Tribunals Ontario / Tribunaux décisionnels Ontario

Assessment Review Board / Commission de révision de l’évaluation foncière

ISSUE DATE: July 06, 2021

FILE NO.: RD 21-003

Assessed Person(s): Roger Menard and Tracy Menard

Appellant(s): Roger Menard and Tracy Menard

Respondent(s): Municipal Property Assessment Corporation Region 28

Respondent(s): City of North Bay

Property Location(s): 355 Regal Road

Municipality(ies): City of North Bay

Roll Number(s): 4844-050-068-50100-0000

Appeal Number(s): 3389760, 3394957 and 3410869

Taxation Year(s): 2018, 2019 and 2020

Legislative Authority: Rules 101-103 of the Assessment Review Board’s Rules of Practice and Procedure

Parties	Representative
Roger Menard and Tracy Menard	Roger Menard
Municipal Property Assessment Corporation	Submissions not received
City of North Bay	Lisa Beaulieu

REQUEST FOR: A review of the Board’s Decision WR 167392 issued on December 18, 2020

HEARD: In writing

ADJUDICATOR: Jean-Paul Pilon, Member

DECISION

OVERVIEW

1Roger Menard (the “Requestor”) requests a review of the Assessment Review Board’s (the “Board”) Decision WR 167392, issued December 18, 2020 (the “Decision”).

Background

2The Requestor and Tracy Menard (together referred to as the “Appellants”) are the owners of a residential property located at 355 Regal Road in the City of North Bay (the “Subject Property”). They appealed the assessments of the Subject Property for the 2018, 2019 and 2020 taxation years.

3For the 2018 and 2019 taxation years, the assessments under appeal were omitted assessments made pursuant to section 33 of the Assessment Act, R.S.O. 1990, c. A.31 (the “Act”) to account for the construction of a new house in 2018. Those two assessments were returned at $698,000, and the land portion, which was not the subject of any appeal in the 2018 and 2019 taxation years, was returned at $178,000. The 2020 assessment under appeal for the totality of the Subject Property was returned at $841,000.

4In the Decision, the Board ordered a reduction of the 2018 and 2019 omitted assessments from $698,000 to $628,000, and a reduction of the 2020 assessment from $841,000 to $806,000.

5The only other submission in this request for review was an email from the City of North Bay (the “Municipality”), which confirmed one of the errors alleged by the Requestor as to the value of the building permit the Municipality had issued. Submissions on the request for review were sought but not received from the Municipal Property Assessment Corporation (“MPAC”).

Issues for the Review

6In the Board’s pre-printed “Request for Review of a Board Decision or Order” form, the Requestor alleged that the Board had “heard false or misleading evidence from a party or witness, which was discovered only after the hearing and could have affected the result,” pursuant to Rule 121(c) of the Board’s Rules of Practice and Procedure effective April 1, 2017 and amended May, 2019 that were in force at the time that this request for review was submitted (the “Rules”). This primarily pertained to the value of the building permit for the construction of the house described above that, in MPAC’s evidence at the hearing, was $600,000. In its written submission, the Municipality confirmed that this was, in fact, an error, and that the permit value was instead $400,000.

7The terms “false” and “misleading” in Rule 121(c) infer intention, which the Requestor has not alleged in the request for review. It is clear, however, that the evidence before the Board in this first issue was not accurate.

8Rule 121(b) provides a more suitable question to be determined in the request for review which the Board considers instead: whether “the Board made a significant error of law or fact such that the Board would likely have reached a different decision.” Therefore, the first question to be determined in this request for review is whether the Board’s reliance on the inaccurate evidence of a permit value of $400,000 was a significant error of fact such that the Board would likely have reached a different decision pursuant to Rule 121(b).

9The Requestor submitted that the Decision contained a second significant error which the Board considers pursuant to the same Rule. This is that the Decision determined that the Subject Property had a basement when, according to the Requestor, it did not. Therefore, the second question to be determined in this request for review is whether that error, if there was an error, was a significant error of fact such that the Board would likely have reached a different decision pursuant to Rule 121(b).

10Finally, the request for review contains additional information and analysis on the Appellants’ comparable properties without explaining how it fits into any of the grounds for review in Rule 121.

