Tyler Walker v. Municipal Property Assessment Corporation, Region 31, 2020 CanLII 89074

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: November 09, 2020

FILE NO.: WR 166843

Assessed Person(s): Tyler James Walker

Appellant(s): Tyler Walker

Respondent(s): Municipal Property Assessment Corporation, Region 31

Respondent(s): City of Sault Ste. Marie

Property Location(s): 535 Charles Street

Municipality(ies): City of Sault Ste. Marie

Roll Number(s): 5761-040-007-04500-0000

Appeal Number(s): 3411254 and 3392957

Taxation Year(s): 2019 and 2020

Hearing Event No.: 736017

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

APPEARANCES:

Parties

Representative

Tyler James Walker

Self-represented

Municipal Property Assessment Corporation

Ron Marshall

City of Sault Ste. Marie

No one appeared

HEARD: October 27, 2020 by telephone conference call

ADJUDICATOR(S): Joanne Laws, Member

DECISION

OVERVIEW

1Tyler Walker (the “Appellant”) is the owner of the Subject Property, located at 535 Charles Street, Sault Ste. Marie. It was assessed by the Municipal Property Assessment Corporation (“MPAC”) for $134,000 in the Residential Property Class for the 2019 and 2020 taxation years.

2MPAC takes the position that the returned assessment is the correct current value and that no adjustment for equity is required.

3It is the Appellant’s position that the correct current and equitable value is $83,000.

4Pursuant to s. 40(11) of the Act, the City of Sault Ste. Marie is a party to this proceeding. However, no one appeared on its behalf.

Issues for the Hearing

5At issue in this proceeding is:

1. A determination of the current value of the subject property for the 2019 and 2020 taxation years;

2. Whether an equity reduction in the current value should be made?

Result

6I find that the current value of the Subject Property is $134,000 in the Residential Property Class.

7No adjustment for equity is required.

ANALYSIS

Description of Subject Property

8The Subject property is a single storey, single-family detached residence situated in Sault Ste. Marie’s west end, the Steelton area. The lot site is 0.11 acres with a frontage of 40 feet. The residence was built in 1948 and is 1,046 sq. ft. in size. Due to exterior renovations including new windows, siding and doors, which occurred in 2009, MPAC allocated an effective year built of 1960. The residence has one bathroom and an unfinished basement. MPAC has allocated a quality of construction of 5.5 out of 10.

9The Subject Property is rented, not owner occupied.

Issue 1 – What is the Current Value?

10Section 19(1) of the Act provides that the assessment of land shall be based on its current value. Section 1 of the Act defines current value 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.” Section 19.2 provides that for 2019 and 2020 taxation years the valuation day is January 1, 2016.

11There are a number of methods that can be used to determine a property’s current value. One is where the Subject Property sold in the open market on or near the valuation day.

12The Appellant purchased the Subject Property for $58,750 in June 2018 through a Transfer Under Power of Sale in June 2018. A Power of Sale is where a lender sells a property when the property owner has defaulted on a payment. I am not satisfied that this transaction meets the legislated test of determining current value. As such, I give it no weight.

13Another method of determining current value is to consider sales of similar properties located near the Subject Property.

14MPAC presented six sales (see attached Appendix A) which occurred in 2015 and 2016, the ‘shoulder years’ of the January 1, 2016 valuation day. All are located less than one kilometre from the Subject Property and are single storey, detached residences with similar lot sizes. They are inferior in terms of building sizes, ranging between 732 sq. ft. to 907 sq. ft. However, their sizes are off-set by superior characteristics such as finished basements, garages and number of bathrooms. MPAC has allocated qualities of construction between 5.0 and 5.5 out of 10.

15The time adjusted sale prices range from $121,000 to $152,000. The Subject Property’s assessment of $134,000 falls a little below the middle of this range. I find that the sale values support MPAC’s position that the Subject Property is assessed at its current value.

