Assessment Review Board
Commission de révision de l’évaluation foncière
ISSUE DATE: August 28, 2020
Assessed Person(s): George Edward Henry
Appellant(s): George Edward Henry
Respondent(s): Municipal Property Assessment Corporation Region 32
Respondent(s): Lakehead Locality Education
Property Location(s): 714 - 700 Road
Municipality(ies): Lakehead Locality Education
Roll Number(s): 5815-120-000-35600-0000
Appeal Number(s): 3386773 and 3411404
Taxation Year(s): 2019 and 2020
Hearing Event No.: 731472
Legislative Authority: Section 40 of the Assessment Act, R.S.O. 1990, c. A.31
APPEARANCES:
| Parties | Representative |
|---|---|
| George Henry | Self-represented |
| Municipal Property Assessment Corporation | Glenn Spiess |
| Lakehead Locality Educations | No one appeared |
HEARD: June 24, 2020 by telephone conference call
ADJUDICATOR(S): Jennifer Griffith, Member
DECISION
OVERVIEW
1George Edward Henry is the owner of 714 - 700 Road (the “Subject Property”) in the Lakehead Locality Education (the “Municipality”) and he represented himself (the “Appellant”) at the hearing. The Appellant filed an appeal for the 2019 taxation year with the Assessment Review Board (the “Board”), pursuant to s. 40 of the Assessment Act, R.S.O. 1990, c. A.31 (the “Act”). Pursuant to s. 40(26), the Appellant is deemed to have brought the same appeal in respect of the 2020 taxation year.
2It is the Appellant’s position that the Municipal Property Assessment Corporation’s (“MPAC”) current value assessments of $651,000 for the 2019 taxation year, and $578,000 for the 2020 taxation year, are too high and that the correct current value should be $250,000. MPAC takes the position that the correct current value is $578,000.
3Pursuant to s. 44(3)(b) of the Act, MPAC takes the position that an equitable reduction of the current value is not required. The Appellant asserts that an equity reduction is not required and is satisfied that the sales presented by both MPAC and himself with an Assessment to Sales Ratio of 0.999 (“ASR”) demonstrate that the sale prices of the 30 properties used in the Equity Report are almost identical to their respective assessed values. Therefore, equity is not at issue.
4Pursuant to s. 40(11) of the Act, the Municipality is a party to this proceeding; however, no one appeared on behalf of the Municipality.
Issues for the Hearing
5At issue in this proceeding is:
- A determination of the current value of the Subject Property for the 2019 and 2020 taxation years;
a. Direct Comparison Approach based on sales;
b. Negative Impacts on Value of Subject Property.
Result
6The Board finds the correct current value of the Subject Property is $594,000 for the 2019 and 2020 taxation years for the reasons set out below.
7Pursuant to s. 44(3)(b) of the Act, the Board finds that an equity reduction is not required.
8The Board reduces the returned assessment from $651,000 to $594,000 for the 2019 taxation year; and confirms the returned assessment of $578,000 for the 2020 taxation year.
PRELIMINARY MATTERS – ADJOURNMENT REQUEST
9At the commencement of the hearing Glenn Spiess, representative for MPAC, moved for an adjournment of the day’s hearing to conduct an inspection of the Subject Property. Mr. Spiess states that a second adjournment for extra time to conduct an inspection of the Subject Property was requested the day before this hearing on June 23, 2020, through an Expedited Board Direction and was denied by the Board due to the untimeliness of the request pursuant to Rule 84(e), which states that the Board must consider “the timeliness of the request for the adjournment”.
10Mr. Spiess confirms that the Board had previously granted an adjournment, on April 16, 2020, for a hearing that was scheduled on April 21, 2020 due to COVID–19 to allow the parties time to address issues affecting the assessed value, including an inspection. Mr. Spiess states that the inspection was not done because the Appellant lives far away in southern Ontario and was unable to meet with MPAC.
11Dave Zabloski, Valuation Manager, MPAC, was a witness and he states that province wide inspection of properties was suspended as of March 13, 2020 due to COVID-19 and that exterior inspections will be resumed as of July 6, 2020. In this regard, Mr. Spiess states that he was not aware that MPAC had suspended property inspections on March 13, 2020, when the first request for an adjournment was approved.
12Mr. Spiess also confirms that Ed Molcan, a former Property Valuation Specialist with MPAC, inspected the Subject Property on July 26, 2018. . However, Mr. Spiess states that he could not confirm what process (telephone inquiry; full inspection interior and exterior; or exterior inspection) was used for the inspection.
13The Appellant confirms that Mr. Molcan for MPAC conducted an exterior inspection and provided him with the findings (data and photographs). Based on the information provided, the Appellant states that he has no issues concerning the data and photographs provided by Mr. Molcan.
14Regarding today’s request for an adjournment for an inspection, the Appellant is of the view that another inspection will not change anything, unless MPAC needs interior measurements for its model.
