Assessment Review Board

Issue Date: April 28, 2021

File No.: WR 169942

Assessed Person(s): Krystian Formella; Magang Sule

Appellant(s): Krystian Formella; Magang Sule

Respondent(s): Municipal Property Assessment Corporation Region 20

Respondent(s): City of Brantford

Property Location(s): 41 Garden Avenue, Unit 13

Municipality(ies): City of Brantford

Roll Number(s): 2906-040-015-38113-0000

Appeal Number(s): 3432464, 3339555, 3364290, 3408817 and 3447416

Taxation Year(s): 2017, 2018, 2019, 2020 and 2021

Hearing Event No.: 741170

Legislative Authority: Sections 33 and 40 of the Assessment Act, R.S.O. 1990, c. A.31

Appearances

Parties	Representative
Krystian Formella and Magang Sule	Krystian Formella
Municipal Property Assessment Corporation	David Taylor
City of Brantford	No one appeared

Heard: April 1, 2021 by telephone conference call

Adjudicator(s): Joanne Laws, Member

Decision

Overview

1These are assessment appeals for a residential townhouse, Unit 13 - 41 Garden Avenue (the "Subject Property") in the City of Brantford for the 2017 to 2021 taxation years. The initial appeal was made pursuant to s. 33 of the Assessment Act, R.S.O. 1990, c. A.31 (the "Act") for the 2018 taxation year. Pursuant to s.40(26) of the Act, the Appellants are deemed to have brought appeals, pursuant to s.40 of the Act for 2019 through 2021.

2Krystian Formella represented himself and Magang Sule at the hearing. The Municipal Property Assessment Corporation ("MPAC") was represented by David Taylor.

3The Appellants purchased the newly built Subject Property from the builder on November 14, 2017 for $330,618. Before the Board there are two omitted assessments pursuant to s.33 of the Act which I will address in chronological order. The November 14, 2017 omitted assessment has a value of $301,526 in the residential property class and was deemed by the Board. The second is effective January 1, 2018 for $214,000. MPAC testified it is unaware of an omitted assessment notice effective November 14, 2017 or why this appeal appeared on the Board's docket. Both parties agreed that the only omitted assessment appeal has an effective date of January 1, 2018 with a value of $214,000. Accordingly, I dismiss the s.33 appeal, effective November 14, 2017 with a value of $301,526.

4MPAC explained that a January 1, 2018 omitted assessment notice was issued because the annual assessment of $100,000 in the vacant land property class was returned before MPAC captured the newly built residence. MPAC's omitted assessment of $214,000 reflects the change from $100,000 in the vacant land property class to $314,000 in the residential property class.

5Pursuant to s.40(11) of the Act, the Municipality is a party to this proceeding. However, no one appeared on its behalf.

Issues for the Hearing

6At issue in this proceeding:

1. What is the current value of the Subject Property?
2. Is a reduction required to make it equitable with that of similar lands in the vicinity?
3. What is the correct omitted assessment for the 2018 taxation year?

Result

7The omitted assessment appeal effective November 14, 2017 is dismissed.

8The current value is $314,000 for the 2018, 2019, 2020 and 2021 taxation years in the residential property class.

9Pursuant to s.44(3)(b) of the Act, the assessed value of $314,000 is reduced to $295,000.

10The 2018 s.33 omitted assessment is reduced from $214,000 to $195,000 by subtracting $19,000 (the returned assessed value of $314,000 less the equitable current value of $295,000) from the omitted assessment notice of $214,000.

Analysis

Description of Subject Property

11The Subject Property is a single-storey freehold condominium townhouse built in 2017. The residence is 1,125 square feet in size with a basement walkout. The lot size is 0.06 acres and abuts greenspace. I find it reasonable to accept MPAC's argument that a walkout basement and abutting greenspace are desirable and, therefore, are superior characteristics.

Issue 1 - What is the Correct Current Value?

12Section 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." The valuation day for the 2018 through 2021 taxation years is January 1, 2016.

13MPAC has returned an assessment of $314,000 for the 2018 through 2021 taxation years. At the hearing, MPAC took the position that the market value of the Subject Property is $326,000 based on the direct comparison approach to value. In support of this higher value, MPAC submitted eight sale properties which it considered comparable to the Subject Property. Because none of the sales occurred on the January 1, 2016 valuation day, MPAC also submitted a time adjustment analysis ranging between January 2015 and December 2016 in order to estimate those properties' sale values as of the valuation day. MPAC confirmed that all are arm's length sales, that none are builder's sales.

14MPAC also argued that the current value, using the cost approach to value would be $330,616, as reflected in the builder's sale. This value was submitted to support a higher current value as noted in paragraph 13. However, MPAC was not relying on this evidence, taking the position that a builder's sale does not fall within the Act's definition of current value.

