Tribunals Ontario

Assessment Review Board

ISSUE DATE: August 05, 2021 FILE NO.: WR 171842

Assessed Person(s): Amarjeet Mann and Kamaljit Mann Appellant(s): Gurjit S. Grewal Respondent(s): Municipal Property Assessment Corporation Region 15 Respondent(s): City of Brampton

Property Location(s): 8 Rae Avenue Municipality(ies): City of Brampton Roll Number(s): 2110-120-003-32900-0000 Appeal Number(s): 3420607 and 3444995 Taxation Year(s): 2020 and 2021 Hearing Event No.: 744192

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

APPEARANCES:

Parties	Representative
Gurjit S. Grewal	Self-represented
Amarjeet Mann and Kamaljit Mann	No one appeared
Municipal Property Assessment Corporation	Olivia Medeiros
City of Brampton	No one appeared

HEARD: June 23, 2021 by telephone conference call

ADJUDICATOR(S): Jennifer Griffith, Member

DECISION

OVERVIEW

1Amarjeet Mann and Kamaljit Mann the (“Assessed Persons”) are the owners of 8 Rae Avenue (the “Subject Property”) in the City of Brampton (the “City”). Gurjit S. Grewal (the “Appellant”) filed appeals for the returned assessment of $5,832,000 for the 2020 and 2021 taxation years with the Assessment Review Board (the “Board”), pursuant to s. 40 of the Assessment Act, R.S.O. 1990, c. A.31 (the “Act”).

2It is the Appellants’ position that the Municipal Property Assessment Corporation’s (“MPAC”) current value assessment of $5,832,000 is too high and that the correct current value should be $4,242,000 based on sales evidence. MPAC takes the position that the correct current value should be $6,318,000. However, MPAC is not seeking an increase in assessment and is asking to have the returned assessment of $5,832,000 confirmed. No one appeared on behalf of the City.

3Pursuant to s. 19(1) of the Act, the assessment of land shall be based on its current value; and s. 19.2(1)4 provides that, for the 2020 and 2021 taxation years, MPAC is required to assess this value as of the valuation date, January 1, 2016.

4Pursuant to s. 40(11) of the Act, the municipality in which the land is located is a party to this proceeding; however, no one appeared on behalf of the City.

5Pursuant 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 required and that the equitable value should be $4,341,000 based on the returned assessments of three proposed comparable properties. This value is an alternative approach to value based on equity.

Issues for the Hearing

6The issues to be determined on this appeal are:

1. Is the Quality of Construction rating of 10 incorrect?
2. Is the vicinity for selecting the sales of comparable properties only limited to the City?
3. What is the determination of the current value of the Subject Property for the 2020 and 2021 taxation years based on a direct comparison approach?
4. Whether there should be an equitable reduction of the current value pursuant to s. 44(3) of the Act, and, if so, what the amount of this reduction should be.

Result

7The Board finds the correct current value of the Subject Property is $6,318,000 as of the valuation date January 1, 2016, which is based on the Direct Comparison Approach for the reasons set out below. However, MPAC has not served a notice to seek a higher assessment as required by Rule 28 of the Board’s Rules. Given that MPAC has clearly recommended that it is not seeking an increase for the 2020 and 2021 taxation years, the Board will not increase the assessment. Rule 28 states:

Notice to Seek a Higher Assessment

A party is deemed to have given notice of its intention to seek a higher assessment or higher … where:

a) The party has included its request in its Statement of Issues or Statement of Response; or

b) The party delivers a separate written notice of its request, which is served on all parties and filed with the Board at any time prior to the due date in the Schedule of Events for serving its Statement of Issues or Statement of Response.

8The assessment is therefore confirmed at $5,832,000 for the 2020 and 2021 taxation years.

9The Board also finds that an equity reduction pursuant to s. 44(3)(b) is not required.

10Therefore, the Board orders that the returned assessment of $5,832,000 be confirmed for the 2020 and 2021 taxation years.

ANALYSIS

Issue 1 - Is the Quality of Construction rating of 10 incorrect?