Result

11On the first issue, the Board is satisfied that the Decision contains an error of fact because the permit value was $400,000 when the Decision says it was $600,000. The Board does not, however, find that this is a significant error such that the Board would likely have reached a different decision.

12On the second issue, the Board finds that the Decision did not determine that the Subject Property had a basement. Moreover, the Board’s analysis on equity, where the alleged error appeared, did not assume that the Subject Property had a basement. There is no error in this part of the Decision.

13Finally, as to the additional information in the request for review pertaining to the Appellants’ comparable properties, the request for review does not specify any error of fact, law or procedure in the Decision or in the Board’s analysis. A request for review is not an opportunity to present evidence or analysis that could have been presented at a hearing, nor is there any suggestion that there was any error of procedure such that the Appellants were not permitted to present this evidence or analysis at the hearing. In addition, a request for review must indicate what error or errors a decision contains, whereas this part of the request for review does not. This is also not an error.

ANALYSIS

Issue 1 - Permit Value

14The omitted assessments for the 2018 and 2019 taxation years arose because the Appellants built a house on the Subject Property. MPAC’s evidence was that the permit value for that construction was $600,000, where the Municipality confirmed in its response to the request for review that the permit value was $400,000. While it appears that the Decision contains an error, the question to be determined in this request for review is whether it was a significant error of fact such that the Board would likely have reached a different decision pursuant to Rule 121(b).

15The error appeared at paragraphs 7 and 17 of the Decision. At paragraph 7, the Decision recited that the Appellants had purchased the Subject Property on July 29, 2016 for $232,674 with the intention of demolishing the existing cottage and replacing it with the house built in 2018. The Decision said that “the remaining land value was assessed at $178,000.” The Decision then indicated that the building permit was issued in 2017, and that the house was occupied as of March 1, 2018 before it stated the erroneous permit value.

16At paragraph 17 of the Decision, the Board set out its determinations of current value stated above. The significant portion of this paragraph is where it noted that “these values also happen to be very much in line with the construction value estimated by the City of $600,000 to build the structure combined with the land value of $178,000 established by MPAC totalling $778,000.”

17The language used in paragraph 17 denotes the secondary nature of the Board’s observation, to confirm the correctness of the Board’s primary analysis which was not raised as an issue in the request for review. That primary analysis was based on evidence of sales transactions using the direct comparison approach, which has been described as: “the most reliable evidence of market value.” (Walker and Grad, Ontario Property Assessment Handbook, 2d ed. (Toronto: Carswell, 2017) at 13-1 to 13-2)

18MPAC relied on evidence of six comparable properties that had been the subject of sales transactions close to the valuation date of January 1, 2016. At paragraph 13 of the Decision, the Board correctly noted that the Appellants did not introduce any sales evidence in support of their appeals.

19The median value of those six sales after upward adjustments made by MPAC, which were also not raised in the request for review, was $876,000 rounded. The Board accepted MPAC’s submission that the omitted assessments should be reduced to $628,000, where the uncontested assessment for the land portion was $178,000. This led to a total of $806,000 after taking into account a minor error in MPAC’s evidence regarding the amount of floor space at the Subject Property.

20The best evidence of current value in the direct comparison approach is evidence of sales prices because it is demonstrative of how the Subject Property would transact in an arms’ length sale. Permit value, a term that was unexplained in any of the material at the hearing or in the request for review, presumably denotes how much an applicant is permitted to spend on improvements when granted a building permit. The term “current value,” on the other hand, is defined in section 1(1) of the Act as meaning “in relation to land, 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,” which is not the same thing.

21In this case, simply because $400,000 might have been spent on the Subject Property did not mean that the resulting structure had the same value. The better evidence before the Board was that derived from sales transactions, and it was not unreasonable, nor was it an error for the Board to have entirely relied on that evidence.

22As a result, the Board finds that the error as to permit value was not a significant error of fact such that the Board would likely have reached a different decision.

Issue 2 - Basement

23The second significant error of fact alleged by the Requestor is that the Decision determined that the Subject Property had a basement when it in fact had none.

