Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: June 25, 2020

FILE NO.: WR 165042

Assessed Person(s): Damodar Das Agarwal and Jaswant Agarwal

Appellant(s): Damodar Agarwal

Respondent(s): Municipal Property Assessment Corporation Region 15

Respondent(s): City of Mississauga

Property Location(s): 6358 Longspur Road

Municipality(ies): City of Mississauga

Roll Number(s): 2105-150-090-56728-0000

Appeal Number(s): 3381684 and 3406585

Taxation Year(s): 2019 and 2020

Hearing Event No.: 729768

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

APPEARANCES:

Parties	Representative
Damodar Das Agarwal Jaswant Agarwal	Damodar Agarwal
Municipal Property Assessment Corporation	Tanya Janeczek-Boyle
City of Mississauga	No one appeared

HEARD: May 26, 2020 by telephone conference call

ADJUDICATOR(S): Jean-Paul Pilon, Member

DECISION

OVERVIEW

1Damodar Agarwal and Jaswant Agarwal are the owners of a residential property at 6358 Longspur Road in the City of Mississauga (the “Subject Property”).

2Mr. Agarwal (the “Appellant”) appealed the assessment of the Subject Property for the 2019 taxation year. There was a further deemed appeal for the 2020 taxation year before the Assessment Review Board (the “Board”) at the hearing pursuant to section 40(26) of the Assessment Act, R.S.O. 1990 c. A.31 (the “Act”).

3The burden of proof as to the correctness of current value rests with the Municipal Property Assessment Corporation (“MPAC”) pursuant to section 40(17) of the Act. MPAC was represented by Tanya Janeczek-Boyle at the hearing.

4Section 19.2(1)4. of the Act provides that, for the years under appeal in this proceeding, land is valued as of January 1, 2016 (the “Valuation Date”).

5MPAC returned an assessment of $598,000, but Ms. Janeczek-Boyle submitted at the hearing that the correct current value of the Subject Property should be $647,000. MPAC did not seek a higher assessment than the one returned as it might have had it served notice pursuant to Rule 40 of the Board’s Rules of Practice and Procedure (the “Rules”). The Appellant, however, took the position that the current value of the Subject Property should not exceed $493,000.

Issues for the Hearing

6There were two issues at the hearing: (1) the correct current value of the Subject Property; and, (2) whether there should be an equitable reduction of that current value.

Result

7The Board determines the correct current value of the Subject Property to be $598,000 as of the Valuation Date, with no equitable reduction required.

ANALYSIS

Description of Subject Property

8The Subject Property included a single-family detached house built in 1990 with a total area of 2,084 square feet, sitting on 0.09 acres of land. The house had 4 bedrooms, 2.5 bathrooms, a fireplace, air conditioning, forced-air heating, a separate or private driveway and a basement of 963 square feet. It also included an attached single-car garage of 240 square feet. MPAC’s Valuation Report applied its standard rating for determining quality of construction, finding this to be 6.5 for the house, with the garage having a quality rating of 3.

Issue 1 - Correct Current Value

MPAC’s Proposed Comparable Properties

9Using the direct comparison method of determining value, MPAC relied on data relating to five proposed comparable properties that had sold within one year of the Valuation Date, all of which were located less than one kilometer of the Subject Property. The Board finds these to be very similar to the Subject Property for the reasons that follow.

10MPAC’s first property was 6388 Longspur Road, which sold on September 23, 2015 for $605,000. MPAC applied an adjustment to account for the passage of time to estimate what that amount would have been on the Valuation Date, and these time adjustments were not contested at the hearing. It resulted in an adjusted sale price of $629,914. The only substantial difference between this property and the Subject Property was that it had a two-car garage, where the Subject Property only had a one-car garage.

11MPAC’s second property at 6376 Longspur Road sold on August 28, 2015 for $570,000, which was time adjusted to $600,539. This property was different from the Subject Property because it had one fewer bedrooms, but it also had one additional bathroom. Otherwise, based on the evidence before the Board, it was substantially similar to the Subject Property.

12MPAC’s third property was 6432 Warbler Lane, which sold for $697,000 on May 26, 2016. The time adjusted sale price for this property was $663,270. The only substantial difference between this property and the Subject Property was that it had a two-car garage.

13MPAC’s fourth property was 6095 Gemini Crescent, which sold on July 8, 2016 for $756,000. The time adjusted price was $704,267. Again, the only substantive difference between this property and the Subject Property was a two-car garage.

14Finally, MPAC’s fifth property was 6188 Prairie Circle, which sold on October 30, 2015 for $682,000, time adjusted to $701,828. This property was slightly larger than the Subject Property by 0.02 acres and it also had a two-car garage. In all other respects, it was substantially similar to the Subject Property.

