Tribunals Ontario

Tribunaux décisionnels Ontario

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: August 09, 2021

FILE NO.: WR 169943

Assessed Person(s): George Czeslaw Rosiecki

Appellant(s): George Czeslaw Rosiecki

Respondent(s): Municipal Property Assessment Corporation Region 15

Respondent(s): City of Mississauga

Property Location(s): 1384 Rock Court

Municipality(ies): City of Mississauga

Roll Number(s): 2105-020-043-18700-0000

Appeal Number(s): 3419742 and 3445157

Taxation Year(s): 2020 and 2021

Hearing Event No.: 742899

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

APPEARANCES:

Parties	Representative
George Rosiecki, Barbara Kay Zendel Rosiecki	Self-represented
City of Mississauga	Gary Leung (observed only)
Municipal Property Assessment Corporation	George Kaldenbach

HEARD: March 30, 2021 by telephone conference call

ADJUDICATOR(S): Caroline King, Vice-Chair

DECISION

OVERVIEW

1George Czeslaw Rosiecki and Barbara Kay Zendel Rosiecki, (the “Appellants”) filed a 2020 appeal asserting the Municipal Property Assessment Corporation (“MPAC’s”) assessed value was too high for their residential property located at 1384 Rock Court, Mississauga (the “Appellants’ Property”). The parties agree that the Appellants’ semi-detached house is similar in size, age, and quality to other nearby semi-detached houses, and that the Appellants’ lot size is unique and approximately three times larger than the lot sizes for these other houses. At issue was how to assess the current value of the Appellants’ Property as there are no sales of any semi-detached houses in the vicinity with a similarly large lot size.

2The assessed value for the Appellants’ Property is $716,000. At the hearing, MPAC asserted that the current value of the Appellants’ Property was $982,000, much higher than the assessed value. MPAC calculated the current value by notionally dividing the properties into two parts and adding the one part (constituting the house and the portion of the lot that is comparable in size to other similar sale properties) with the other part (the remaining portion of the Appellants’ lot. The Appellants’ contested MPAC’s approach and argued that it did not reflect market treatment of large properties, and further than the additional land was of poor quality and not of significant value.

3As the 2020 appeal was not resolved before March 31, 2021, the Appellants were deemed to have brought the same appeal in respect of the 2021 taxation year. This decision will resolve both appeals.

Issues for the Hearing

4At issue in this proceeding is:

1. What is the best approach to determining the correct current value for the Appellants’ semi-detached residential property when there is a high degree of similarity in nearby semi-detached residential properties but for the anomalously large lot size? Is it an appropriate approach to notionally divide the property into two when approaching this residential assessment?

2. The determination of the current value of the subject property; and

3. Whether a reduction in the current value should be made to reflect equitable assessment regarding the assessment of similar properties in the vicinity.

Result

5The best approach to determining the correct current value for this semi-detached residential property with a high degree of similarity with nearby semi-detached residential houses but for the anomalously large lot size, is not to notionally divide the property in two and value the additional (or excess) land separately. Rather it is to include evidence regarding how the market treats unusually large residential lots.

6The current value of the Appellants’ Property is $585,000 for the 2020 and 2021 taxation years.

7No reduction in the current value is required to reflect equitable assessment.

ANALYSIS

Description of Subject Property

8The Appellants’ Property consists of a 1,312 square foot, three bedroom, two bathroom, 1960 built semi-detached house situated on a 0.29-acre lot. The Appellants’ house is similar to other houses nearby, except that those other houses are situated on lots that are 0.09 of an acre, which is 0.20 of an acre smaller than the Appellants’ lot. MPAC and the Appellants agree that MPAC’s proposed comparable sale properties (Property #1-4) are all inferior to the Appellants’ Property.

9The Appellants’ lot is located at an end of a cul-de-sac. It is shaped like an irregular pentagon (it has five sides, each of different lengths). The shortest side of the lot is 23.17 feet and this is the only side that abuts a street. All other sides of the lot abut other residential properties. The depth of the property is 143.38 feet and is, in general, wider at the back than at the front. The lot size and shape is likely a by-product of the plan of subdivision rather than an intentional feature.

10The parties agree that there is no other semi-detached house similar to the Appellants’ house on a similarly sized and shaped lot anywhere in the municipality. There was no dispute regarding MPAC’s Time Adjustment Factors.