15The Appellant presented numerous real estate listings, but stated he was relying on only the first ten properties.

Findings on Current Value

16On reviewing MPAC's eight sale properties, I agree that they are all similar to the Subject Property in building and lot sizes, and all are single-storey, single-family homes.

17Six of the eight sales occurred within a year of the valuation day and within MPAC's time adjustment analysis range of January 2015 to December 2016. The first two of the sale properties, Unit 2 - 41 Garden Avenue and Unit 7 - 41 Garden Avenue sold in 2019. Because the time adjustment factors for sales in 2019 were not provided, I will not consider either in my analysis. Further, had the time adjustment factors been provided for 2019, I would give them no weight because the sales are too far from the valuation day to provide a reasonably accurate value as of January 1, 2016.

18Sale 3, 72 Rowanwood Avenue has a similar lot size (0.07 acres) and a similar building size (1,053 sq. ft.). It is older (2009), it does not have a basement walkout, nor does it abut greenspace. It is superior in that the basement is partially finished. On balance, I find that this property is inferior to the Subject Property. It sold in April 2016 for $289,900 and MPAC's time adjusted sale value is $279,366. Based on the above, I find that the Subject Property's current value is likely higher than $279,366.

19Sale 4, 590 Grey Street has a similar lot size (0.05 acres). It is inferior in building size (905 sq. ft.), age (2005), the basement is not a walkout, and it does not abut greenspace. It is superior in that the basement is partially finished. On balance, I find that this property is inferior to the Subject Property. It sold in August 2015 for $277,000 and MPAC's time adjusted sale value is $286,391. Based on the above, I find that the Subject Property's current value is likely higher than $286,391.

20Sale 5, 576 Grey Street has a similar lot size (0.05 acres). It is inferior in building size (905 sq. ft.), age (2006), it does not have a basement walkout, nor does it abut greenspace. It is superior in that the basement is partially finished. On balance, I find that this property is inferior to the Subject Property. It sold in June 2016 for $277,900 and MPAC's time adjusted sale value is $258,357. Based on the above, I find that the Subject Property's current value is likely higher than $258,357.

21Sale 6, 24 Steed Court, has a similar sized lot (0.07 acres). It is inferior in building size (910 sq. ft.), age (2008), it does not have a basement walkout, nor does it abut greenspace. It is superior in that the basement is partially finished. On balance, I find that this property is inferior to the Subject Property. It sold in June 2016 for $282,900 and MPAC's time adjusted sale value is $262,994. Based on the above, I find that the Subject Property's current value is likely higher than $262,994.

22Sale 7, 14 Steed Court, has a slightly larger lot (0.08 acres). It is inferior in building size (910 sq. ft.), age (2008), it does not have a basement walkout, nor does it abut greenspace. It is superior in that the basement is partially finished. On balance, I find that this property is inferior to the Subject Property. It sold in April 2016 for $265,000 and MPAC's time adjusted sale value is $255,370. Based on the above, I find that the Subject Property's current value is likely higher than $255,370.

23Sale 8, 2 Steed Court, has a slightly larger lot (0.11 acres). It is inferior in building size (929 sq. ft.), age (2009), it does not have a basement walkout, nor does it abut greenspace. It is superior in that the basement is partially finished. The Appellant argues that it is superior because it is an end unit. On balance, I find that this property is inferior to the Subject Property. It sold in February 2016 for $271,100 and MPAC's time adjusted sale value is $267,708. Based on the above, I find that the Subject Property's current value is likely higher than $267,708.

24Reviewing the Appellant's first ten properties, two had sales occurring within a year of the valuation day. They are similar to the Subject Property in that they are both single-storey freehold townhomes.

25The first, 553 Grey Street has a similar sized lot (0.05 acres). The total building size was not provided but it is older than the Subject Property being 6 to 15 years old at the time it sold in September 2016. There is no indication that it has a basement walkout or that it abuts greenspace. However, the basement is finished. On balance, I find that this property is inferior to the Subject Property. It sold in September 2016 for $329,900. Using MPAC's time adjustment factors, the estimated sale value as of the valuation day is at or below $305,158. Based on the above, I find that the Subject Property's current value is likely higher than $305,158.

26The Appellants' second sale property, 58 Garden Avenue, is located across the street from the Subject Property. It has a similar sized lot (0.05 acres). The total building size was not provided but it is older being 6 to 15 years old at the time it sold in 2016. There is no indication that it has a basement walkout or that it abuts greenspace. However, the basement is finished. On balance, I find that this property is inferior to the Subject Property. It sold in November 2016 for $289,900. Using MPAC's time adjustment factors, the estimated sale value as of the valuation day is $263,519. Based on the above, I find that the Subject Property's current value is likely higher than $263,519.

