Linda Ann Boyle and Robert Peter Bernstein v. Municipal Property Assessment Corporation Region 09 and City of Toronto, 2020 CanLII 103263

Tribunals Ontario / Assessment Review Board

Tribunals Ontario

Tribunaux décisionnels Ontario

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: December 18, 2020

FILE NO.: WR 167543

Assessed Person(s): Linda Ann Boyle and Robert Peter Bernstein

Appellant(s): Linda Boyle and Peter Bernstein

Respondent(s): Municipal Property Assessment Corporation Region 09

Respondent(s): City of Toronto

Property Location(s): 152 Woburn Avenue

Municipality(ies): City of Toronto

Roll Number(s): 1904-116-170-04900-0000

Appeal Number(s): 3394990

Taxation Year(s): 2020

Hearing Event No.: 736167

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

APPEARANCES:

Parties

Representative

Linda Boyle and Peter Bernstein

Self-represented

Municipal Property Assessment Corporation

Loris Fata

City of Toronto

No one appeared

HEARD: November 3, 2020 by telephone conference call

ADJUDICATOR(S): Dan Weagant, Member

DECISION

OVERVIEW

1Linda Boyle and Peter Bernstein (the “Appellants”) renovated 152 Woburn Avenue (the “subject property”) in 2018. Subsequent to that renovation, the Municipal Property Assessment Corporation (“MPAC”) conducted a review of the assessment and for the 2020 taxation year, it increased the assessment to $1,507,000.

2In response to the re-assessment applied by MPAC, the Appellants filed an appeal, indicating that the assessment for 2020 was too high and that the correct assessment should be in the range of $1,200,000 to $1,400,000.

Issues for the Hearing

3At issue in this proceeding is:

1. A determination of the current value of the subject property;
2. Whether an equity reduction in the current value should be made when the current value determined is compared with the assessments of similar properties in the vicinity.

Result

4The Board finds that the correct current value of the subject property is $1,527,000. The Board also finds that, when reference is made to the assessments of similar properties in the vicinity, the current value of the subject property must be reduced for it to be considered equitable. Accordingly, the Board finds the assessment of the subject property is reduced from $1,507,000 as returned for the 2020 taxation year, to $1,338,000, in the Residential property class.

ANALYSIS

Description of Subject Property

5The subject property is a single-family dwelling in the Bedford Park neighbourhood of Toronto. It was renovated in 2018. It is agreed by the Parties that the renovations were relatively extensive, including improvements to the foundation, replacement of wiring and general updating of the dwelling. It was the first renovation undertaken by the Appellants since they purchased the subject property in 1992. No additional square footage was added to the living area as part of these renovations.

6The dwelling comprises 1,474 square feet of living area, on two storeys. The building is situated on a lot measuring 3,485 square feet, or approximately 0.08 acres.

Issue 1 – What is the correct current value of the subject property?

7MPAC completed a valuation report that compared the time-adjusted sale values of five properties in the Bedford Park area to the subject property. These five sales took place between June 2015 and December 2016 for prices ranging from $1,468,000 to $1,755,000, with time-adjusted values ranging from $1,337,000 to $1,736,000 (rounded). MPAC considered four of these comparable properties to be inferior in value when compared to the subject property. It considered the fifth property in the sample to be relatively comparable to the subject property.

8All five sales were adjusted accordingly to reflect the market condition of January 1, 2016 valuation date. Their time adjusted sale prices were divided by their respective square footage, resulting in time adjusted prices per square foot (“TAPPSF”) ranging from $919 to $1,151. This analysis returned a median TAPPSF of $1,036 and a mean TAPPSF of $1,039.

9MPAC determined the current value by applying the median TAPPSF, arriving at a value of $1,527,064 ($1,036 multiplied by the 1,474 square feet of living area at the subject property), or $1,527,000 rounded.

10MPAC had not filed a notice of increased assessment in response to this appeal. Accordingly, MPAC took the position that its sales analysis, having demonstrated a current value above the assessment returned of $1,507,000, the assessment returned should be confirmed by the Board.

11The Appellants made a comparison of the subject property with a single property in the neighbourhood at 176 Melrose Avenue (“Melrose”). Melrose is also a 2-storey dwelling, with 1,574 square feet of living area on a slightly larger lot that the subject property. The Appellants note that even with a slightly smaller house and lot, the subject property has a returned value of $1,507,000 whereas Melrose is assessed at $1,284,000. The Appellants noted that Melrose was renovated in 2014, whereas the subject property was renovated in 2018. They submitted that this difference is off set by the differences in lot area and dwelling size between the two buildings and consequently, Melrose at $1,284,000 is a good indication of the current value of the subject property.

