Tribunals Ontario / Tribunaux décisionnels Ontario
Assessment Review Board / Commission de révision de l’évaluation foncière
ISSUE DATE: May 05, 2021
FILE NO.: WR 170243
Assessed Person(s): Marie Fanny Mujahid and Lisa Anne Sizeland
Appellant(s): Marie Fanny Mujahid and Lisa Anne Sizeland
Respondent(s): Municipal Property Assessment Corporation Region 02
Respondent(s): City of Brockville
Property Location(s): 11 Clarissa Street
Municipality(ies): City of Brockville
Roll Number(s): 0802-030-065-29200-0000
Appeal Number(s): 3384561, 3395928 and 3438938
Taxation Year(s): 2019, 2020 and 2021
Hearing Event No.: 742976
Legislative Authority: Section 40 of the Assessment Act, R.S.O. 1990, c. A.31
APPEARANCES:
| Parties | Representative |
|---|---|
| Marie Fanny Mujahid and Lisa Anne Sizeland | Self-represented |
| Municipal Property Assessment Corporation | Lincoln Pearce |
| City of Brockville | No one appeared |
HEARD: March 19, 2021 by video conference
ADJUDICATOR(S): Subuola Awoleri, Member
DECISION
OVERVIEW
1Lisa Anne Sizeland and Marie Fanny Mujahid, (the “Appellants”), owners of 11 Clarissa Street (the “Subject Property”), appealed the 2019 assessment of the Subject Property to the Assessment Review Board (the “Board”) under s. 40 of the Assessment Act, R.S.O. 1990, c. A.31 (the “Act”) on the ground that the assessment is too high.
2The Appellants argued that the current value of the Subject Property should be between $180,000 - $220,000. The Appellants are deemed to have brought the same appeal in respect of the 2020 and 2021 taxation years, pursuant to s. 40(26) of the Act.
3The Subject Property was assessed by the Municipal Property Assessment Corporation (“MPAC”) at $341,000 for the 2019 taxation year. After MPAC conducted an on-site inspection of the Subject Property, MPAC reduced the current value assessment (“CVA”) to $277,000 for the 2020 taxation year. MPAC requested that the Board confirms the CVA at $277,000 for only the 2019 taxation year and the current value should be increased to approximately $300,000 for the 2020 taxation year due to the repairs that was completed on the Subject Property at the end of the 2019 taxation year.
4At the completion of the hearing, the Board reserved its decision.
Issues for the Hearing
5The issues to be determined are:
- What is the correct current value of the Subject Property for the 2019, 2020 and 2021 taxation years?
- Whether there should be an equitable reduction of the current value pursuant to s. 44(3)(b) of the Act, and, if so, what the amount of this reduction should be?
Result
6The Board determines the current value of the Subject Property for the 2019 taxation year to be $213,000 and $277,000 as returned for the 2020 and 2021 taxation years.
7The Board finds that there is no evidence to support a conclusion that the Subject Property requires a reduction in its determined current value in order to make it equitable with the assessment of similar properties in the vicinity.
8Accordingly, the Board reduces the assessment of the Subject Property from $341,000 to $213,000 (rounded) for the 2019 taxation year and confirms the assessment as returned at $277,000 for the 2020 and 2021 taxation years.
ANALYSIS
Description of the Subject Property
9The Subject Property is a two-storey residential dwelling built in 1900 located in the City of Brockville. It has a standard residential lot with a historic residence and a detached garage. It has 60 feet (“ft”) of actual frontage and 132 ft of actual depth for an actual site area of 0.18 acres. It has a total building area of 2,541 square feet (“sq. ft.”), with construction quality of 7.0. It abuts a multi-residential and a commercial building.
Issue 1 - What is the correct current value of the Subject Property for the 2019 2020 and 2021 taxation years?
10In accordance with s. 44(3)(a) of the Act, the first mandate of the Board is to determine “the current value of the land”. 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”. That is, for the 2019, 2020 and 2021 taxation years, the Board must determine what the Subject Property would have sold for in an arm’s length transaction on the January 1, 2016 valuation day set by the Act.
11The best evidence the Board can receive of current value is an arm’s length and market-tested sale of the Subject Property on the valuation date or close to it or arm’s length and market-tested sales of comparable properties located nearby, as close as possible to the legislated valuation date of January 1, 2016.