MPAC’s Approach to Value

11MPAC’s approach to value was to notionally divide it the valuation process into two parts:

a. The first step was to determine a value of the Appellants’ semi-detached house and a portion of the Appellants’ lot (0.09 of an acre) so that it would be directly comparable to the other nearby semi-detached houses which each had a 0.09 of an acre lot;

b. The second step was to determine a value for the remaining 0.20 acre portion of the Appellants’ lot based on the values of vacant land. in a nearby, but different neighbourhood.

12The value of these two parts was then added together to determine the total current value of the Appellants’ Property.

13MPAC presented information about the sales of four properties as part of its direct comparison approach. (These properties are referred to as MPAC Property 1, Property 2, Property 3, and Property 4. Details for these properties are set out in Table 3 below). Each of MPAC’s four comparable sale properties are all two-storey semi-detached residential houses all located on lot sizes 0.09 of an acre. The year built for these properties range from 1958 – 1960 with total size ranging from 1,299 square feet – 1,312 square feet. The time adjusted sale for these properties range from $462,638 to $550,348. The most significant difference between these four properties and the Appellants’ Property is the lot size of the Appellants’ Property which is 0.29 acres (0.20 acres larger compared to the other four properties).

14The Appellants’ Property was assessed at $716,000 by MPAC’s mass appraisal system. In preparation for this hearing, MPAC conducted a single appraisal of the Appellants’ Property and prepared a valuation report that resulted in an opinion of current value for the years under appeal of $982,000. As discussed above, MPAC determined the value of the Appellants’ Property in comparison to similar houses situated on 0.09 of an acre lots, and then referencing a value per square foot based on two vacant lots arrived at a value for the remaining 0.20 of an acre portion of the Appellants’ lot size. Specifically, MPAC’s argued that $982,000 is the correct current value of the Appellants’ Property based upon:

a. $477,056.32 for the Appellants’ house and a 0.09 of an acre portion of their lot (based on the average time adjusted square foot calculations); plus

b. $505,296 for the remaining 0.20 of an acre portion of their lot (based on square foot value of vacant lots from different neighbourhoods).

Appellants’ Response

15The Appellants’ argued that MPAC’s methodology did not reflect the operation of the market and that it resulted in double assessment placing an excessive value on poor quality land. The Appellants did not contest the Time Adjustment Factor set out in Appendix B of MPAC’s report.

Issue 1 - What is the best approach to determining the correct current value for the Appellants’ semi-detached residential property when there is a high degree of similarity in nearby semi-detached residential properties but for the anomalously large lot size? Is it an appropriate approach to notionally divide the property into two when approaching this residential assessment?

16There is no question that assessing his property with its large unusually shaped lot is a challenge, and that assessment is not a precise science. Rather it is an exercise in making the best estimate possible of how the market would treat the Appellants’ Property if sold by a willing seller to a willing buyer on the valuation date of January 1, 2016.

17Neither the Assessment Act, nor its regulations direct the Board as to which assessment approach should be applied for any type of case, determining the correct approach to be applied in each case in a question of fact for the Board to determine Municipal Property Assessment Corp. v. Inmet Mining Corp., 2002 CanLII 7325 (ON SCDC),

18Therefore, a careful consideration of MPAC’s approach was made in order to determine the correct approach to be used in this case. I reviewed:

a. the evidence regarding the sale of vacant lots proposed by MPAC;

b. market treatment of residential properties with detached houses and varying lot sizes; and then

c. compared MPACs proposed current value for the Appellants’ Property to a property sold in the same neighbourhood with a large lot size and detached house.

Vacant lots considered

19I considered the evidence for the vacant lots to determine whether the vacant lots provide a reliable source of information regarding the value of the additional (or excess) lot size of the Appellants’ Property.

20The first challenge to comparing the Appellants’ lot to the vacant lots is that MPAC agreed at the hearing that its selected vacant lots were located in a different, superior neighbourhood in transition unlike the Appellants’ Property neighbourhood.

21The second challenge to compare the Appellants’ lot with these vacant lots, is the Appellants’ uncontested evidence about the character of the lot which included uneven topography, drainage issues, an unusual lot shape with little street frontage, and the general poor quality of the Appellants’ lot. There was no specific evidence before me that the vacant lots had similar issues and I find it likely that the Appellants’ lot is overall of poorer quality than the vacant lots.