15In reviewing the submissions, the Board is not satisfied that MPAC’s explanation for a second adjournment request today is reasonable and timely. The Board finds the following:
I. that the parties failed to carry out an inspection when they were already granted one on April 16, 2020, to address issues concerning the assessed value, including an inspection;
II. that MPAC is very untimely in requesting a second adjournment on the day of the hearing, pursuant to Rule 84(e) which states that the Board must consider “the timeliness of the request for the adjournment”;
III. that an inspection of the Subject Property had taken place in 2018, and the Appellant has confirmed that he has no issues with the findings and data from it; and does not believe that the findings and data would change with another inspection . The Board agrees with the Appellant because MPAC has stated that as of July 6, 2020 exterior inspections will be resumed, which is the same exterior inspection done in 2018; and
IV. that the Board had considered and denied the same request on June 23 (one day before today’s hearing), due to the untimeliness of the request pursuant to Rule 84(e), which states that the Board must consider “the timeliness of the request for the adjournment”. Requesting an adjournment at today’s hearing is even more untimely.
16Based on the submissions and for the reasons stated, the Board denies the request.
ANALYSIS
Description of Subject Property
17The Subject Property is a two-storey residential dwelling. The Property Code is 391 Seasonal / Recreational Dwelling – First Tier on Water, with an effective site area of 0.34 acres, a total building area of 2,118 square feet, with a quality of construction rating of 6 and built in 2015.
Issue 1 - A determination of the current value of the Subject Property for the 2019 and 2020 taxation years
Issue 1a – Direct Comparison Approach based on sales
18In determining the correct current value, the Board references s. 19(1) of the Act, which states that the assessment of land shall be based on its current value, which is defined 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”. In other words, what is the current value in an arm’s length and market-tested sale of the property on the valuation date or close to it. The valuation date for the 2017 to 2020 taxation years is January 1, 2016.
19Reviewing the following evidence presented in support of current value, the Board finds the best evidence are four sales presented by MPAC and one sale presented by the Appellant. These sales are located at: 11 Mountain Bay Drive; Roll number ending 02800 (no address listed); 2063 Sunnyside Beach Avenue; 627 Grann Drive; and one sale by the Appellant at 904 Road 900. These five properties were sold in 2015 and 2016, with a time-adjusted sale price of $594,000. The Board finds the time-adjusted sale price of $594,000 represents the best evidence of arm’s length transaction between a willing buyer and a willing seller pursuant to s. 19(1).
MPAC’s Proposed Comparable Properties
20Mr. Spiess, a representative for MPAC presented a Valuation Report, dated November 29, 2019 and testified to the information it contained. The report was prepared by Ed Molcan, a former Property Valuation Specialist who had inspected the Subject Property in 2018.
21In support of current value, MPAC presents the following six proposed comparable properties, which sold over the period 2013 and 2016. MPAC provides both the actual and time-adjusted sale prices and relies on the Direct Comparison Approach. This approach estimates the current value of the Subject Property by adjusting the sale price of other sold properties for differences in property characteristics between the Subject Property and other sold properties. The following is the analysis of these six sales of proposed comparable properties:
MPAC’s Sales Analysis
| 6 PROPOSED COMPARABLE PROPERTIES | FRONTAGE (ft.) | LOT SIZE (acres) | TOTAL BUILDING AREA PER SQUARE FOOT (“sq. ft.”) | YEAR BUILT | SALE DATE | SALE PRICE | TIME ADJUSTED SALE PRICE (“TAS”) | TAS PRICE PER sq. ft. (building area) |
|---|---|---|---|---|---|---|---|---|
| 11 Mountain Bay Drive | 124.67 | 1.03 | 1,107 | 1997 | 2015 | $340,000 | $337,000 | $304.42 |
| Roll Number ending 02800 | 158.43 | 1.15 | 960 | 1998 | 2016 | $245,000 | $250,314 | $260.74 |
| 2063 Sunnyside Beach Avenue | 75 | 0.36 | 2,196 | 1988 | 2015 | $600.000 | $594,705 | $270.81 |
| 965 Superior Shores Road | 145 | 1.16 | 1,003 | 1995 | 2014 | $270,000 | $272,571 | $271.75 |
| 627 Grann Drive | 133 | 2.17 | 1,071 | 1997 | 2013 | $359,000 | $373,679 | $348.90 |
| 627 Grann Drive | 133 | 2.17 | 1,071 | 1997 | 2015 | $385,000 | $383,634 | $358.20 |
| Average | 128.18 | 1.34 | 1,235 | 1995 | 2014 | $366,500 | $368,650 | $302.47 |
| Subject Property 714 700 Road | 140 | 0.34 | 2,118 | 2015 | nil | nil | Assessed Value $651,000 or $307.36 per sq. ft. for 2019 and at $578,000 or $272.90 per sq. ft. for 2020 | nil |
22Based on the sale at 2063 Sunnyside Beach Avenue, MPAC takes the position that this is the most comparable property in terms of land, structure and quality of construction to the Subject Property. When this comparable property is adjusted for differences to the Subject Property, it results in a current value of $578,000. However, no details of the adjustments were provided.
