Peter Allwyn Lobo and Werrel Pauline D’Souza v. Municipal Property Assessment Corporation Region 9, 2021 CanLII 80774

Tribunals Ontario

Tribunaux décisionnels Ontario

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: August 27, 2021

FILE NO.: WR 171843

Assessed Person(s): Peter Allwyn Lobo and Werrel Pauline D’Souza

Appellant(s): Peter Lobo and Werrel D’Souza

Respondent(s): Municipal Property Assessment Corporation Region 9

Respondent(s): City of Toronto

Property Location(s): 7 Grenville Street, Unit 2505

Municipality(ies): City of Toronto

Roll Number(s): 1904-068-060-02524-0000

Appeal Number(s): 3432556 and 3442144

Taxation Year(s): 2020 and 2021

Hearing Event No.: 747975

Legislative Authority: Sections 33 and 40 of the Assessment Act, R.S.O. 1990, c. A.31

APPEARANCES:

Parties	Representative
Peter Allwyn Lobo and Werrel Pauline D’Souza	Peter Allwyn Lobo
Municipal Property Assessment Corporation	Ryan DeSousa
City of Toronto	No one appeared

HEARD: June 28, 2021 by telephone conference call

ADJUDICATOR(S): Jennifer Griffith, Member

DECISION

OVERVIEW

1Peter Allwyn Lobo and Werrel Pauline D’Souza the (“Assessed Persons/Appellants”) are the owners of 7 Grenville Street, Unit 2505 (the “Subject Property”) in the City of Toronto (the “City”). The Appellants filed appeals for the omitted assessment of $537,000 for the 2020 taxation year and returned assessment for the 2021 taxation year with the Assessment Review Board (the “Board”), pursuant to s. 33 and 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”) returned current value assessment of $537,000 is too high and that the correct current value should be no more than $508,047 (rounded) based on the sale of the Subject Property on September 20, 2019. MPAC takes the position that the correct current value should be $569,000 based on sales evidence. However, MPAC is not seeking an increase in assessment and is asking to have the returned assessment of $537,000 confirmed.

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 Appellants assert that an equity reduction is required and that the equitable value should be $514,710 (or $514,000 rounded) based on the returned assessments of four proposed comparable properties. This value is an alternate approach to value based on equity. However, the Appellants argue that the value should not exceed $508,047 (rounded) based on the sale price of the Subject Property.

Issues for the Hearing

6The issues to be determined on this appeal are:

1. A determination of the current value of the Subject Property for the 2020 and 2021 taxation years. Should it be based on:

a. The Sale of the Subject Property on November 20, 2019; or

b. The Direct Comparison Approach; and

c. Negative Impacts on the value of the Subject Property.

2. 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 $537,000 as of the valuation date January 1, 2016, which is applicable to the 2020 and 2021 taxation years.

8The Board also finds that an equity reduction pursuant to s. 44(3)(b) is not required.

9Therefore, the Board orders that the s. 33 omitted assessment of $537,000 be confirmed for the 2020 taxation year and the s. 40 returned assessment of $537,000 be confirmed for the 2021 taxation year.

ANALYSIS

Issue 1 - A determination of the current value of the Subject Property for the 2020 and 2021 taxation years

10In 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”.

11For the reasons discussed below, the Board finds the correct current value is $537,000 for the 2020 and 2021 taxation years.

12The Appellants provide evidence based on their own purchase of the Subject Property in 2019. Reviewing the following evidence presented in support of current value, the Board finds that MPAC presents the best evidence based on the Direct Comparison Approach.

Issue 1a - The Sale of the Subject Property on November 20, 2019

13The Appellants submit that the value of the Subject Property on the valuation date of January 1, 2016 should be determined by reference to the price that the Appellants paid to purchase the property on November 20, 2019.

14MPAC submits that this was not an arm’s length sale, and therefore, cannot be used to determine current value.

Appellants’ Evidence in support of current value

15In support of current value, the Appellants present the sale of the Subject Property on November 20, 2019 for a sale price of $508,047 (rounded) and in support of their argument the Appellants present a copy of the following documents:

I. Land Transfer (LRO #80) receipted as AT5299065 on November 20, 2019 showing that the Transferor is 454 YONGE GP INC. and the Transferees are Werrel Pauline D’Souza and Peter Allwyn Lobo with a stated value of $508,047 (rounded) and that the signed transfer document was submitted by Gurpreet Kaur Patheja, Barrister & Solicitor for the Transferees.