22The third challenge to comparing the Appellants’ lot with these vacant lots include matters related to the Appellants’ semi-detached house, the size, shape, topography, and drainage issues. I find that the Appellants’ lot (or back 0.20 portion of the lot) is distinct in character and nature from the vacant lots and is therefore not comparable. This finding is based on:

a. Issues arising from the Appellants’ semi-detached house, including building code issues, zoning issues, and required set-backs;

b. The narrow 23.17 street frontage (with all other sides of the Appellants’ lot abutting other properties);

c. Site topography (and changes in elevation) and drainage issues, and the likely impact these matters will have on any additional use and/or development of the Appellants’ lot.

23In general, it is likely that the development of MPAC’s vacant lots is not limited/restricted compared to the Appellants’ lot in its current state.

24Based on the fact the vacant lots were in a superior neighbourhood, superior in quality, and superior in lot use and/or development value, I find that the Appellants’ lot is significantly inferior to the vacant lots and that therefore they are not comparable.

Comparison of market treatment of detached houses and their respective lot sizes

25The Appellants’ Property is unique in the municipality for lot size for semi-detached houses, consequently there is no evidence of market treatment of residential properties with semi-detached houses with varying lot sizes. The only evidence before me regarding market treatment of nearby residential houses with significant difference in lot sizes was the Appellants proposed comparable properties #13 and #14 (referred to as Property #13 and Property #14, detailed in Table 1). Both of these comparable properties have detached houses located on them. In general, detached houses have a higher value than semi-detached properties.

26To test MPACs theory that the market would place a high value on the Appellants’ large lot size, I compared the value the market placed on two properties both with varying lot sizes and both with detached houses.

27To determine the Time Adjusted Sale prices for Property #13 and #14, I multiplied the sale price of the properties with the uncontested Time Adjusted Factors (“TAF”) set out by MPAC.

28Property #13 has a time adjusted sale amount of $744,600 ($680,000 sale price x 1.095 TAF). It has a lot size of 6,040 square feet, with a slightly larger, 10 years newer and generally superior house to Property #14.

29Property#14 has a time adjusted sale amount of $648,000 ($600,000 sale price x 1.080 TAF). It has a lot size of 16,117 square feet which is more than 2.6 times larger than Property #13. This evidence was the best (and only) evidence before me regarding market treatment of residential properties (with existing houses) located in Appellants’ A97 area.

30While the houses located on Property #13 and #14 are different, they are not so different as to prevent a meaningful comparison of the market treatment regarding varying lot sizes. For ease of reference, data for these properties is set out in the Table 1 below.

Table 1

	Appellants’ Proposed Sale Property # 13	Appellants’ Proposed Sale Property # 14
Address	2784 Tallberg Ct	2755 Bushland Cres.
Site Area	4,953 sq ft	16,117 Sq ft
Frontage	43.1 ft	43.79 ft
Year built	1973	1963
Quality of Construction	6	6
Heat type	Forced air	Forced air
Stories	2	2
Baths	2.5	1.5
Bedrooms	4	3
Building total area sq ft	1,574 sq ft	1,463 sq ft
Sale date	June 15	July 15
Time Adjusted sale amount (based on MPAC’s Time Adjustment Factor)	$744,600	$648,000

31If MPAC’s two step approach is valid, (calculating the additional lot size based on the square foot value of vacant lots and adding it to the a value of the house and lot size of the comparable property), then it is expected that, at the very least, the time adjusted sale value for the much larger lot sized property would be, at the very least, the same as a property 2.6 times smaller. Yet, the Property #13 with the much smaller lot size sold for more money.

32I find that data regarding the Appellants’ proposed comparable Properties #13 and #14 to provide evidentiary support that MPAC’s approach to valuing the Appellants’ Property is not consistent with market valuation. As the object of the assessment process is to estimate how the market would value a property if it were sold by a willing seller to a willing buy on the valuation date, I find that MPACs approach is not supported by market treatment of Property #13 and Property #14.

33As the flexibility of additional use and development for residential properties with detached houses is likely higher than the flexibility of the Appellants gaining extra additional use and/or development for their irregularly shaped, poor quality land with a semi-detached house, if the market data doesn’t support MPAC’s approach for lots with detached houses on it, then it isn’t likely to support MPAC’s approach for the Appellants’ lot with a semi-detached house on it.

Comparison of the Appellants’ Property with a semi-detached house to Property#14 with a detached house

34While the Appellants’ Property with a semi-detached house on it is not directly comparable to Property#14 as it has a detached house on it, it is the only evidence of a residential property with a similarly large lot size with which I can compare the Appellants’ Property. This provides an additional test to consider the reliability of MPAC’s approach regarding the two-step valuation of the Appellants’ Property.