11The Appellants’ Representative argues that the quality of construction rating of 10 is too high for the Subject Property and believes it should be a rating of 8.5 or 9.5 rating. The Appellants submit that MPAC has not conducted an internal and/or external inspection of the Subject Property to confirm the quality of construction and therefore have no way of substantiating the accurate quality of the Subject Property.

12According to MPAC’s Representative she attempted to contact the owners several times after the Subject Property was completely built and the owner never responded to her messages. Shortly after, the COVID-19 Pandemic hits the country and due to COVID-19 restrictions in Ontario, MPAC was forced to cease all internal and external inspection to comply to the COVID-19 restrictions imposed by the province.

13Alternatively, MPAC’s Representative testifies that she utilized digital images, internal and external photographs (provided by the Appellant) and a copy of the City’s “Building Plans” of the Subject Property, which she reviewed to confirm the quality of construction, quality of materials, design, craftsmanship etc. of the Subject Property.

14The MPAC Representative provides the following list of the unique characteristics contained in the Building Plan (# 15-118-987-000-00 HO) for the Subject Property:

I. gas fireplace on each level, elevator runs from basement to second floor, coffered ceiling, and French doors, open to above area in the grand foyer;

II. on the ground floor is an office, living room, dining room, breakfast room, kitchen with built-ins, extra kitchen (spice kitchen) pantry and gallery, kitchen island, wine room, guestroom with ensuite bathroom, one full and two half bathrooms;

III. on the second floor there are six bedrooms each with an ensuite. Each room has a walk-in closet and ante room, but the master bedroom and bedroom number three have his and hers walk-in closets;

IV. on the third floor is a prayer room; and

V. the basement is walk-out, finished with three full bathrooms and one half bathrooms, fitness room, games and billiards room, theatre room seating 20, kitchen and bar, indoor swimming pool with women and men change rooms, outdoor patio; and radiant floor heating that runs through all bathrooms, mudroom, cleaning area, corridor, laundry, ground floor kitchen, breakfast room, indoor pool area and outdoor patio.

15Based on digital images, the approved building plan as well as internal and external photographs of the Subject Property, MPAC’s Representative argues that the Subject Property is a custom-built home on a two-acre estate sized lot and that all of the unique characteristics, design, materials and craftsmanship support the quality of construction rating of 10.

Findings on Quality of Construction Rating

16In reviewing the above evidence, the Board finds that the quality rating of 10 is correct for the Subject Property. MPAC has presented digital imaging; detailed information contained in the approved building plan about the quality of material, design and craftsmanship etc.; and photographs to show the interior finishes, design, quality of materials, and quality of workmanship, which together with the lot size supports a quality rating of 10 for the Subject Property.

17The Board rejects the Appellants’ argument that the Subject Property should have a rating in the range of 8.5 and 9.5, based solely on the fact that MPAC did not inspect the Subject Property. The Appellants present no factual documents (building plan, photographs etc.) to demonstrate that the Subject Property quality rating should be lower than a rating of 10. Therefore, the Board puts no weight on the Appellants’ argument.

Issue 2 – Is the vicinity for selecting the sales of comparable properties only limited to the City?

18MPAC’s Representative testifies that she was unable to find sales of comparable properties with similar characteristics as the Subject Property in the City. MPAC therefore extended the vicinity to the neighbouring cities of Mississauga and Vaughan in search of sales of comparable properties with similar characteristics located in neighbourhoods similar to the Subject Property. In support of expanding the vicinity, MPAC cited the following two cases:

I. Brown v. Municipal Property Assessment Corp. Region No. 9, [2008] O.A.R.B.D. No. 132 at paragraph 18(4); and

II. Tuckernuck Mortgage Administration Inc. v. Municipal Property Assessment Corporation, Region No. 18 [2012] O.A.R.B.D. No. 295 at paragraph 37.

19The Appellants’ Representative argues that the vicinity should be the City in which the Subject Property is located asserting that there are enough sold comparable properties with similar characteristics to Subject Property in the City.