II. Canada Revenue Agency (“CRA”) – NOTICE OF (RE) ASSESSMENT, goods and services tax/harmonized sales tax (gst/hst) rebate application dated March 30, 2020. The document shows the rebate amount of $24,126.23 and the notice was sent by Bob Hamilton, Commissioner of Revenue.

III. TARION – Certificate of Completion and Possession/Warranty Certificate (for Freehold and Condominium Units). The document shows the Final Purchase Price is $499,027, registered owners are Werrel Pauline D’Souza and Peter Allwyn Lobo, the warranty date is January 28, 2019 and signed January 3, 2019 by the Vendor (signature not legible).

16The Appellants argue that the Land Transfer document listed above supports the sale price of $508,047 (rounded) for the Subject Property and that the CRA recognized the sale price of the Subject Property as “Fair Market Value” because the tax rebate was calculated based on the sale price.

17The Appellants also argue that the TARION Certificate issued by the vendor above shows a value of $499,027 which is lower than the returned assessment of $537,000 for the Subject Property.

18Based on the above evidence, the Appellants are of the view that the current value should be the sale price of $508,047 for the Subject Property, which occurred on November 20, 2019.

MPAC’s Evidence

19MPAC’s Representative argues that the sale of the Subject Property on November 20, 2019 for a sale price of $508,047 (rounded) is not an open-market sale and that the sale was purchased directly from the builder.

20MPAC’s Representative argues that the sale of the Subject Property occurred in November 2019, well outside the valuation date of January 1, 2016 and is not reflective of sales transactions in the open market as shown below on MPAC’s Sales Analysis. Therefore, the Subject Property’s sale in 2019 was not relied on for the determination of current value.

21MPAC’s Representative also argues that the builder’s sale of the Subject Property had limited exposure to the open market because it was not listed on Multiple Listing Service (“MLS^®”). Therefore, the sale of the Subject Property was not relied on for the determination of current value. In support of his argument that the sale of the Subject Property was a builder’s sale with limited exposure, MPAC’s Representative cited McCallum v. Municipal Property Assessment Corp. Region No. 09, [2010] O.A.R.B.D. No. 419 at paragraph 22.

Findings on the Sale of the Subject Property

22The Board finds that the sale of the Subject Property does not provide reliable evidence of its current value as of January 1, 2016 for the following reasons:

I. The sale date of November 20, 2019 is too far removed from the valuation date of January 1, 2016 to be a true test of current value. Instead, the Board relies on the open market sales of similar properties presented into evidence, which sold at a higher sale price than the Subject Property;

II. The sale of the Subject Property is a builder’s sale, with a sale price of $508,047 (rounded) which is significantly lower than the current value which the Board finds to be $566,000, based on the four most similar comparable properties to the Subject Property. Therefore, the Board finds that sale price of the Subject Property is not reflective of open market sales between a willing buyer and a willing seller, which occurred as of the valuation date of January 1, 2016;

III. The Land Transfer (LRO #80) receipted as AT5299065 on November 20, 2019 confirms that the sale of the Subject Property was a sale transaction between the builder and the buyers (Transferor is 454 YONGE GP INC. and the Transferees are Werrel Pauline D’Souza and Peter Allwyn Lobo). Therefore, the Board finds that the Land Transfer document supports the finding that the sale of the Subject Property was a builder’s sale that was not fully exposed to the open market. This finding is supported by McCallum v. Municipal Property Assessment Corporation, Region No. 09 [2010] O.A.R.B.D. No. 419 at paragraph 22 which states:

The Board did not rely on the sale of the subject properties, because they were not fully exposed to the open market (not listed on MLS) and were purchased directly from the builder for the sale price indicated above…

IV. The Board did not rely on the CRA - NOTICE OF (RE) ASSESSMENT, goods and services tax/harmonized sales tax (gst/hst) rebate application dated March 30, 2020, because this document is in regard to tax rebate and provides no information to assist this Board in its determination of current value; and

V. The Board also did not rely on the TARION – Certificate of Completion and Possession/Warranty Certificate (for Freehold and Condominium Units), because the purpose of this document is as stated (confirm completion, possession and warranty) and provides no information that would assist the Board in its determination of current value.

Issue 1b - The Direct Comparison Approach

MPAC’s Evidence

23The 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.