35For ease of reference Table 2 sets out details for the two properties.

Table 2

	Appellants’ Property	Property 14
Address	1384 Rock Crt	2755 Bushland Rd
Description	Semi-detached residential	Detached residential
Assessed value	$716,000	$871,000
Site Area acres	0.29 acres 12,632 sq feet	0.37 ACRES 16,117 Sq ft
Frontage	23.17 ft	43.79 ft
Year built	1960	1963
Quality of Construction	6	6
stories	2	2
baths	2	1.5
bedrooms	3	3
Building total area sq ft	1,312 sq ft	1,463 sq ft
Sale date	n/a	July 2015
Time Adjusted sale amount	n/a ($982,000 was MPAC’s proposed current value)	$648,000

36I find that the Property #14 is superior to the Appellants’ Property as it has a detached house that is 151 square feet larger than the Appellants’ house, with a 0.08 acre larger lot size than the Appellants’ lot with significantly larger street frontage (43.79 ft compared to 23.17).

37If MPAC’s proposed approach were to be supported by the market evidence, then MPAC’s proposed $982,000 current value of the Appellants’ Property should be less than the market treatment of Property #14 which was sold in July 2015.

38However, despite the larger lot size of Property #14, it only sold for $600,000 in July 2015, approximately 6 months before the valuation date. When I apply the undisputed Time Adjusted Factor to this price, the Time Adjusted Sale Value of Property #14 is $648,000.

39MPAC’s valuation for the Appellants’ Property is 40.98% (or $334,000 dollars more) higher than superior Property #14 which has a significantly bigger lot. I find this is further evidence that the market would not value the Appellants’ Property according to MPAC’s proposed approach/methodology.

40Further, I find it highly implausible that MPAC’s $505,296 value for the back .20 acres of the Appellants’ Property (for which there is no direct street access, and for which it was undisputed that there were elevation changes, and drainage issues) should exceed MPAC’s $477,056.32 attributed value of the Appellants’ house and 0.09 acre of the Appellants’ lot.

41The Appellants’ Property lot size is large, but also largely unusable. Not only are the vacant lots not comparable (in area, quality, accessibility, and potential), and therefore not a good indicator of market value, but also the evidence before me indicates that the market treatment of varying sizes of property does not reflect the approach employed by MPAC to notionally divide the property into two halves. Where there is one attribute which according to one party (MPAC in this case) is a significant driver of value, it is important that comparable properties include a property with that attribute for consideration. In this case, that means a residential house in the same neighbourhood with a large lot size. While Property #14 is superior to the Appellants’ Property, it provides an important reference point in considering the value of the Appellants’ Property.

Findings - Issue 1

42I find that MPACs approach to valuing the Appellants’ Property is critically flawed as it is based on an assumption of how the market treats large residential lots which is not supported by the market evidence.

Burden of Proof

43There are problems with the evidence before me, I am not satisfied that MPAC has met the burden of proof. Likewise, there are challenges with the Appellants’ evidence. I have disregarded all of the Appellants’ suggested comparable properties where there was no recent sale (because there was no recent evidence of market treatment), and where the sale was outside the shoulder years of the valuation date of January 1, 2016 (because the farther away a sale is from the valuation date, the greater the chance is that the sale data may not reflect the market treatment of similar properties on the valuation date as markets change), and where the property was a one story house instead of a two story house.

44Even when MPAC does not meet the burden of proof, the Board is required to determine the current value of a property pursuant to sections 40(19) and 44(3) of the Assessment Act based on the evidence before it. Municipal Property Assessment Corporation v. Zarichansky, 2020 ONSC 1124.

Issue 2 - Determining the Current Value of the Appellants’ Property

45It is clearly preferable that I have evidence of a similar semi-detached property with a similar size lot to the Appellants’ lot to determine the current value of the Appellant’s Property, but I do not have that evidence. I am required to establish the current value based on the evidence before me.

46After determining that MPAC’s approach to assessing this property is flawed, I find that the appropriate approach to valuating the Appellants’ Property is the direct sales comparison approach.

