more marketable, because they are not the subject of MGO, as was the Subject Property; they are not surrounded by farms; and they appeared to be in fairly good condition.

29On the other hand, the Board finds that the Appellant presents no alternative sales value or suggested comparable properties for comparison to the Subject Property, in its current state. Despite the fact that the Appellant presents no sales evidence, the Board recognizes that there is merit to the Appellant’s issues regarding MPAC’s three suggested comparable properties.

30Based on the above issues, the Board analyzed the sale prices of the three suggested comparable properties based on lot sizes. These three suggested comparable properties are on average similar in lot sizes and with sale prices ranging from $104,366 to $161,492 per acre. The Board finds that the Subject Property is more likely to be sold at the lower end of the range, because it is located in a less desirable area and surrounded by farms. Applying the $104,366 to the Subject Property results in a value of $209,000 ($104,366 x 2 acres).

31The Board also analyzed the sale price of $181,000 of the Subject Property which occurred in July 2014, when it was the subject of MGO and un-useable. However, this sale occurred slightly over two years after the valuation date of January 1, 2012. Based on this evidence the Board can only conclude that the value would have been something less than the sale price of $181,000, as of the valuation date January 1, 2012.

32In regard to current value, Mr. White presents no sales evidence, and asserts no position of current value. Therefore, the Board is forced to rely only on the sales presented into evidence, including the sale of the Subject Property in 2014.

33In reviewing the analysis of the three sales of suggested comparable properties based on total building area; the analysis of the three suggested comparable properties based on total lot size; and the sale of the Subject Property in July, 2014, presented by MPAC, the Board finds that the best evidence in support of current value is the adjusted sale price per acre of $104,366 based on total lot sizes. When this sale price is applied to the Subject Property it results in a value of $209,000.

34Based on the evidence, the Board finds the current value to be $209,000 in its renovated condition, which includes the $76,000 supplementary assessment.

DECISION

35The Board finds that the current value of the Subject Property when it was repaired in the 2015 taxation year is $209,000. Therefore, the Board subtracts the agreed to supplementary assessment value of $76,000 to arrive at a value of $133,000 ($209,000 - $76,000) and reduces the corrected assessment of $177,000 to $133,000 for the Subject Property for the 2015 taxation year.