24MPAC’s Representative, Ryan DeSousa, presents a Valuation Report dated April 20, 2021 and a copy of a Property Assessment Change Notice (“PACN”) dated May 8, 2020 addressed to the Appellants, showing that the Subject Property is a condominium unit built in 2019. The Subject Property was assessed for the first time and the returned assessment value of $537,000 was omitted as of January 1, 2020 pursuant to s. 33 of the Act for the 2020 taxation year.

Change re land omitted from tax roll

33 (1) The following rules apply if land liable to assessment has been in whole or in part omitted from the tax roll for the current year or for all or part of either or both of the last two preceding years, and no taxes have been levied for the assessment omitted:

1. The assessment corporation shall make any assessment necessary to correct the omission.

2. If the land is located in a municipality, the clerk of the municipality shall alter the tax roll upon receiving notice of the change, and the municipality shall levy and collect the taxes that would have been payable if the assessment had not been omitted.

3. If the land is located in non-municipal territory, the Minister shall alter the tax roll upon receiving notice of the change, and shall collect the taxes that would have been payable if the assessment had not been omitted.

25In support of current value, MPAC’s Representative presents six proposed comparable properties, Property Code 370 – Residential Condominium (as the Subject Property), sold in 2016 and located within 0.72 kilometres of the Subject Property.

26MPAC’s Representative provides both the actual and time-adjusted sale prices and relies on the time-adjusted sale prices in his analysis, by utilizing the Direct Comparison Approach to value. The following table is the analysis of the six proposed comparable properties:

MPAC’s Sales Analysis

6 PROPOSED COMPARABLE PROPERTIES	TOTAL BUILDING AREA (sq. ft.)	YEAR BUILT	SALE DATE	SALE PRICE	SALE PRICE (time adjusted)	TAS ADJ. FOR PARKING AND LOCKER WHERE APPLICABLE.	SALE PRICE (adjusted per sq. ft.)
5 St. Joseph Street, Unit 3005	674	2015	2016	$568,000	$527,631	$595,631	$883.73
65 St. Mary Street, Unit 2506	648	2015	2016	$597,000	$572,253	$572,253	$883.11
5 St. Joseph Street, Unit 3305	674	2015	2016	$575,000	$534,133	$545,133	$808.80
5 St. Joseph Street, Unit 2005	674	2015	2016	$548,000	$525,284	$582,284	$863.92
5 St. Joseph Street, Unit 2405	674	2015	2016	$548,000	$515,423	$572,423	$849.29
5 St. Joseph Street, Unit 605	674	2015	2016	$588,000	$556,528	$567,528	$842.03
Median		2015	2016	$571,500	$530,882	$572,338	$856.61
Subject Property	665	2019	2019	$508,047	NIL	NIL	NIL

27Based on the above analysis of the sales of these six proposed comparable properties, MPAC’s Representative is of the opinion that these proposed comparable properties are similar to the Subject Property in terms of size, age, and location. When the average adjusted (for time, parking, and locker) sale price of $856.61 per square feet (“sq. ft.”) is applied to the building area of Subject Property it results in a current value of $569,000 rounded ($856.61 x 665 sq. ft.).

28Based on the evidence, MPAC’s Representative is of the opinion that the current value is $569,000.

Appellants’ Evidence

29The Appellants present no sales of comparable properties to determine current value, based on the Direct Comparison Approach.

Findings on Direct Comparison Approach

30Reviewing the evidence presented in support of current value, the Board finds the best evidence is the four comparable properties which sold in 2016 presented by MPAC. The sale prices were adjusted to the valuation date of January 1, 2016; and adjusted for parking and locker in order to make them similar to the Subject Property.

31These four comparable properties are located at 5 St. Joseph Street, Suite 3005, built in 2015, and sold at an adjusted sale price of $595,631; 5 St. Joseph Street, Suite 3305, built in 2015, and sold at an adjusted sale price of $545,133; 5 St. Joseph Street, Suite 2005, built in 2015, and sold at an adjusted sale price of $582,284; and 5 St. Joseph Street, Suite 2405, built in 2015, and sold at an adjusted sale price of $572,423. These four comparable properties have on average a total building area of 674 sq. ft., are corner units, located on the higher floors (suite ranges from 2005 to 3305) and sold at an average adjusted sale price of $851.43 per sq. ft.

32When the average adjusted sale price per sq. ft. of $851.43 is applied to the building area of 665 sq. ft. for the Subject Property it results in a current value of $566,000 rounded. The Board finds these four comparable properties are similar to the Subject Property in total building area, corner units with open balcony, suites are the higher floors, 0.45 kilometre away and the current value of $566,000 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.

