Randolph Hopkins v. Municipal Property Assessment Corporation, Region 32, 2021 CanLII 74739

Tribunals Ontario

Tribunaux décisionnels Ontario

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: August 12, 2021

FILE NO.: WR 172192

Assessed Person(s): Randolph Wayne Hopkins

Appellant(s): Randolph Hopkins

Respondent(s): Municipal Property Assessment Corporation, Region 32

Respondent(s): Municipality of Greenstone

Property Location(s): 21 Peter Drive

Municipality(ies): Municipality of Greenstone

Roll Number(s): 5876-780-001-56904-0000

Appeal Number(s): 3423565 and 3449337

Taxation Year(s): 2020 and 2021

Hearing Event No.: 747591

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

APPEARANCES:

Parties

Representative

Randolph Wayne Hopkins

Self-represented

Municipal Property Assessment Corporation

Tom Whalley

Municipality of Greenstone

No one appeared

HEARD: July 13, 2021 by telephone conference call

ADJUDICATOR(S): Subuola Awoleri, Member

DECISION

OVERVIEW

1Randolph Hopkins (the “Appellant”), the owner of 21 Peter Drive (the “Subject Property”), appealed the 2020 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. Pursuant to s. 40(26) of the Act, the Appellant is deemed to have brought the same appeal in respect of the 2021 taxation year.

2The Appellant argued that the Subject Property’s current value assessment (“CVA”) should be $373,000. The Municipal Property Assessment Corporation (“MPAC”) assessed the Subject Property at $499,000 for the 2020 taxation year, however, it requested that the Board confirms its opinion of value at $464,000 for the 2020 and 2021 taxation years.

Issues for the Hearing

3The issues to be determined are:

1. What is the correct current value of the Subject Property for the 2020 and 2021 taxation years?

2. Should there be an equitable reduction of the current value pursuant to s. 44(3)(b) of the Act, and, if so, what should the amount of this reduction be?

Result

4The Board finds that the correct current value of the Subject Property is $335,000 (rounded) for the 2020 and 2021 taxation years.

5The Board finds that this assessment at current value is equitable with the assessments of similar lands in the vicinity, and therefore no further reduction is required to achieve equity.

6The Board reduces the assessment of the Subject Property from $499,000 to $335,000 (rounded) for the 2020 taxation year and from $464,000 to $335,000 for the 2021 taxation year.

ANALYSIS

Description of the Subject Property

7The Subject Property is a one and half single-family detached dwelling located on water, built in 2000, located in the Municipality of Greenstone. It has a lot with 150.1 ft of effective frontage, 406.29 ft. of effective depth for an effective site area of 1.4 acres. It has a total building area of 1,951 square feet (“sq. ft.”), with construction quality of 7.0 and a basement area of 911 sq. ft. of which 683 sq. ft. is finished. It has a detached garage of 1,824 sq. ft. built in 2001.

Issue 1 - What is the correct current value of the Subject Property for the 2020 and 2021 taxation years?

8In 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 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.

9The 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.

10The Board finds the current value of the Subject Property for the 2020 and 2021 taxation years to be $335,000 (rounded).

Proposed Comparable Properties

11MPAC presented the Board with six proposed comparable property sales, all located on water. The details of MPAC’s proposed comparable property sales are provided in Table 1 below.

Table 1

Address

Assessment $

Sale Date & Sale Amt. ($)

Time/ Adjusted Sale ($)

Building/ Size (sq. ft.)

Lot Size (Acres)

Year Built/ #of Floors

Quality of Construction

Subject Property

21 Peter Drive

$464,000

N/A

N/A

1,951

1.4

2000/ 1½ storeys

7.0

Sale 1

27 Macintosh Road

333,000

April 2016 (368,000)

367,991

2,236

1.43

1985/ 1½ storeys

5.0

Sale 2

29 Macintosh Road

280,000

July 2015 (302,000)

302,986

1,546

1.18

2012/ 1½ storeys

6.0

Sale 3

22 Camp 25 Road E

333,000

July 2012 (300,000)

342,156

1,789

0.83

1997/ 2 storeys

7.0

Sale 4

21 Macintosh Road

326,000

November 2012 (285,000)

317,127

1,344

1.39

1988/ 1 storey

6.5

Sale 5

11 Macintosh Road

275,000

July 2014 (265,000)

271,585

1,344

1.26

1998/ 1 storey

6.0

Sale 6

230 Bass Lake Road

471,000

November 2013 (473,000)

497,123

1,676

0.39

2012/ 2 storeys

6.5

12MPAC submitted that the best comparable property sale is Sale 6. MPAC used the time adjusted sales price of Property Sale 6 at $497,123 and made a 5% downward adjustment that was applied to the Subject Property for its lack of access to hydro, which provides $472,150. MPAC testified that it further applied a downward adjustment of $6,500, for the Subject Property having one less bathroom than Property Sale 6, which provides a value of $465,560. MPAC submitted that this value is in line with its opinion of value of $464,000, therefore the Board should confirm the current value of the Subject Property at $464,000.