12The Subject Property sold twice on June 1, 2018 for $1 and $190,101. MPAC submitted that the sale of the nominal fee was a transfer between an estate and a private trust company. The second sale on the same date was purchased by the Appellants. They testified that the purchase price of $190,101 for the Subject Property, was more than it was worth. The Board finds that although this sale is a valid sale, as the Appellants provided the Board with the agreement of purchase and sale, the Board is unable to use it to determine the current value of the Subject Property as this sale is too far removed from the valuation date of January 1, 2016.
13The Board finds that the current value of the Subject Property for the 2019 taxation year is $213,000 (rounded) and for the 2020 and 2021 taxation years to be $277,000 as returned.
MPAC’s Proposed Comparable Properties
14MPAC presented the Board with six proposed comparable property sales. The details of MPAC’s proposed comparable property sales are in Table 1 attached at the end of this Decision.
15MPAC submitted that these comparable properties establish a sales range value of $297,000 to $470,000 and based on additional consideration given to the state, condition and neighbourhood influences specific to the Subject Property, a value below this range of $277,000 is appropriate for the Subject Property.
16The Board did not use MPAC’s proposed comparable property Sales 1, 2, 4, and 5 to determine the correct current value of the Subject Property. These proposed comparable property sales sold outside the shoulder years of the valuation date of January 1, 2016, which is 12 months on either side of the valuation date. The sale dates for these comparable property Sales 1, 2, 4, and 5 is from May 2014 to February 2020. The Board may use the sales of properties as far back as 18 months on either side of the valuation date of January 1, 2016, however, the caution being that the further a sale is from the valuation date, the less likely it reflects the market value on the valuation date.
17The Board finds that MPAC’s proposed comparable property Sales 3 and 6 are superior to the Subject Property, in terms of lot size, location and condition. These two comparable property sales sold within the shoulder years of the valuation date. Comparable property Sale 3 sold twice in May 2014 and July 2015. The July 2015 sale is the sale period that is within the shoulder years of the valuation date. Although this property has a smaller site area of 0.11 acres its building size of 2,218 sq. ft. is still within the size range of the Subject Property. However, the Board finds that its condition is superior to the Subject Property as admitted by MPAC. The site area of comparable property Sale 6 of 0.19 acres is within the size range of the Subject Property at 0.18 acres. Its building structure is made of brick and at the time of sale it had an outdoor pool and a green house. The Board also finds that this property is superior to the Subject Property in terms of its condition. MPAC admitted that this property is slightly superior to the Subject Property.
Appellant’s Proposed Comparable Properties
18The Appellant presented an appraisal report from Roy Merkley, an appraiser who was not present at the hearing. The Board will not place any weight on this appraisal report due to the errors in the report that were not clarified by the Appellants during cross-examination.
19Mr. Merkley used three comparable properties to conclude that the current value of the Subject Property should be $180,000. MPAC submitted that the factual errors in the appraisal report are important because Mr. Merkley used these incorrect figures to make corresponding adjustments to the value of the Subject Property. In the appraisal report, Mr. Merkley indicated that the Subject Property’s livable area is 2,156 sq. ft., MPAC records indicate it is 2,541 sq. ft. MPAC further submitted that the square footage of the three comparable properties that Mr. Merkley used to make adjustments to the value of the Subject Property are also incorrect. The Appellants were unable to clarify these errors and testified that “they do not know since they did not write the appraisal report”.
20The Appellants also presented 10 proposed comparable sale properties from a realtor, Lisa Cyr-Auld. The Board did not use these sales due to the insufficient information about the properties from the realtor and most of the sales occurred outside the shoulder years of the valuation date of January 1, 2016. The Appellants testified that the highest property sale price amongst these 10 properties was $250,000 and they believe this property is superior to the Subject Property. During cross-examination, MPAC indicated that the realtor was not present at the hearing to be cross-examined by MPAC, on the search parameters used for the 10 properties and whether the realtor had carried out an analysis of the sales provided. The Board finds that the realtor did not provide the search criteria used for the 10 proposed comparable property sales and the condition of the properties at the time of sale.
21The Appellants presented the Board with a further six proposed comparable property sales. The Board did not use any of the Appellant’s proposed comparable property sales in determining the current value of the Subject Property. Two of the properties: 151 King Street and 55 Hubbell Street did not sell, and the remaining four property sales were too far removed from the valuation date of January 1, 2016.