Findings on Vicinity

20In reviewing the issue of vicinity, the Board finds that “vicinity” is not defined in the Act. In order to make a finding of current value it is necessary for the Board to review open market sale of the Subject Property which occurred at or around the valuation date of January 1, 2016. In the absence of any sale of the Subject Property, the Board reviews the sales of proposed comparable properties by the parties to determine which properties are similar in characteristics to the Subject Property which occurred within the shoulder years of the valuation date of January 1, 2016 in the vicinity.

21The Board recognizes the fact that there are instances where there are limited or no sales of similar comparable properties in the immediate neighbourhood of the Subject Property. In such cases, the Board takes the position that it is necessary to expand the vicinity to find a reasonable number of sales with similar characteristics as the Subject Property which occurred at or around the valuation date for the determination of current value.

22The Board finds that the Subject Property is a very large unique custom built home in terms of (quality, size, design, workmanship etc.) and accepts MPAC’s argument that expanding the vicinity in search of sales of comparable properties with similar characteristics to the Subject Property is necessary, when there are no sales in the immediate neighbourhood of the Subject Property.

23This finding of expanding the vicinity is supported by:

I. Brown v. Municipal Property Assessment Corp. Region No. 9, [2008] O.A.R.B.D. No. 132 at paragraph 18(4) which states:

The Board must first of all deal with the primary issue which is to determine the appropriate vicinity. Since the Act does not describe the word “vicinity”, the Board must look to the facts in each case. As the Act requires that properties be assessed at current value, there is no longer any reason to limit the vicinity, even to one municipality, provided that properties are similar and market characteristics do not differ: and

II. Tuckernuck Mortgage Administration Inc. v. Municipal Property Assessment Corporation, Region No. 18 [2012] O.A.R.B.D. N0. 295 at paragraph 37 which states:

The Board would be remiss if it did not explain the word “vicinity”. Vicinity could mean more than in close proximity and, if necessary, could be extended over a large area outside municipal boundaries to obtain a sufficient number of properties that could be compared to the subject property. There is no reason to limit vicinity to a single municipality if the market to ascertain current value extends over two or more municipalities as is the case in the appellants’ report.

24The Board rejects the Appellants’ argument that the vicinity should be confined to the City in which the Subject Property is located. The Board takes the position that when there are no sales of comparable properties with similar characteristics in the same neighbourhood as the Subject Property, the vicinity should be extended as far as is necessary, to finds a reasonable number of sales of comparable properties to assist the Board in its determination of current value.

Issue 3 - What is the determination of the current value of the Subject Property for the 2020 and 2021 taxation years based on a direct comparison approach?

Direct Comparison Approach Based on Sales

25The Direct Comparison Approach estimates the market value by comparing the sale prices of similar properties (in terms of lot size, total building area, year built, quality of construction etc.) that have sold within a reasonable timeframe of the valuation date to the Subject Property. In this case the valuation date is January 1, 2016.

26In 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”.

27For the reasons discussed below, the Board finds the correct current value at the valuation date of January 1, 2016 is $5,898,000.

28Reviewing the evidence in support of current value, the Board finds the two sales presented by MPAC to be the best evidence of current value.

MPAC’s Evidence in Support of Current Value

29MPAC’s Representative presents a Valuation Report dated April 19, 2021, which she prepared and testified to the information contained in the report.

30In support of current value, MPAC’s Representative presents two proposed comparable properties, which sold in 2015 and 2016. The first is located in the City of Mississauga and the second is located in the City of Vaughan.

31MPAC’s Representative asserts that land values in the City of Mississauga and in the City of Vaughan are significantly higher than land value in the neighbourhood of the Subject Property , even though sales of vacant land demonstrate that land prices in the Subject Property’s neighbourhood are on the rise. MPAC’s Representative takes the position that an adjustment should be made to reflect the differences in land values between the two comparable properties and the Subject Property.