47As there are no directly comparable properties in this case, I will find the probable range of the Appellants’ Property’s current value based on a direct sales comparison of properties inferior to the Appellants’ Property and a property superior to the Appellants’ Property. This bracketing approach is a tested and recognized approach of determining current value. For ease of comparison, see Table 3 below:

Table 3

	Appellants’ Property	MPAC Property1	MPAC Property2	MPAC Property3	MPAC Property4	Appellants’ Property 14
Address	1384 Rock Crt	2399 Brookhurst Rd	1401 Buckby Rd	2576 Constable Rd	2562 Constable Rd	2755 Bushland Cres.
Description	Semi-detached residential	Semi-detached residential	Semi-detached residential	Semi-detached residential	Semi-detached residential	Detached residential
Assessed value	$716,000	$437,000	$444,000	$479,000	$518,000	$871,000
Sale date	n/a	2015/02/02	2016/06/03	2015/08/04	2015/05/14	July 2015
Time Adjusted sale amount	n/a	$462,638	$484,283	$503,374	$550,348	$648,000
Site Area acres	0.29 acres 12,632 sq feet	0.09 acres	0.09	0.09	0.09	0.37 ACRES 16,117 Sq ft
Frontage	23.17 ft	Not provided	Not provided	Not provided	Not provided	43.79 ft
Year built	1960	1958	1960	1960	1960	1963
Quality of Construction	6	6	6	6	6	6
stories	2	2	2	2	2	2
baths	2	1	1.5	2	1.5	1.5
Building total area sq ft	1,312 sq ft	1,312	1,299	1,299	1,299	1,463

48I agree with MPAC that, all other things being comparable, the market would place some value on the larger size of the Appellants’ lot compared to other similar semi-detached properties and find therefore that Properties 1-4 are inferior the Appellants’ Property. I find that the Appellants’ Property is superior to all the Properties 1-4 based on its large lot size, which at the very minimum provides a larger area for private use.

49I find that the probable range of current value of the Appellants’ Property must lie between the $550,348 Time Adjusted Sale value of inferior Property #4 (which has the highest sale value of all the inferior properties) and the $648,000 Time Adjusted Sale Value of the superior Property #14.

50Property #14 is clearly superior to the Appellants’ Property in lot size, frontage, and as Property #14 is a detached house and not a semi-detached like the Appellants’ house.

51I find it likely that the current value of the Appellants’ Property is somewhat closer to the highest value for the inferior properties than that of the superior Property #14. Even though the Appellants’ Property has a much larger lot size compared to the inferior properties, the quality and use of much of the Appellants’ lot is negatively impacted by the drainage issues, changes in elevation, and lack of access to the back portions of it. As I have stated, while the Appellants’ lot size is large, it is largely unusable.

Findings - Issue 2

52Based on the evidence before me and bracketing the current value between the inferior properties and the superior property, I find that it is likely that the current value of the property for the January 1, 2016 valuation date is therefore $585,000.

Issue 3 - Equity

53The Appellants’ arguments at the hearing were focused on the determining the correct current value of the property, not equity. The Appellants indicated that if their property was valued appropriately, no adjustment for equity was required.

54I considered the evidence before me which included an MPAC equity analysis which compared the assessments of twenty-nine semi-detached residential properties that sold between January 1, 2015 to December 31, 2016 all located within 0.4 kilometers of the Appellants’ Property.

55While there are some variations of the range of assessments and their respective sale ratios, based on the evidence before me, I find that the scope of the data provided by MPAC provides the best evidence before me regarding equity.

56The level of appraisal is within the target level of appraisal. The result of the analysis indicates that, among the twenty-nine properties used in MPAC’s sample, the median Assessment to Sale Ratios was 0.952. This is within the target level of assessment of 0.95 - 1.05 which means that similar properties in the vicinity have been assessed at or near their current values.

Findings - Issue 3

57I therefore find that when reference is made to the assessment of similar lands in the vicinity, the evidence does not support any adjustment for the purpose of equity.

CONCLUSION

58I find MPAC’s approach to valuing the Appellants’ Property is problematic and critically flawed. There was no market based evidence before me which supported notionally dividing the property into two and carrying out a separate valuation for the back 0.20 acres of the Appellants’ lot based on vacant lots and adding it to the value for the Appellants’ house and front 0.09 acre of their lot.

59Where it is perceived that there is one feature of a property which is the primary driver of value, evidence should be provided which includes a comparison property with that attribute. In this case, that meant including sales evidence regarding a property with a comparably large lot size.

60Notwithstanding the evidentiary challenges with both parties’ evidence, I was satisfied that there was sufficient evidence for me to determine a range of values by bracketing the value of properties inferior to the Appellants’ Property and a property superior to the Appellants’ Property.

ORDER

61The Board orders that the assessment of $716,000 for the Appellants’ Property is reduced to the current value of $585,000 for the 2020 and 2021 taxation years.