27The highest time adjusted sale price of these eight inferior properties is $305,158. This analysis does not point to an exact current value but does support MPAC's assessed value of $314,000. Accordingly, I find that the current value of the Subject Property is $314,000.

Issue 2 - Is a Reduction of the Assessment Required to Make it Equitable with that of Similar Lands in the Vicinity?

28Section 44(3)(b) of the Act directs that after determining the current value, 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 adjustment would result in a reduction of the assessment of land".

29The Appellant's evidence and arguments were focused on the equitable value of the Subject Property in relation to the taxes paid for other properties in the vicinity. Mr. Formella submitted into evidence numerous real estate listings which identified the taxes levied arguing that the property taxes for similar properties should be the same and that property taxes for superior properties should be higher.

30This type of analysis is problematic. While taxes likely reflect assessed values, I received no evidence to make a correlation between the taxes levied and the assessed value of these properties. The amount of taxes paid does not meet the test of s.44(3)(b) which provides that the Board shall "have reference to the value at which similar lands in the vicinity are assessed". I note that some of the listings also included assessment remarks, but, again, it is unclear whether this information accurately reflects the assessed values as of the January 1, 2016 valuation day.

31MPAC presented an Equity Analysis Report, comparing the assessment and sale values of 32 freehold townhouses. MPAC's evidence is that the range of dates used to identify the sale properties was January 2, 2015 to November 25, 2016. The resulting median assessment to sale ratio for the 32 sales was 0.969. MPAC took the position that this value indicates the Subject Property is equitably assessed because it falls within MPAC's target range of 0.95 and 1.05. Based on this data, MPAC argued that a reduction of the assessed value is not required.

32In addition to its Equity Analysis Report, MPAC presented an assessment to sale ratio analysis of eight sales of similar properties. Mr. Taylor argued these eight properties are more reliable because they are directly similar to the Subject Property: they are single-storey freehold townhouses, located 0.06 to 1.10 kilometres from the Subject Property, and the building sizes range from 905 sq. ft. to 1,125 sq. ft. He noted that all eight sale properties are superior to the Subject Property in that they have partially finished basements but are inferior to the Subject Property because none have basement walkouts. The resulting median assessment to sale ratio of the eight sale properties is 0.95.

Findings on Whether an Equitable Reduction is Required

33In Municipal Property Assessment Corporation v Loblaw Properties Limited, 2017 ONSC 1299, the Divisional Court contemplated the meaning of 'similar lands' in relation to clause 44(3)(b) of the Act. Referencing Trizec Equities Ltd v Ontario (Regional Assessment Commissioner, Region No 27), [1988] OJ No 182, 27 OAC 203, 37 MPLR 175, 8 ACWS (3d) 399 (Div. Ct.) ("Trizec") it found, at paragraph 25, that "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."

34The most reliable evidence I received are MPAC's two assessment to sale ratio analyses.

35The first references 32 properties that are similar to the Subject Property in use and location. The second references eight properties that are similar to the Subject Property on a number of points of comparison: number of storeys, use, location, building sizes and lot sizes. I find that the smaller sample is preferred because there are more points of comparison (see Trizec) and that the points of comparison show they are all very similar to the Subject Property.

36MPAC utilized a median assessment to sale ratio which is appropriate where there is a large sample size. This is not the case here. With a sample size of eight, a mean is more appropriate. The mean is 0.94. Applying this value to the determined current value assessment of $314,000 results in a value of $295,160 ($295,000 rounded). This is the equitable value of the Subject Property.

Issue 3 - What is the correct omitted assessment for the 2018 taxation year?

37The 2018 s.33 omitted assessment is reduced from $214,000 to $195,000 by subtracting $19,000 (the returned assessed value of $314,000 less the equitable current value of $295,000) from the omitted assessment notice of $214,000.

Conclusion

38The Subject Property's current value is $314,000 as of the January 1, 2016 valuation day.

39I find that, pursuant to s.44(3)(b) the assessment is reduced to $295,000 to make it equitable with similar lands in the vicinity.

40The s. 33 omitted assessment effective January 1, 2018 is reduced from $214,000 to $195,000.

Order

41The Board orders that:

1. The Board's deemed appeal effective November 14, 2017 is dismissed.
2. The current value for the 2018, 2019, 2020 and 2021 taxation years is $314,000.
3. The assessment is reduced from $314,000 to $295,000 for the 2019, 2020 and 2021 taxation years.
4. The omitted assessment effective January 1, 2018 is reduced from $214,000 to $195,000.