16The Appellant relied on an appraisal of the Subject Property, obtained for the purpose of a mortgage. The Appellant did not submit a copy of the appraisal but submitted an email from Sherri McTavish, Senior Mortgage Specialist, RBC Royal Bank confirming the appraised value of $83,000 as of September 2018. I allocate no weight to the email. The appraisal itself was not submitted into evidence and neither the appraiser nor Ms. McTavish were called as witnesses.

17Because the Subject Property is rented the Appellant presented an Income Approach to Value analysis in which he calculated a current value of $74,250. The Income Approach to Value is used to estimate a property’s value by estimating the present worth of future benefits based upon its earning power. In his analysis, the Appellant applied 50% for expenses and an 8% capitalization rate to the actual rent but provided no documentary evidence to support these values including whether the actual rent is lower than the possible fair market rent. Based on the above, I am unable to rely on the Appellant’s estimate of value using the Income Approach.

Findings on Issue 1 – Current Value

18The best evidence of current value is the sales evidence presented by MPAC. Accordingly, I find that the Subject Property’s Current Value is $134,000.

Issue 2 - Is an Equity Adjustment Required?

19The Act provides that I must also consider whether the Subject Property’s current value is equitable by referencing the value at which similar lands in the vicinity are assessed. Such an analysis can be performed by different methods.

20Mr. Walker presented real estate listings for six single family detached homes with property assessments ranging from $71,000 to $90,250.

Address	Description	Assessment
Subject Property	1 storey	$134,000
529 Charles Street	Rental Property 1.5 storey, “as is”	$71,000
357 Wilson Street	Rental property, 1 storey “as is”	$80,000
36 St. Georges Avenue	2 storeys	$87,000
88 Adelaide Street	1.5 storey “in need of attention and is priced accordingly”. The listing price is $69,900	$83,500
11 Wilding Avenue	1.5 storey “TLC needed… being sold as is & where is with no representations or warrantees”	$78,000
55 Second Line West	1.5 storey “being sold as is”	$90,250

21The Appellant argued that rental properties are not maintained as well as owner-occupied properties and, therefore, they have lower values and are better indications of the Subject Property’s equitable assessment. While this argument is compelling, only two of the six properties submitted by the Appellant is described as a rental property.

22In support of his position that the Subject Property is inequitably assessed, the Appellant noted that his next-door neighbour at 529 Charles Street (see table above) is assessed at $71,000 and is a rental property. He submits that the residence is smaller but is balanced by a detached garage and, therefore, it is reasonably comparable.

23When considering only the assessments of other properties (rather than an assessment to sale analysis) to determine whether the Subject Property is equitably assessed, those other properties must be directly comparable to the Subject Property. I do not consider a singe storey property to be comparable to a 1.5 or 2 storey property and I was not provided with the exact lot sizes and the size and age of the buildings. Without additional data, I cannot make a finding that the Subject Property is inequitably assessed.

24The most common method of determining whether an equitable reduction is required is by comparing assessments to sales of similar properties, known as an Assessment to Sale Ratio (“ASR”).

25MPAC provided an equity analysis using the ASR method. The properties used are similar in that they are residential, located within 1.5 kilometres of the Subject Property and all of the sales occurred close to the January 1, 2016 valuation day. The resulting median ASR is 0.955 with a coefficient of dispersion of 11.3. MPAC takes the position that a median ASR falling between 0.95 and 1.05 and a coefficient of dispersion not more than 15 for residential properties indicate that equity is achieved.

Findings on Issue 2 - Equity

26The best evidence is MPAC’s equity analysis because the points of comparison in the ASR data are sufficient and the sample size is large enough to determine a trend. I find that, in this instance, a median ASR of 0.955 with a 11.3 co-efficient of dispersion, supports a finding that an equity adjustment is not required.

CONCLUSION

27I find that the current value of the Subject Property is $134,000 in the Residential Property Class. I also find that no adjustment for equity is required.

ORDER

28The Board orders that the assessment of $134,000 is confirmed for the 2019 and 2020 taxation years.