33The Board did not rely 65 St. Mary Street, Unit 2506 because it is located further away (0.72 kilometre), is not a corner unit and it abuts a garbage chute and elevator. The comparable property at 5 St. Joseph Street, Suite 605 was also not relied on because it is located on a lower floor and does not have a balcony. Both of these properties are not comparable to the Subject Property which is a corner unit located on a higher floor.

34The Appellants present no sales of comparable properties to assist the Board in the determination of current value, based on the Direct Comparison Approach.

Issue 1c - Negative Impacts on Value of the Subject Property

35The Appellants testify that the Subject Property is negatively impacted for the following reasons and therefore should receive a negative adjustment:

I. The unit is facing north which the Appellants believe is a less desirable view than comparable properties facing south;

II. The Subject Property’s condominium building has no retail stores which they believe makes their unit less valuable than condominium buildings with retail stores;

III. The neighbourhood streets are noisy and with bright neon streetlights; and

IV. The Appellants are of the view that condominium units on lower floors are less valuable than units on higher floors.

36MPAC’s Representative testifies that the Subject Property receives no negative adjustments for the nuisances cited above and argues that no adjustment is warranted based on sale evidence.

Finding on Negative Impacts on Value of the Subject Property

37Regarding the Appellants’ issues that the Subject Property is negatively impacted by a less desirable view, noisy streets and bright neon lights, lack of retail stores and location of condominium units (e.g. higher or lower floor levels) the Board finds that the Appellants present no factual evidence to quantify the negative impact these nuisances have on the assessed value of the Subject Property. As no quantifiable evidence was adduced to justify a negative adjustment, the Board will make no negative adjustment.

38Based on the evidence, the Board find the current value is $566,000.

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.

39Section 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.

MPAC’s Evidence

40MPAC presents an Equity Analysis Report in which the assessments of 30 similar comparable properties (similar in general nature, character and 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.

41MPAC states that these 30 comparable properties are Property Code 370- Residential Condominium and are similar property type (Residential Condominium) to the Subject Property, sold over the period January 1, 2015 to December 31, 2016 and located within 0.1 kilometre of the Subject Property.

42MPAC states that the analysis of the sales of these 30 comparable properties shows a Level of Appraisal (“LOA”) of 0.962 and a Coefficient of Dispersion (“COD”) of 4.5.

43MPAC 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.

Appellants’ Evidence

44In support of Equity, the Appellants rely on the assessments of four proposed comparable properties (listed on MPAC’s Sales Analysis in support of current value). They are located at 5 St. Joseph Street, Suite 3005, assessed at $494,000; 5 St. Joseph Street, Suite 3305, assessed at $551,000; 5 St. Joseph Street, Suite 2405, assessed at $488,000 and 5 St. Joseph Street, Suite 605, assessed at $522,000. These four proposed comparable properties have an average year built 2015, assessed value of $498,000, total building area of 674 sq. ft and assessed at a value of $738.86 per sq. ft. When this value of $738.86 per sq. ft. is applied to the building area of 655 sq. ft. for the Subject Property it results in an assessed value of $491,000 rounded.

Findings on Equity

45Based 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 and function) as the Subject Property, and located within 0.1 kilometre of the Subject Property. The analysis shows that these 30 sales of similar properties have a LOA (ASR) of 0.962 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.

46The Board rejects the Appellants’ four proposed comparable properties based on the returned assessment, because the sample size is too small to accurately determine equity. The Board prefers the LOA (ASR) because this calculation shows the relationship of assessment to sales for each of the 30 sales which is a much larger sample and therefore a more accurate test of the relationship between the retuned assessments and the current values for properties in the vicinity of the Subject Property.

CONCLUSION

47Based on the evidence, the Board finds the correct current value for the Subject Property at the valuation date January 1, 2016 is $566,000. However, MPAC has not served a notice to seek a higher assessment as required by Rule 28 of the Board’s Rules of Practice and Procedure. Given that MPAC has clearly recommended that it is not seeking an increase for the 2020 and 2021 taxation years, the Board will therefore confirm the returned assessments at $537,000.

48The Board also finds that an equity reduction pursuant to s. 44(3)(b) is not required.

ORDER

49The Board orders that the s. 33 omitted assessment of $537,000 be confirmed for the 2020 taxation year and the s. 40 returned assessment of $537,000 be confirmed for the 2021 taxation year.