No Such Determination

24On this issue, the Requestor referred to paragraph 24 of the Decision, which made determinations regarding equity pursuant to section 44(3)(b) of the Act after considering each party’s evidence of comparable properties. The Board determined that the Appellants had “combined all living area (sic), including the finished portion of the basement to establish the assessed value per sq. ft. of living area and then made a direct comparison to the building area of the Subject Property.” The second reference in that paragraph to a basement was where it said that: “this is not a valid direct comparison as MPAC’s building area represents the outside measurements of the of the first and second floors while the Appellants’ living area represents the inside measurements of the area on the first and second floors as well as the finished space in the basement.”

25The Board finds that this paragraph does not, in fact, include a determination that the Subject Property had a basement because the reference to “the Appellants’ living area” was not to the Subject Property but to that measure in their comparable properties. This is not an error because the finding that the Requestor alleges is in the Decision is not there.

26Nevertheless, in determining this request for review, the Board has also examined the remaining analysis on equity in the Decision to ensure that it was not made assuming that the Subject Property had a basement, which might have been indicative of an error.

No Assumption in the Decision that the Subject Property Includes a Basement

27By way of overview, MPAC’s evidence at the hearing was its written equity analysis that compared the assessment to sales ratios (“ASR”) of 30 similar properties in the vicinity chosen in accordance with section 44(3)(b) of the Act. The Appellants’ evidence summarized in the Decision was composed of the assessed value, “living area” (inclusive of basement space), year built and number of storeys for six properties that had not been the subject of sales transactions.

28The Appellants’ approach at the hearing was to show that the assessment of the Subject Property was not equitable with their six properties because the assessed value per square foot of “living area” for those properties was lower than that of the Subject Property. The range of values for that ratio (assessed value divided by square foot of “living area” which included basement space) was between $140.03 and $179.96, where for the Subject Property that ratio would have been $245.33 as returned in 2020 ($841,000 divided by 3,428 sq. ft.). However, the floor space of the Appellants’ properties less any basement space was not in evidence. With less floor space, the ratios for those properties would have been higher, demonstrating less inequity with the Subject Property, although to what extent would have been unknown. The absence of that data would have made it impossible for any adjustment to have been applied based on the Appellants’ evidence at the hearing that could not be compared.

29Sales data, such as that relied upon by MPAC at the hearing, is not necessary in an equity analysis unlike in the direct comparison approach to determining value. Its absence, however, makes any conclusion significantly less reliable unless such properties are very similar to the property at issue in an appeal, so that their assessments can be compared to one another. The analogy would be comparing apples to oranges, instead of comparing apples to apples when comparing assessments alone.

30As noted above, the Board then determined, among other things, that the Appellants’ comparable properties could not be compared to the Subject Property because interior space was measured differently, where the Appellants had included basement space and MPAC had not.

31Even if the Appellants’ evidence had been accurate as to floor space of their comparable properties so that they could be compared to the Subject Property, it was not contested that the Subject Property had floor space of 3,428 square feet without any basement. Whether or not there was a basement at the Subject Property would have been irrelevant because at that point data before the Board would have been comparable, at least on that measure.

32Therefore, the Board finds that there was no determination that the Subject Property had a basement, nor was the Board’s analysis in the Decision based on any potentially erroneous assumption that the Subject Property had a basement. This portion of the Decision contains no error.

Additional Material Submitted with the Request for Review

33Finally, the request for review included additional information about the Appellants’ comparable properties without alleging any error in the Decision.

34A request for review must be specific about the significant errors alleged. It is not an opportunity for a party to present evidence that could have been presented at a hearing in the hope of obtaining a different result.

35There was no suggestion in the request for review of any error of procedure such that the Appellants were not given the opportunity to present any of this material at the hearing, nor was it suggested in the request for review that this is “new evidence that could not have reasonably been obtained earlier and have affected the result” pursuant to Rule 121(d).

36The Board therefore finds that simply presenting this material in the request for review does not demonstrate that there is any significant error in the Decision.

CONCLUSION

37Rule 123(a) provides that “upon considering a request for review, the Board may… dismiss the request.” None of these submissions demonstrate any significant errors in the Decision within the meaning of Rule 121.

ORDER

38The Board orders that this request for review is dismissed.