Findings on Issue 1

12Section 1 of the Assessment Act, R.S.O. 1990, c. A.31 (“Act”) defines current value as the amount of money that would be exchanged between a willing buyer and a willing seller for a property that is unencumbered by external pressures that would otherwise affect its sale value. The Act goes on to state that for the 2020 taxation year, the valuation date for such a transaction is January 1, 2016.

13MPAC’s evidence of current value made specific reference to both of these sections of the Act. Each sale relied upon by MPAC was time adjusted so that it could be compared to the subject property. In addition, MPAC’s data relies on actual sales of comparable properties in the Bedford Park neighbourhood.

14By contrast, the Appellants relied on a comparison of the subject property to one other property in the neighbourhood. By comparing the subject property to this one other property, they concluded that the returned value of the subject property was too high by noting specific similarities and differences between the subject property and their single comparable property. The Appellants concluded that the assessment of the comparable property used was a reasonable indication of the current value of the subject property and submitted that the assessment of the subject property should be reduced to $1,284,000.

15The Act is clear in that any determination of current value should be made by making reference to the sale values of the subject property (if possible) or failing that, by referring to sale values of comparable properties. This approach ensures that findings of current value are based on sale values that represent what a property would sell for between a willing buyer and a willing seller.

16The Board finds that the best indication of current value in evidence is that of MPAC, whose evidence most strongly reflected the current value definition in the Act.

17The Board finds that the current value of the subject property is $1,527,000.

Issue 2 – When reference is made to the assessments of similar properties in the vicinity, does the current value determined need to be reduced for it to reflect equitable assessment?

18The Appellants compared the assessment of the subject property with other renovated properties in the neighbourhood, using data collected from MPAC’s website. The data relied upon by the Appellants included square footage of living area, the presence of renovations, specific location and lot configuration and size.

19The Appellants submitted that their selected similar properties all have the same general character and utility as the subject property. They selected five two-storey dwellings in the Bedford Park area that had undergone a renovation. The data relied upon for each of these five properties, as they compare to the subject property is included in Table A.

TABLE A

Property

2016 Current Value Assessment (“CVA”)

Building Living Area (square feet)

Quality of Construction

Renovation year

2016 CVA per square foot of living area

176 Melrose Avenue

$1,284,000

1,574

6.5

2014

$815.76

228 St. Germaine Avenue

$1,285,000

1,416

6.5

2010

$907.49

202 Cranbrooke Avenue

$1,466,000

1,686

7.0

2008

$869.51

162 St. Germaine Avenue

$1,464,000

1,920

6.5

2003

$762.50

259 Cranbrooke Avenue

$1,258,000

1,797

6.5

2005

$700.06

SUBJECT PROPERTY – 152 Woburn Avenue

$1,507,000

1,474

7.0

2018

$1,022.39

20The Appellants submitted that when the assessments of these similar properties are compared with the assessment of the subject property, that of the subject property is too high. They submitted that the assessment of the subject property should be in line with these similar properties and that the current value of the subject property should be reduced to a value in the range of $1,200,000 to $1,400,000. The Board notes that if the assessments per square foot of each of the five properties cited by the Appellants were applied to the subject property’s 1,474 square feet of living area, the results would range from $1,031,888 to $1,337,640.

21To address the question of equitable assessment, MPAC conducted an equity study whereby it compared the assessment of the subject property with the assessments of similar properties in the vicinity. In selecting the similar properties in its study, MPAC chose properties that had sold on a date in proximity to the January 1, 2016 valuation day stipulated in the Act. Where the sale dates differed from the valuation day, MPAC made a time adjustment to the sale value so that each of the properties selected could be equally compared to the subject property and to one another.

22Using 27 property sales, MPAC compared their respective time adjusted sale values to their 2016 current value assessments to arrive at a range of assessment to sale ratios (“ASRs”). ASRs are a common method of determining how the assessments of properties in an area compare to their sale values.

23When the assessments of those 27 properties were compared with their time adjusted sale prices, the range of the resultant ASRs was 0.94 to 1.058 with a median of 0.971. According to MPAC, this means that in the vicinity of the subject property, similar properties are generally assessed at a level of 97.1% of their corresponding, time adjusted sale values. In considering this result as a marker of equitable assessment, MPAC referred to the standards set by the International Association of Assessing Officers (“IAAO”). Those standards state that when an ASR study like this one is conducted, if the median ASR lies between 0.90 and 1.10, there is no necessity to adjust the assessment for the reason of equity. The IAAO considers results within the 0.9 to 1.1 range to indicated that equity of assessment is achieved.

