Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: October 17, 2019

FILE NO.: WR 161994

Assessed Person(s): David Herbert John Allen; Kathryn Alberta Allen

Appellant(s): David Herbert John Allen; Kathryn Alberta Allen

Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 29

Respondent(s): Township of Larder Lake

Property Location(s): 16100 Highway 66

Municipality(ies): Township of Larder Lake

Roll Number(s): 5462-000-002-07500-0000

Appeal Number(s): 3340258 and 3367670

Taxation Year(s): 2018 and 2019

Hearing Event No.: 721883

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

Heard: August 15, 2019 at Larder Lake, Ontario

APPEARANCES:

Parties	Counsel/Representative
David Herbert John Allen; Kathryn Alberta Allen	Self-represented
MPAC	Tyler Allard
Township of Larder Lake	No one appeared

MEMORANDUM OF ORAL DECISION DELIVERED BY LESLIE FLEMMING ON AUGUST 15, 2019

INTRODUCTION

1Larder Lake is a lake located in the District of Temiskaming east of the Town of Kirkland Lake and a few kilometers west of the border of Ontario and Quebec. David Herbert John Allen and Kathryn Alberta Allen (the “Appellants”) own a 47-acre parcel of land bordering the lake, upon which is situated a house and a large garage or barn. Despite the fact that the residence located on the property does not lie in close proximity to the water, the parcel abuts the lake and is occupied year round by Mr. Allen. It is therefore classified as “Residential Single Family Detached” on water. The value of the property was returned in the amount of $275,000 for the current assessment cycle. The valuation day for the current cycle is January 1, 2016, and the Appellant appeals the values for 2018 and 2019.

2Firstly, I must make a finding on the issue of the current value of the land on the valuation day. Current value is defined as “in relation to land, the amount of money the fee simple, if unencumbered, would realize if sold at arms-length by a willing seller to a willing buyer”. The Assessment Act, R.S.O. 1990, c. A.31, as amended (“Act”) also tells us that the assessment will be based on Current Value.

3The second task that I have in this appeal is to have reference to the value of the land 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. In other words, assessment is based on current value, except where it would be inequitable to use that value. If that is the case, where there is sufficient evidence as to the amount by which the current value is inequitable with similar properties in the vicinity, I am to reduce the current value by that amount.

4Section 44.3(b) of the Act states:

Same, 2009 and subsequent years

(3) For 2009 and subsequent taxation years, in determining the value at which any land shall be assessed, the Board shall,

(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.

5The Act also provides that MPAC has the burden of proving the correctness of their estimate of current value. The Assessment Review Board (the “Board”), in carrying out its work, has the authority to stand in the shoes of MPAC as it were. However, the Board does not have the jurisdiction to increase the amount of the assessment in a s. 40 appeal such as this one.

Evidence of the Parties

6The Subject Property is a 47.75 acre parcel abutting Highway 66, on which is located a single-storey residence comprised of 1,142 square feet (“sq. ft.”). Because the parcel of land abuts Larder Lake, MPAC considers this property a single-family detached home on water. MPAC ranked the quality of construction of the home as six out of ten. The home has a partially finished basement. It has an effective year built of 1985. The home was assessed in the amount of $275,000 for 2018 and 2019, and this assessment is the subject of this appeal.

7Tyler Allard represented MPAC. He gave evidence that his requests to inspect the property were refused by the owner, but Mr. Allard was able to confirm the measurements of the house and outbuildings when he visited the Subject Property in May, 2017.

8Mr. Allard explained that the method of appraisal chosen for the Subject Property, and the method used most frequently with residential assessment, is the direct sales comparison method. He provided evidence respecting six properties on which are located one storey homes ranked for quality of construction in the same category as the subject property or similar. While he would have preferred to select six home sales within the same neighbourhood as the Appellant, there were insufficient sales in the immediate area to do this. The selected sales were located between 11 and 30 kilometers from the Subject Property. All are bungalows similar in size to the Subject Property, and all had sheds and/or detached garages. The sales of these properties occurred from June, 2012, to August, 2016, and the actual sale prices ranged between $225,000 for a slightly smaller home on 145 acres to $400,000 for a slightly larger home with partially finished basement on 0.81 acres.

9MPAC usually calculates the average price changes in the market in the vicinity over time so that the comparable sales can be adjusted to the price that they would have been on January 1, 2016. In this case, given that the comparable sales were not in close proximity to the Subject Property, Mr. Allard chose to use actual sales prices. Each of the homes was located on a lake, but none were on Larder Lake. The six comparable homes were on lots ranging from approximately half an acre to 145 acres.