Neighbourhood Influences
22The Appellants submitted that there are some neighbourhood influences which have a negative impact on the value of the Subject Property.
23The Board finds that it cannot make any downward adjustment to the current value of the Subject Property, based on these neighbourhood influences without quantitative evidence.
24The Appellants identified the following locational factors as decreasing the value of the Subject Property:
a. A drug treatment clinic adjacent to the Subject Property - clients trespass onto the Subject Property;
b. A food truck and a large thrift store on the west side of the Subject Property - attracts homeless people;
c. A gas station, convenient store and garbage container on the south side of the Subject Property;
d. The north of the Subject Property is abutted by a retaining wall for an adjoining apartment building, which is a large multi residential building;
e. Environmental contamination from litter, noise, ventilation, pollution from the gas station;
f. A metro grocery store and large public parking lot on the south side.
25The Appellants did not provide any environmental impact reports for pollution. Furthermore, they did not provide any evidence to quantify a downward adjustment. Evidence is required to quantify or measure the impact of any unique situation against the assessed value of the Subject Property. The Board cannot speculate or arbitrarily calculate an impact to the Appellant’s assessed current value.
Finding on Current Value
26The Board reviewed and used MPAC’s proposed comparable property Sales 3 and 6 to determine the current value range of the Subject Property, as these sales sold approximately within six and 13 months from the valuation date.
27Comparable property Sales 3 and 6 as determined by the Board are both superior to the Subject Property. The sale prices of these properties range from $285,000 to $340,000, leading to time adjusted sale prices of $294,165 to $344,084. The current value of the Subject Property should be below the sale and time adjusted sale prices of these properties, since the Board determined that they are both superior to the Subject Property. Comparable property Sale 6 sold for $285,000. It is 26 years older than the Subject Property and has a lower quality of construction of 6.5, however MPAC admitted that it is slightly superior to the Subject Property in terms of its condition. The Subject Property has a higher quality of construction of 7.0 and it is newer than Sale 6. MPAC assessed the Subject Property at $277,000 for the 2020 taxation year, which is lower than the sale and time adjusted sale prices of comparable property Sales 3 and 6. The Board finds that the current value of the Subject Property to be $277,000 for the 2019, 2020 and 2021 taxation years.
Condition of the Subject Property
28Having determined that the current value of the Subject Property is $277,000, the Board finds that it may be necessary to adjust the current value to account for defects in the Subject Property. As determined in a prior decision of the Board in Municipal Property Assessment Corporation, Region No. 16 v Melnikova, 2017 CanLII 81711 (ON ARB) at paragraph 6, the state and condition of a property may have an impact on the current value of the property.
29The Appellants testified that after the purchase of the Subject Property in June 2018, there were necessary repairs that needed to be carried out on the Subject Property. They provided receipts for these repairs to a total of $63,897.50. MPAC submitted that it does not dispute or object to this amount.
30The Board must determine the condition of the Subject Property on the condition date, as the assessed value should reflect the condition of the property on the state and condition date.
31Section 36(1) of the Act states that …assessment of land shall be made annually at any time between January 1 and the second Tuesday following December 1. Section 36(2) provides that the roll shall be returned not later than the second Tuesday following December 1 in the year in which the assessment is made.
32In General Motors of Canada Ltd. v. Municipal Property Assessment Corp., Region No. 27, [2017] O.A.R.B.D. No. 13, at paragraph 11, the Board stated that:
Property is assessed each year as it was when the tax roll was returned to the municipality. The roll must be returned by the second Tuesday following December 1 of the previous year, so the state of the property on that date is determinative of the assessment.
33The Appellants provided receipts for the following repairs:
Roof - $36,500
Soffit Fascia, Gutters and Troughs- $7,297.50
Furnace and Hot water Heater - $14,732.00
Windows - $4,260.00
Cellar Door - $1,108
34On the state and condition date for the 2019 taxation year, which is December 11, 2018, the Subject Property was lacking these necessary repairs as the Appellants testified that these were necessary repairs that had to be carried out to reside in the Subject Property when it was purchased. The Board finds that a willing buyer will request for a reduction in the purchase price of the Subject Property due to the defects on the state and condition date. The total cost of repairs is $63,897.50. The Board finds that this should be deducted from the determined current value of $277,000. The Board determines the current value for the 2019 taxation year to be $213,000 (rounded).