24Based in its analysis, MPAC concluded that the current value assessment applied to the subject property was equitable and that no downward adjustment of the value returned was required.

Findings on Issue 2

25The Act requires the Board to have reference to the assessments of similar lands in the vicinity to determine whether a reduction in the current value determined is necessary for it to represent equitable assessment. This requirement includes two important elements; ‘similarity’ and ‘vicinity’. Neither of these two terms are defined by the Act. The Board must decide on the suitability of similar properties and their vicinity in the context of the case before it and the full extent of the evidence adduced.

26The Parties took two different approaches to determine whether the current value determined should be reduced to reflect equitable assessment. Any reduction of the current value determined is a change from an evidence-based decision of the correct value by the Board. Because of that, any reduction must be made on evidence that is compelling for the purpose.

27MPAC’s approach relies on a sampling of properties that sold in Bedford Park in either 2015 or 2016. The 27 properties in the sample were described as ‘single-family dwellings, not on water.’ These 27 properties are similar to the subject property in that it is a single-family dwelling, not on water. But, the similarity between the subject property and MPAC’s 27 properties is unclear beyond that basic descriptor.

28The Appellants used a much smaller sample of five properties for their equity comparison. While the sample was smaller than MPAC’s, the Appellants’ sample was more specific in its comparison. Where MPAC compared 27 properties based on two comparative characteristics, the Appellants compared their sample with an additional three characteristics (building size, renovation and quality of construction).

29A determinative case in deciding what to use in deciding whether a current value determined requires reduction for the purposes of equity is Municipal Property Assessment Corporation v Loblaw Properties Limited, 2017 ONSC 1299, where Justice Nordheimer wrote, in paragraph 25:

In my view, the proper approach to be taken to determining what are “similar lands in the vicinity” is that set out by Saunders J. in Trizec, that is, that all points of comparison must be considered.

30When reviewing all of the evidence available in this case, there are a total of some 30 to 40 properties that have assessment and property detail evidence available. The Parties advanced several characteristics that they used throughout the hearing to compare the subject property to the other properties in evidence.

31Based on the submissions, the Board considered the properties in evidence that, firstly, had a renovation at a time with relative proximity to the valuation day of January 1, 2016. Next, the Board eliminated all remaining properties with either a quality of construction of less than 6.5 or a completely unfinished basement. Lastly, to eliminate any inaccuracies resulting from economies of scale, where relatively large properties have a lower value per square foot and relatively small properties have a higher value per square foot, all properties left in the sample of less than 90% or more than 110% of the living area of the subject property were removed.

32This process resulted in a distilled sample of five properties that reflect all points of comparison in evidence that are relevant to the question of whether a reduction of the current value is necessary to reflect equitable assessment. A summary of these five properties follows in Table B.

TABLE B

Similar Property

2016 CVA

Living Area (square feet)

Quality of construction

Renovation year

2016 CVA per square foot (rounded)

194 Bedford Park Avenue

$1,455,000

1,603

7

2015

$908

175 Bedford Park Avenue

$1,312,000

1,549

7

2013

$847

176 Melrose Avenue

$1,284,000

1,574

6.5

2014

$816

48 Brookdale Avenue

$1,334,000

1,344

7

2016

$993

15 McNairn Avenue*

$1,386,000

1,455

7

2014

$953

*The Assessment of McNairn Avenue has been adjusted upward by 5% in accordance with the testimony of MPAC’s assessor, to reflect being adjacent to multi-family housing; a characteristic not reflected in the subject property or any of the other four properties in the sample.

33The Board notes that the median assessment per square foot of the five properties in this sample is $908. When this value is applied to the 1,474 square feet of living area of the subject property, the result is $1,338,392 or $1,338,000, rounded. The Board finds that this value represents the equitable assessment of the subject property.

CONCLUSION

34The Board finds that the current value of the subject property is $1,527,000. The Board further finds that, when reference is made to the assessments of similar properties in the vicinity, the current value determined must be reduced to reflect equitable assessment. Accordingly, the Board finds that the assessment of the subject property is $1,338,000.

ORDER

35The Board orders that the assessment of the subject property at 152 Woburn Avenue for the 2020 taxation year is reduced from $1,507,000 to $1,338,000 in the Residential property class.