13The Board finds that MPAC’s Property Sales 3, 4, 5 and 6 are too far removed from the valuation date of January 1, 2016. The sales dates range from July 2012 to July 2014. These proposed 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 further a sale is from the valuation date, the less likely it reflects the market on the valuation date. It is also the practice of the Board not to rely on sales outside the shoulder years, if there are market tested sales within the shoulder years.

14The Appellant presented the Board with two proposed comparable property sales. Although he did not use these two sales to make submissions on the current value of the Subject Property, rather, he testified that these two property sales indicate the range of the purchase price of similar properties without hydro, like the Subject Property within the municipality. The first property is 11 Peter Drive. The Appellant testified that this property is the best comparable property to the Subject Property, since they are both on the same street and this property also does not have access to municipal services like the Subject Property. This property sold November 26, 2019 for $250,000. The second property - 23 Peter Street, sold October 2019 for $219,900. The Appellant testified that this property is similar to the Subject Property since it is also a log home.

15The Board finds that these two property sale dates are outside the shoulder years of the valuation date of January 1, 2016. Therefore, cannot be used to determine the current value of the Subject Property. The Board notes that MPAC objected to the use of the Appellant’s property sales for being too far removed from the valuation date of January 1, 2016, however, MPAC also presented four proposed comparable property sales that were too far removed from the valuation date of January 1, 2016.

16The Appellant submitted that the current value of the Subject Property should be $373,000, which he argued to be the correct phase-in amount of the Subject Property for the 2020 taxation year. The Board finds this argument contrary to the definition of current value in the Act.

17In determining the correct current value of the Subject Property, the Board used MPAC’s proposed comparable property Sales 1 and 2. They both sold within the shoulder years of the valuation date of January 1, 2016. These properties are also the closest comparable properties to the Subject Property, presented by MPAC.

18MPAC’s proposed comparable Property Sale 1 is a 1 ½ storey structure similar to the Subject Property. Its site area of 1.43 acres is also similar to the Subject Property. It was built in 1985, with a lower quality of construction of 5.0 and no basement area, however, its structure of 2,236 sq. ft. is larger than the Subject Property. The inferior features of this property are accounted for in its larger building area, an additional attached garage, a shed and the availability of hydro, making this property sale relatively comparable to the Subject Property. The Subject Property does not have hydro. MPAC acknowledged this by providing the Subject Property with a 5% downward adjustment. The Appellant argued that MPAC’s downward adjustment should be higher. The Appellant did not provide the Board with any market evidence on the appropriate adjustment. MPAC testified that the 5% downward adjustment was derived by comparing the difference in sale prices of properties with hydro and those without hydro and the difference in price was 5%. None of the parties presented sales of properties without hydro within the shoulder years of the valuation date.

19MPAC’s proposed comparable Property Sale 2 is also a 1 ½ storey structure similar to the Subject Property, built in 2012, with a smaller site area of 1.18 acres and smaller building of 1,546 sq. ft. and a lower quality of construction of 6.0. The inferior features of this property are accounted for in its age, it is two years newer than the Subject Property and the availability of hydro, making this property sale relatively comparable with the Subject Property.

Finding on Current Value

20The average time adjusted sales price of comparable Property Sales 1 and 2, provides a value of $335,488.50. The Board finds that the current value of the Subject Property as of January 1, 2016 for the 2020 and 2021 taxation years is $335,000 (rounded).

Issue 2 - 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.

21Section 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.

22The Assessment to Sales Ratio (“ASR”) is a tool often used to determine if a reduction in the assessment below current value is required to make an assessment equitable with the assessments of similar lands in the vicinity. The ASR is determined by dividing the assessment as returned by the Time Adjusted Sale Price (“TASP”).

23The goal of the Act is to determine the correct current value of properties. Any equitable reduction in the current value results in an incorrect current value. Consequently, an equitable reduction should only be made where there is clear evidence to support that such a reduction is warranted. In this regard, the burden of proof rests with the party that alleges that it would be inequitable to assess the Subject Property at its current value, and in this appeal is the Appellant. The Appellant has to establish, on a balance of probabilities, that an equitable reduction is required.

24The Appellant did not present any evidence on the appropriate reduction based on equity. MPAC presented an equity analysis of 30 property sales comprising of single-family dwelling on water and seasonal/recreational dwelling on water, which MPAC testified has a median ASR of 0.974. MPAC argued that its standards indicate that equity is achieved if the median ASR falls between 0.95 and 1.05, which is in line with the International Association of Assessing Officers standards, which states that the median ratio should fall between 0.90 and 1.10. MPAC submitted that this indicates that similar properties in the vicinity are being assessed at or near their current values and therefore, an equitable reduction of the correct current value is not required.

25The Board finds that there is no evidence 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.

26The Board determines that the correct current value of the Subject Property is $335,000 (rounded) with no equitable adjustment necessary.

CONCLUSION

27The Board determines that the current value of the Subject Property is $335,000 (rounded) for the 2020 and 2021 taxation years.

ORDER

28The Board orders that the assessment of the Subject Property is reduced from $499,000 to $335,000 (rounded) for the 2020 taxation year and from $464,000 to $335,000 (rounded) for the 2021 taxation year.