Issue 1b – Negative Impacts on Value of the Subject Property
23MPAC testifies that there were no sales of similar properties in the homogeneous neighbourhood of the Subject Property. As a result, the search for sales was extended to the wider vicinity that ranged in distance from 26 to 109 kilometres from the Subject Property. MPAC submits that the Subject Property receives no negative adjustment for nuisances (rocky beach, dusty road, no privacy, no municipal services etc.), because there are no sales in the homogeneous neighbourhood of the Subject Property to show that a negative adjustment is warranted.
Appellant’s Proposed Comparable Property
24In support of current value, the Appellant presents one proposed comparable property which sold in the same homogeneous neighbourhood as the Subject Property. This proposed comparable property is located at 904 Road 900, sold in 2016 for $280,000. The Appellant relies on the actual sale price as opposed to the time-adjusted sale price and the following is an analysis of the sale as compared to the Subject Property:
Appellant’s Sales Analysis
| 1 PROPOSED COMPARABLE PROPERTIES | FRONTAGE (ft.) | LOT SIZE (acres) | TOTAL BUILDING AREA PER SQUARE FOOT (“sq. ft.”) | YEAR BUILT | SALE PRICE | SALE DATE | TAS ** SALE PRICE | TAS SALE PRICE PER sq. ft. (building area) |
|---|---|---|---|---|---|---|---|---|
| 904 Road 900 | 100 | 0.37 | 1,271 | 1993 | $280,000 | 2016 | $282,817 | $222.51 |
| Subject Property 714 700 Road | 140 | 0.34 | 2,118 | 2015 | Assessed Value $651,000 (for 2019) and $578,000 (for 2020) | nil | nil | Assessed Value ($307.36 per sq. ft. for 2019) and ($272.90 per sq. ft. for 2020) |
** TAS is provided in MPAC’s Equity Report
25Based on the above sale analysis, the Appellant testifies that this is the only sale which occurred in the Subject Property’s neighbourhood and believes that this is the best evidence of current value. Therefore, the Appellant takes the position that the value should be $280,000.
Issue 1b - Negative Impacts on Value of the Subject Property
26The Appellant submits the Subject Property is negatively impacted because it has no municipal services, no privacy, the road is dusty, the cove is rocky and not suitable for swimming, whereas, the proposed comparable properties presented by MPAC are located in the prestigious area of Amethyst Harbour, with year-round access, sandy beach, good privacy, fully serviced and developed infrastructure (stores, businesses etc.). Based on these comparisons, the Appellant is of the view that the Subject Property should be receiving a negative adjustment.
27Based on the above evidence, the Appellant is of the view that when the above sale price of $280,000 is adjusted for nuisances the correct current value should be $250,000.
Findings on Current Value
28The Board finds the best evidence of current value is the four sales presented by MPAC at 11 Mountain Bay Drive; Roll number ending 02800; 2063 Sunnyside Beach Avenue; 627 Grann Drive; and one sale by the Appellant at 904 Road 900 which sold in 2015 and 2016.
29These five sales have time adjusted sale prices ranging from $250,314 to $594,705; frontages from 75 to 158.43 feet; lot sizes from 0.36 to 2.17 acres; total building areas from 960 to 2,196 sq. ft.; year built 1988 to 1998; and located within 26 to 109 kilometres from the Subject Property). Compared to the Subject Property with a frontage of 140 feet; lot size of 0.34 acres, total building area of 2,118 sq. ft. and built in 2015.
30Based on this sales analysis, the Board finds that the characteristics of Subject Property falls on the upper end of the range in frontage, total building area, is significantly newer built in 2015 and would sell at the higher end of the range for $594,000 (rounded).
31MPAC’s remaining two sales at 965 Superior Shores Road, sold in 2014, and 627 Grann Drive, sold in 2013, were excluded because the Board finds that these two sales were too far removed from the valuation date of January 1, 2016 to provide any meaningful test of current value.
32The Board also finds that the Appellant adduced no quantitative evidence in support of a negative adjustment for nuisances (no municipal services, no privacy, dusty road, rocky cove not suitable for swimming). MPAC testifies that the Subject property is assessed as not having municipal services and that there is no market evidence to support an adjustment for nuisances. Therefore, the Board puts no weight on the issue of nuisances, because there is no quantitative evidence before it to support an adjustment.
CONCLUSION
33The Board finds the correct current value of the Subject Property is $594,000 for the 2019 and 2020 taxation years. The Board also finds that an equity reduction is not required pursuant to s. 44(3)(b).
ORDER
34The Board orders that the assessment is reduced from $651,000 to $594,000 for the 2019 taxation year; and confirms the returned assessment of $578,000 for the 2020 taxation year.
"Jennifer Griffith"
JENNIFER GRIFFITH MEMBER
Assessment Review Board A constituent tribunal of Tribunals Ontario Website: www.arb.gov.on.ca Telephone: 416-212-6349 Toll Free: 1-866-448-2248```