15Ms. Janeczek-Boyle testified that she calculated the median value per square foot of the building area for these five properties to be $323.87, which she then multiplied by the square footage of the Subject Property of 2,084 square feet to determine a value of $674,000. Subtracted from this was $27,000, to address a reduction in value for foundation cracks. This, in Ms. Janeczek-Boyle’s submission, resulted in MPAC’s opinion of current value of $647,000.

Appellant’s Submissions

16The Appellant first argued that MPAC’s evidence should be disregarded since its representative at the hearing had not inspected any of MPAC’s proposed comparable properties. However, the Board finds that MPAC had other means by which it could retrieve property information, such as through municipal records and other sources. In addition, the Appellant submitted no evidence of his own to refute any of MPAC’s evidence on its proposed comparable properties.

17The Appellant also testified that the Subject Property did not have valuable upgrades that neighbouring properties had, and that his basement was not finished where basements of neighbouring properties were. He also testified that his basement had structural cracks, which MPAC’s representative testified at the hearing had resulted in a reduction of value of $27,000. The Appellant further testified that the garage at the Subject Property was a single-car garage, where neighbouring properties had double-car garages.

18The direct comparison approach considers sale prices in arm’s length transfers of similar properties taking place as close to the Valuation Date as possible to determine current value. The direct comparison approach is not, however, a general comparison with neighbouring properties, although in this case two of MPAC’s five proposed comparable properties were on the same street as the Subject Property. In addition, the Appellant did not present any evidence specific to any other properties, where such information would have been available to him using MPAC’s online resources.

19There was also no evidence before the Board to explain how MPAC determined that a $27,000 reduction in value was appropriate, nor was there any evidence to support the Appellant’s submission the reduction should have been double that.

20The Appellant also submitted that the assessed value of the Subject Property increased faster from the previous taxation cycle than the rate of inflation and faster than property values increased in other municipalities in Canada using online resources he presented at the hearing.

21Previous assessments for the Subject Property are not, however, relevant to the issue before the Board in these appeals, which is to determine the correct current value of the Subject Property as of the Valuation Date, not other dates. Similarly, general sales data for Toronto and other municipalities also carry little weight where much more specific data was presented at the hearing relating to the value of properties sold within one year of the Valuation Date in the immediate vicinity of the Subject Property.

22The Appellant further argued that his insurance company had insured the Subject Property for $465,300. Insurable value is not, however, the same as current value. The value of land alone, for example, would not have been included in that value. In addition, the replacement cost of the building at the Subject Property would not necessarily have been similar to what a purchaser would have paid for it in an arm’s length sale transaction on the Valuation Date.

Findings on Current Value

23Apart from the different garage sizes, the Board finds that all of MPAC’s comparable properties are substantially similar to the Subject Property.

24Only MPAC’s second property, 6376 Longspur Road, had a single-car garage like the one at the Subject Property. It is therefore logical that it also had the lowest adjusted sale price of $600,539, while the adjusted sales prices for the other four ranged from $629,914 for the first property to $701,828 for the fifth property.

25The Board finds the adjusted sale price of MPAC’s second property to be the best evidence of the correct current value of the Subject Property.

26Therefore, the Board finds the correct current value of the Subject Property to be $600,539, or $600,500 rounded.

Issue 2 - Equity

27Section 44(3)(b) of the Act provides that “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 assessment would result in a reduction no the assessment of the land.”

28MPAC produced an equity report that Ms. Janeczek-Boyle relied on at the hearing that determined the assessment to sale ratio (“ASR” or level of assessment (“LOA”)) was 0.95 for properties in the vicinity of the Subject Property. As a result, MPAC took the position that no adjustment in equity was required.

29The reason for MPAC’s conclusion in its report was that “the International Association of Assessing Officers (IAAO) standards states that the LOA for all property types should fall between 0.90-1.10. For the purposes of the equity test, MPAC takes the position that equity is achieved if the median ASR falls between 0.95-1.05.”

30The Appellant argued that the Board should reject MPAC’s equity analysis because the IAAO is an American source for which he could find no information. The Board disagrees that it should be rejected on that basis. This is because the Appellant presented no evidence of his own to show that there was any inequity of assessments, nor did he suggest that any alternative measure or methodology should be used.

Findings on Equity

31The only evidence before the Board was that the ASR was 0.95, and the Board has generally accepted that an ASR at that level essentially demonstrates equitable assessments.

32As a result, the Board determines that there should be no adjustment in equity.

CONCLUSION

33The correct current value of the Subject Property is $600,500.

34No equitable reduction of the current value of the Subject Property pursuant to section 44(3)(b) of the Act is required.

35MPAC has not served a notice of intention to seek a higher assessment as required by Rule 40. Therefore, the assessment of the Subject Property at $598,000 is confirmed for the 2019 and 2020 taxation years.

ORDER

36The Board orders that the assessment of 6358 Longspur Road, Mississauga is confirmed at $598,000 in the residential property class for the 2019 and 2020 taxation years.