32MPAC’s Representative testifies that the assessed land value of the Subject Property is $654,000, whereas the assessed land value for 2468 Doulton Place, in the City of Mississauga is $1,546,428 for a difference of $891,528 ($1,546,428 - $654,900 for the Subject Property); and assessed land value for 91 Rocmary Place, in the City of Vaughan is $1,259,164 for a difference of $604,264 ($1,259,164 - $654,900 for the Subject Property). Therefore, MPAC’s Representative applied a negative adjustment of $891,528 to the time adjusted sale price of $8,052,363 for 2468 Doulton Place, in the City of Mississauga which reduces it to $7,160,835; and applied a negative adjustment of $604,264 to the time adjusted sale price of $5,240,740 for 91 Rocmary Place, in the City of Vaughan which reduces it to $4,636,476. These adjustments are shown on the following sales analysis.

33MPAC’s Representative provides both the actual and time-adjusted sale prices; however, she relies on the time-adjusted sale prices in her analysis by utilizing the Direct Comparison Approach to value. The following Table is the analysis of the two proposed comparable properties:

MPAC’s Sales Analysis

2 PROPOSED COMPARABLE PROPERTIES	LOT SIZE (acre)	TOTAL BUILDING AREA (sq. ft.)	QUALITY RATING	YEAR BUILT	SALE DATE	SALE PRICE	SALE PRICE (time adjusted)	TAS MINUS LAND ADJ.	SALE PRICE (time adjusted per sq. ft.)
2468 Doulton Place (Mississauga)	1.81	12,145	10	2003	2015	$7,400,000	$8,052,363	$7,160,835	$589.61
91 Rocmary Place (Vaughan)	1.98	11,288	9.5	2007	2016	$5,600,000	$5,240,740	$4,636,476	$410.74
Average	1.895	11,716	9.75	2005	2015	$6,500,000	$6,646,551	$5,898,655	$500.17
Subject Property	1.99	12,633	10	2018	NIL	N/A	N/A	N/A	N/A

34Based on the above analysis of the sales of these two comparable properties, MPAC’s Representative is of the opinion that these two comparable properties are the most similar to the Subject Property in terms of (size, quality, design, and location etc.). When the average adjusted sale price of $500.17 per sq. ft. is applied to the Subject Property it results in a current value of $6,318,000 rounded ($500.17 x 12,633 sq. ft. based on total building area).

35Based on the evidence, MPAC’s Representative is of the opinion that the current value is $6,318,000.

Appellants’ Evidence in Support of Current Value

36In support of current value, the Appellants’ Representative presents a spreadsheet analysis of five sales.

37The Appellants’ Representative testifies that these five proposed comparable properties are located in the same vicinity as the Subject Property. He also testifies that he obtained the sales information from the Real Estate Board. The following is an analysis of the five sales based on actual sale prices:

Appellants’ Sales Analysis

5 PROPOSED COMPARABLE PROPERTIES	LOT SIZE (acre)	TOTAL BUILDING AREA (sq. ft.)	YEAR BUILT	SALE DATE	SALE PRICE	SALE PRICE per (sq. ft.)
27 Bellini Avenue	2.07	11,435	2010	2017	$4,630,000	$404.90
9 Fitzpatrick Drive	2.13	6,898	1994	2015	$2,160,000	$313.13
7 Manswood Crescent	3.01	10,259	1996	2015	$2,175,000	$212.01
26 Fenton Way	2.01	5,875	1986	2017	$2,600,000	$442.55
10 Angel bluff Court	1.91	12,500	2015	2017	$4,207,000	$336.56
Median	2.07	10,259	1996	2017	$2,600,000	$336.56
Subject Property	1.99	12,633	2018	N/A	N/A	N/A

38The above analysis shows that these five proposed comparable properties based on the median calculations have lot size of 2.07 acres, a total building area of 10,259 sq. ft., sale date of 2017, sale price of $2,600,000 and sold at a sale price of $336.56 per sq. ft. based on total building area. When the median sale price is applied to the Subject Property it results in a value of $4,251,762 ($336.56 x 12,633 sq. ft. based on total building area).