10Based on the six sales, Mr. Allard estimated that the current value of the Subject Property was close to $350,000. He noted that the Appellant has the property listed for sale for more than this at the present time.

11Mr. Allard also prepared an Equity Analysis in order to check into the accuracy of residential assessments in the area. He analysed the Assessment-to-Sale Ratios of 30 residential property sales in the vicinity, and found that homes had generally been assessed at 80% of their sales values. The Act makes it incumbent upon MPAC to factor in a reduction in value on the ground of equity to ensure that properties in the same vicinity are assessed equitably with other, similar properties. Mr. Allard applied the equity reduction of 20% arriving at a final assessed value of $275,000.

12Mr. Allen testified on his own behalf, and explained that he has had a history of requesting reconsiderations from MPAC and having no success. He refused to allow Mr. Allard to inspect the property, having formed an opinion that MPAC staff members have been unreasonable in their treatment of some of his neighbours.

13Mr. Allen’s main points in support of his appeal were these:

(a) the property is described as a house on the water, but the residence is actually a long way away from the lake shore;

(b) Larder Lake is smaller than the other lakes on which MPAC’s comparable sales are located. Larder Lake is not as desirable a lake for fishing or recreational use, a factor which should be reflected in the value of the home.

(c) Mr. Allen had the property up for sale for over two years, and has reduced the asking price twice. It is currently listed for over $350,000, but he has not had any interest at that price.

(d) He is credited with having a shed, a carport and a detached garage. However, the shed collapsed under the snow load in early 2019, and should not be included in the assessment.

14At that point in the proceeding, the hearing was recessed in order to allow Mr. Allard and Mr. Allen to attend the Subject Property and look at the damaged shed. I asked Mr. Allard to bring back a photograph of the structure, which he did.

15Upon reconvening, Mr. Allard testified that the shed had added $12,000 worth of value to the assessment prior to its partial collapse. The photographs showed that the shed consisted of two parts, and one of those, or about half the structure, had collapsed. Mr. Allard advised that, had Mr. Allen contacted MPAC about the damaged shed, it may have been taken into consideration in the assessment for 2019.

16Mr. Allen provided no evidence of the cost to rebuild or repair the damaged shed, or the cost to remove it.

17Mr. Allen also raised some issues in his testimony but provided the Board with no evidence to substantiate his concerns. For example, while Mr. Allen argued that his location on Larder Lake was in fact inferior to the locations of other properties on other lakes, he did not provide photographic or other evidence comparing lake qualities.

18Mr. Allen indicated that the property had not garnered any interest when offered at $350,000. However, he failed to explain why he continued to offer his property for sale at this amount.

19Mr. Allen provided no other evidence of sales of similar homes in the area which could substantiate his assertion that his property was not worth $275,000.

ANALYSIS AND CONCLUSION

20The usual method used in valuing residential property is the direct sales comparison method. In this case MPAC provided six single family detached homes on water which had been sold between June, 2012, to August, 2016. While the period of time is longer than preferred by the Board, Mr. Allard explained that there were few sales to choose from of similar properties, and no other comparable residential sales on Larder Lake itself. The homes, all bungalows, sold between $225,000 for 509485 Hough Lake Road to $400,000 for 98 Bernhardt Drive. The site areas ranged between half an acre to 145 acres All six of the comparable sales included in MPAC’s materials were assessed at amounts less than their selling prices. All six homes were described as being the same quality as the subject property. Two of the homes, both located on Rosegrove Road, are also almost identical in size to the Subject Property, although with much less acreage. These homes sold for $270,000 and $360,000. These sales confirm that the value given the Subject Property by MPAC is justifiable.

21If we average the selling prices of all six comparable homes, the average sales price is $351,666, or just marginally above the value that MPAC gave the Subject Property prior to factoring in the equity amount. The median value of the six sales is $360,000. These comparable sales prove that a pre-equity value for the Subject Property of $350,000 is fair and supportable. However, as noted by MPAC, the consistent presence of assessments approximately 20% lower than the current values of single detached residential homes in the vicinity means that the same reduction must be applied to the Subject Property, with a resulting assessment value of $275,000.

22Lastly, factoring in the destruction of at least 50% of the shed on the property, but without any other evidence of value, the Board reduces the 2019 assessment by $6,000, which is half of MPAC’s estimate of value for the entire structure prior to its collapse. The 2019 current value of the Subject Property is therefore reduced to $269,000.

23No further adjustment is required on the ground of equity.