35The state and condition dates for the 2020 and 2021 taxation years are December 10, 2019 and December 8, 2020. MPAC argued that for the 2020 taxation year, the current value of the Subject Property should not be less than $300,000, due to the repairs that was completed, which has increased the value of the Subject Property. The Appellant argued for a decrease in the current value due to the condition of the Subject Property and provided receipts for costs of repairs. MPAC did not advise the Board during the hearing that it served the Appellants with a notice of increase in the assessment of the Subject Property pursuant to Rule 40(b) of the Board’s Rules of Practice and Procedure (the “Old Rules”). Therefore, the Board finds that the current value of the Subject Property for the 2020 and 2021 taxation years to be $277,000.
Issue 2 - Whether there should be an equitable reduction of the current value pursuant to [s. 44(3)](https://www.canlii.org/en/on/laws/stat/rso-1990-c-a31/latest/rso-1990-c-a31.html)(b) of the [Act](https://www.canlii.org/en/on/laws/stat/rso-1990-c-a31/latest/rso-1990-c-a31.html), and, if so, what the amount of this reduction should be.
36Section 44(3)(b) of the Act directs that after determining 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 the land.
37The Board finds that similar properties have been assessed at or near their current value, therefore an equity adjustment is not necessary.
38MPAC presented an equity analysis of 30 residential sales of single-family detached homes from January 1, 2014 to December 31, 2019 within 1.0 kilometers of the Subject Property. MPAC submitted that the median Assessment to Sale Ratio (“ASR”) is 0.995. MPAC added that the International Association of Assessing Officers standards states that the median ratio should fall between 0.90 and 1.10. Furthermore, MPAC submitted that MPAC’s standard is 0.95 to 1.05 and this indicates that similar real property in the vicinity have been assessed at or near their current value, therefore, no equity adjustment is required to MPAC’s opinion of value of $277,000.
39The Appellants did not present any evidence to support an equity reduction. They argued that the Board should use MPAC’s six proposed comparable properties with ASR ranging from 0.63 to 0.91 to reduce the current value of the Subject Property. The Board finds that this determination cannot be made with six properties. The application of equity is remedial in nature. Where the Board is of the view that applying the determined correct current value will result in unfairness if the Subject Property is bearing a corresponding tax burden based on its current value and all other similar properties are not. In order to correct this, in accordance with s. 44 (3)(b) of the Act, the Board has to make a determination that there is inequity, that the assessment of the Subject Property at its current value creates inequity.
40MPAC provided a more representative sample size, which is preferred for its reliability and will provide a general level of assessment of similar lands in the vicinity. The Board notes that MPAC’s comparable property Sales 3 and 6, which the Board used to determine the current value range of the Subject Property is included in MPAC’s equity analysis.
41In determining current value of the Subject Property, the Board found that most of MPAC’s proposed comparable properties were too far removed from the valuation date of January 1, 2016 to be useful comparators. MPAC’s equity analysis used property sales that sold from January 2014 to December 2019. This also included sales that are too far removed from the valuation date. Therefore, the Board used the ASR of 12 properties from MPAC’s equity analysis that sold between November 2014 to February 2017. The time adjusted sales ratio of these 12 properties is 0.998 and the ASR using the sale price of these 12 properties is 1.003. This reveals that MPAC is assessing properties at or near their sales prices. Therefore, the Board finds that there is no evidence provided by the parties to support a reduction in the current value of the Subject Property, in order to make it equitable with the assessment of similar properties in the vicinity.
CONCLUSION
42The Board finds that the correct current value of the Subject Property is $213,000 (rounded) for the 2019 taxation year and $277,000 for the 2020 and 2021 taxation years with no equitable adjustment.
ORDER
43The Board orders that:
a) the assessment is reduced from $341,000 to $213,000 for the 2019 taxation year.
b) the assessments are confirmed at $277,000 for the 2020 and 2021 taxation years.