39The Appellants’ Representative however, determined the median rate per sq. ft. (by dividing the total sale price of the five sales of $15,772,000 by its total building area of 48,967 sq. ft.) to arrive at a median rate of $335.81. Then applying the median rate per sq. ft. to the Subject Property which results in a value of $4,242,291 (335.81 x 12,633 sq. ft. of total building area). The result of this calculation is slightly different because of the methodology used by the Appellant’s representative.

40Based on the Appellants’ Representative calculations, he is of the opinion that the current value is $4,242,000 rounded. The Board, however, will be evaluating the sales shown above in the Appellants’ Sales Analysis chart in the determination of current value, because it is the most accurate way of determining the median calculations of (lot size, total building area, sale prices per sq. ft. etc.) of these five sales. The median in this case represents the middle value by eliminating the highest and lowest numbers in all categories listed above in the Appellants’ Sales Analysis chart.

Finding of the current value of the Subject Property for the 2020 and 2021 taxation years.

41Reviewing the evidence presented in support of current value, the Board finds the best evidence are the two sales presented by MPAC which occurred in 2015 and 2016. These two comparable properties are located at 2468 Doulton Place, in the City of Mississauga, sold in 2015 at an adjusted (for time and difference in land value) sale price of $7,160,835 (or $589.61 per sq. ft.); and at 91 Rocmary Place, in the City of Vaughan, sold in 2016 at an adjusted (for time and difference in land value) sale price of $4,636,476 (or $410.74 per sq. ft.). These two comparable properties were sold at an average adjusted sale price of $5,898,655 (or $500.17 per sq. ft. based on total building area).

42The Board finds the above two comparable properties are the most similar to the Subject Property in total building area, lot size, quality, similar type locations in (Mississauga and Vaughan) and sold an adjusted cost of $500.17 per sq. ft. based on total building area. When this adjusted price per sq. ft. is applied to the Subject Property it results in a current value of $6,318,000 rounded ($500.17 x 12,633 sq. ft). The Board finds this current value represents the best evidence of arm’s length transaction between a willing buyer and a willing seller pursuant to s. 19(1) of the Act.

43The Appellants’ Representative only presents the actual sale prices for its five comparable properties, as opposed to MPAC who presented both actual and time-adjusted sale prices. The Board relies on the time adjusted sale prices. The Board finds that it is necessary to adjust for time in this case, because the sales of the Appellants occurred over the period 2015 to 2017 and would need to be adjusted to the valuation date of January 1, 2016.

44In reviewing the Appellants five sales of comparable properties, the Board did not rely on the three sales which occurred in 2017 at 27 Bellini Avenue; at 26 Fenton Way; and at 10 Angelbluff Court located in the same vicinity as the Subject Property, because the sale dates are too far removed from the valuation date of January 1, 2016 to provide any meaningful test of current value.

45The Board also did not rely on the remaining two sales which sold in 2015 at 9 Fitzpatrick Drive and 7 Manswood Crescent because these two proposed comparable properties are significantly inferior to the Subject Property, with an average total building area of 8,578 sq. fts, an average year build 1995 (average of 23 years older) and an average quality rating of 7.75 (as per MPAC). This is compared to the Subject Property with a total building area of 12,633 sq. ft., year built 2018, a quality rating of 10, and many other features (finished and walkout basement, indoor pool, secondary structures etc.) which demonstrate that the Subject Property is superior to these two comparable properties.

46Finally, the Board finds that the Appellants’ Representative presents limited information (e.g. no quality rating, finished basement area, secondary structures, Multiple Listing of Sales (“MLS^®”) etc.) about the five comparable properties he presented in support of current value. This information is necessary to carry out a proper comparison to the Subject property and establish the added value these features contribute to the current value.

47Based on the evidence, the Board find the current value is $6,318,000.

Issue 4 – 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#sec44subsec3_smooth)(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.

48Section 44(3)(b) of the Act provides that “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.” In essence, the Board looks to similar lands in the vicinity to determine whether their assessed values are lower than their current values. If so, then it would be equitable to lower the assessed value of the Subject Property by a proportionate amount.

49MPAC presents an Equity Analysis Report in which the assessments of 30 similar comparable properties (similar in general nature, character, or function as the Subject Property) are compared to their respective sale prices to determine the Assessment to Sales Ratio (“ASR”). The ASR is computed by dividing the assessed values of the property sold by its sale price.

50MPAC states that these 30 comparable properties are Property Code 301- single family detached not on water, are similar property type (Residential), sold over the period January 1, 2015 to December 31, 2016 and located 2.0 kilometers of the Subject Property.

51MPAC states that the analysis of the sale of these 30 comparable properties shows a Level of Appraisal (“LOA”) of 1.019 and a Coefficient of Dispersion (“CoD”) of 9.7.

52MPAC explains that the LOA measures central tendency and the mid-point of the ASR ratios, and the median ASR is the preferred measure to determine the LOA, because it is not affected by very low or high ratios. MPAC also explains that the CoD measures appraisal uniformity by determining the average deviation from the median ASR. Based on this finding, MPAC’s opinion is that an equity reduction is not required, and the equitable value is $6,318,000.

53On cross-examination MPAC made the following arguments regarding two of the Appellants proposed comparable properties in support of equity:

I. that the lot size of 2.0 acres for the proposed comparable property at 34 Cheval Court is incorrect, and that the correct lot size is 0.78 acre: and

II. that the proposed comparable property at 10 High Forest Court with 5.62 acres, includes slightly over 2.0 acres of Conservation land, with a quality rating of 8.5 and is therefore not similar to the Subject Property.

54In support of Equity, the Appellants’ Representative presents three proposed comparable properties that are not sold. They are located at 34 Cheval Court, assessed at $4,444,000, at 23 Ryckman Lane, assessed at 4,208,000 and at 10 High Forest Court, assessed at $2,087,000.

55These three proposed comparable properties have on average year built 2009, assessed value of $3,579,666, total building area of 10,418 sq. ft., lot size of 3.29 acres and assessed at a value of $342.38 per sq. ft. The Appellants’ Representative again calculates the value per sq. ft. by dividing the total assessed values of $10,739,000 of these three proposed comparable properties by the total building area of 31,255 sq. ft., to arrive at a value per square foot of $343.60. When this value per sq. ft. is applied to the Subject Property it results in a value of $4,341,000 rounded ($343.60 x 12,633 sq. ft. of building area).

56The Appellants provided no factual evidence to refute the issues raised by MPAC that the lot size of 34 Cheval Court is incorrect and should be 0.78 acres; and that the lot size of 10 High Forest Court with 5.62 acres includes more than two acres of Conservation land and that these proposed comparable properties are not similar to the Subject Property.

Finding on 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#sec44subsec3_smooth)(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.

57Based on the above evidence, the Board finds that MPAC presents the best evidence in support of equity, with the analysis of 30 sales of similar type properties (similar in nature, character or function) as the Subject Property, and located within 2.0 kilometres of the Subject Property. The analysis shows that these 30 sales of similar properties have a LOA of 1.019 which falls within MPAC’s standard of 0.95 – 1.05 and within the International Association of Assessing Officers (“IAAO”) standards of 0.90 – 1.10 which the Board accepts and finds that this evidence does not support an equity reduction.

58The Board rejects the Appellants’ Representative three proposed comparable properties for the following reasons:

a) The sample size of three comparable properties is too small to accurately determine equity;

b) the three proposed comparable properties are not similar in terms of age, size, and quality in order to make a direct comparison to the Subject property; and

c) the Appellants’ Representative provided limited information and no supporting documentation in regard to quality of construction, finished basement and secondary structures.

CONCLUSION

59Based on the evidence, the Board finds the correct current value for the Subject Property at the valuation date January 1, 2016 is $6,318,000. However, MPAC has not served a notice to seek a higher assessment as required by Rule 28 of the Board’s Rules. Given that MPAC has clearly recommended that it is not seeking an increase for the 2020 and 2021 taxation years, the Board will not increase the assessment and finds the correct current value is $5,832,000.

60The Board also finds that an equity reduction pursuant to s. 44(3)(b) is not required.

ORDER

61The Board orders the returned assessments of $5,832,000 be confirmed for the 2020 and 2021 taxation years.