"Subuola Awoleri"
SUBUOLA AWOLERI
MEMBER
Assessment Review Board
Website: www.tribunalsontario.ca/arb
Telephone: 416-212-6349 Toll Free: 1-866-448-2248
TABLE 1 - MPAC Comparable Property Sales
| Feature | Subject Property | Property #1 | Property #2 | Property #3 | Property #4 | Property #5 | Property #6 |
|---|---|---|---|---|---|---|---|
| Roll Number | 080203006529200 | 080203005529800 | 080202004020900 | 080202004006400 | 080202004006400 | 080203005514500 | 080202004024200 |
| Address | 11 CLARISSA ST | 32 SHERWOOD ST | 68 BETHUNE ST | 27 PINE ST | 27 PINE ST | 11 GRANITE ST W | 26 VICTORIA AVE |
| Distance in km | 0.6169 | 0.8646 | 0.8272 | 0.8272 | 0.6622 | 0.6718 | |
| Valuation | |||||||
| Current Value Assessment | $277,000 | $298,000 | $338,000 | $291,000 | $291,000 | $360,000 | $278,000 |
| Sale | |||||||
| Sale Date | 20190815 | 20171101 | 20150717 | 20140501 | 20200212 | 20141128 | |
| Sale Amount | $531,900 | $407,000 | $340,000 | $337,000 | $539,000 | $285,000 | |
| Time Adjusted Sale Amount | $437,049 | $379,499 | $344,084 | $348,449 | $425,807 | $294,165 | |
| Time Adjusted Sale Ratio | 0.6818 | 0.8906 | 0.8457 | 0.8351 | 0.8455 | 0.945 | |
| Site | |||||||
| Actual Frontage | 60 | 110 | 100 | 50.25 | 50.25 | 60 | 74.63 |
| Actual Depth | 132 | 160 | 96 | 96 | 110 | ||
| Actual Site Area (Acres) | 0.18 | 0.4 | 0.37 | 0.11 | 0.11 | 0.24 | 0.19 |
| Abuts Variable(s) | (M) Abuts Multi- Residential, (C) Abuts Commercial | (K) Traffic Pattern – Light | (M) Abuts Multi- Residential | (C) Abuts Commercial | |||
| Proximity Variable(s) | (M) Proximity To Multi- Residential, (C) Proximity To Commercial | (W) Proximity To Place Of Worship, (D) Proximity To Institutional | |||||
| Residential Structure | |||||||
| Year Built | 1900 | 1900 | 1886 | 1890 | 1890 | 1888 | 1874 |
| Structure Condition Code | Average | Average | Average | Average | Average | Average | Average |
| Quality of Construction | 7 | 7 | 7 | 7 | 7 | 7 | 6.5 |
| Full Storeys | 2 Storeys | 2 Storeys | 2 Storeys | 2 Storeys | 2 Storeys | 2 Storeys | 2 Storeys |
| Bedrooms | 4 | 3 | 4 | 4 | 4 | 5 | 5 |
| Baths | 1.5 | 1.5 | 1.5 | 1 | 1 | 1.5 | 1.5 |
| Fire Places | 1 | 2 | 2 | 1 | |||
| Air Conditioning | N | N | N | N | N | N | N |
| Heating Type | Forced Air | Forced Air | Hot Water (Boiler) | Hot Water (Boiler) | Hot Water (Boiler) | Hot Water (Boiler) | Hot Water (Boiler) |
| Driveway | Separate Or Private Driveway | Separate Or Private Driveway | Separate Or Private Driveway | Separate Or Private Driveway | Separate Or Private Driveway | Unspecified/Not Applicable | Separate Or Private Driveway |
| Building Total Area (SF) | 2,541 | 2,449 | 2,838 | 2,218 | 2,218 | 2,234 | 2,812 |
| First Floor Area (SF) | 1423 | 1342 | 1419 | 1117 | 1117 | 1117 | 1466 |
| Second Floor Area (SF) | 1118 | 1107 | 1419 | 1101 | 1101 | 1117 | 1346 |
| Secondary Structure(s) | |||||||
| Structure Description | (101) Detached Garage | (102) Shed | (101) Detached Garage | (101) Detached Garage | (101) Detached Garage | (101) Detached Garage | (108) Outdoor Pool |
| Year Built | 1980 | 1983 | 1886 | 1890 | 1890 | 1970 | 1971 |
| Building Total Area (SF) | 240 | 144 | 676 | 216 | 216 | 371 | 648 |
| Quality of Construction | 3 | 1 | 3 | 3 | 3 | 3 | 2 |
| Structure Description | (103) Greenhouse | ||||||
| Year Built | 1981 | ||||||
| Building Total Area (SF) | 162 | ||||||
| Quality of Construction | 2 |