Piotr Michno v. Municipal Property Assessment Corporation Region 16, 2021 CanLII 83468

Tribunals Ontario / Tribunaux décisionnels Ontario

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

ISSUE DATE: September 02, 2021

FILE NO.: WR 173092

Assessed Person(s): Piotr Michno, Elzbieta Michno

Appellant(s): Piotr Michno

Respondent(s): Municipal Property Assessment Corporation Region 16

Respondent(s): Township of Tay

Property Location(s): 31 Methodist Island

Municipality(ies): Township of Tay

Roll Number(s): 4353-040-009-49700-0000

Appeal Number(s): 3432578 and 3446385

Taxation Year(s): 2020 and 2021

Hearing Event No.: 751864

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

APPEARANCES:

Parties	Representative
Piotr Michno and Elzbieta Michno	Kinga Michno
Municipal Property Assessment Corporation	David Rose
Township of Tay	No one appeared

HEARD: August 11, 2021 by telephone conference

ADJUDICATOR: Anthony LaRegina, Member

DECISION

OVERVIEW

1The property owner, Piotr Michno (the “Appellant”), represented by his daughter Kinga Michno, filed a property assessment appeal for the 2020 and 2021 taxation years with the Assessment Review Board (the “Board”) regarding his property located at 31 Methodist Island (“Subject Property”) in the Township of Tay (“Township”).

2Pursuant to the provisions of the Assessment Act (“Act”), the Municipal Property Assessment Corporation (“MPAC”) conducted a general reassessment of the Subject Property and determined that its current value assessment was $17,900 and $14,500 for the 2020 and 2021 taxation years respectively. It is the Appellant’s position that MPAC’s current value assessment is too high and that the correct current value assessment should be $10,000 for both years. At this hearing, MPAC takes the position that the current value assessment should be reduced from $17,900 to $14,500 for the 2020 taxation year and should be confirmed at $14,500 for the 2021 taxation year.

3Pursuant to s. 40(11) of the of the Act, the Township is a party to this proceeding. No one attended the hearing on behalf of the Township.

Issues for the Hearing

4The issues in this proceeding are:

1. a determination of the current value of the Subject Property; and
2. whether an equity reduction in the current value should be made to compensate for the assessment of similar lands in the vicinity.

Result

5The Board finds that the correct current value of the Subject Property for the 2020 and 2021 taxation years is $14,500. Pursuant to s. 44(3)(b) of the Act, no equitable reduction is required to compensate for the assessment of similar lands in the vicinity. The Board orders a reduction from the returned assessment value of $17,900 to $14,500 for the 2020 taxation year and a confirmation of the $14,500 returned assessment value for the 2021 taxation year.

Description of the Subject Property

6The Subject Property is a vacant residential/recreational lot on water, located at 31 Methodist Island in the Township of Tay. The Subject Property is an unbuildable waterfront lot on a subdivided island with a frontage of 75.34 feet and a depth of 235.27 feet. The effective site area is 0.41 acres. The lot is located on the west side of the island and has a shallow rocky shoreline.

Area Analysis

7Methodist Island is located in the Township of Tay near Honey Harbour in Georgian Bay. There are cottages located on the south and east sides of the island. Cottages and docks cannot be built on the Subject Property, nor on any other properties on the west side. According to the Township’s Official Plan, the west side of Methodist Island is “subject to flooding events due to its topography, elevation and wave activity.” In addition, no overnight camping is permitted on the west-side lots therefore limiting their potential use to day visits only.

ANALYSIS AND FINDINGS

Issue 1 – A determination of the current value of the Subject Property

8The first issue to be determined on this appeal is the correct current value of the Subject Property for the 2020 and 2021 taxation years. Pursuant to s. 19(1) of the Act, the assessment of land shall be based on its current value. The Act also provides that, for the 2017 to 2021 taxation years, MPAC is required to assess this value as of the valuation day, January 1, 2016 (“current value”). As defined in the Act, “current value means 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.”

9MPAC submitted two exhibits as part of its evidence package, the first is a valuation report and the second is an equity report.

10To determine market value, MPAC utilizes the direct sales comparison approach and submits into evidence the sales of four similar lots all located on the west side of Methodist Island which sold between August 2013 and December 2017. Comparable properties are rarely sold on the valuation day of January 1, 2016, so their sale values are normally time-adjusted to greater or reduced values depending on whether the date of the sale occurred before or after the valuation day. In this case MPAC has not time-adjusted the sale values of the properties on Methodist Island as they are very unique properties with unpredictable sale price fluctuations and as such, the time adjustment details were not possible to document and have been excluded from the valuation report.

Table 1 - MPAC’s Comparable Property Sales

	Subject Property	Property #1	Property #2	Property #3	Property #4	Property #4 - Sale 2
Roll Number	435304000949700	435304000949500	435304000949900	435304000950000	435304000950400	435304000950400
Address	31 METHODIST ISLAND	29 METHODIST ISLAND	33 METHODIST ISLAND	34 METHODIST ISLAND	38 METHODIST ISLAND	38 METHODIST ISLAND
Neighbourhood	I02 - 425	I02 - 425	I02 - 425	I02 - 425	I02 - 425	I02 - 425
Property Code & Desc.	(110) Vacant Residential/ Recreational Land On Water	(110) Vacant Residential/ Recreational Land On Water	(110) Vacant Residential/ Recreational Land On Water	(110) Vacant Residential/ Recreational Land On Water	(110) Vacant Residential/ Recreational Land On Water	(110) Vacant Residential/ Recreational Land On Water
Distance in km		0.0464	0.0437	0.0647	0.1516	0.1516
Valuation
2020 Taxation Year	$17,900	$17,700	$18,000	$18,000	$17,700	$17,700
2021 Taxation Year	$14,500	$14,300	$14,600	$14,500	$14,300	$14,300
Sale
Sale Date		20171208	20130802	20170302	20131106	20170405
Sale Amount		$23,000	$13,800	$9,000	$15,750	$17,500
Site
Effective Frontage (F)	75.34	75.4	78.41	75.3	75	75
Actual Site Area (Acres)	0.41	0.38	0.41	0.41	0.39	0.39
On Site Variable(s)	(10) Unbuildable Lot	(10) Unbuildable Lot	(10) Unbuildable Lot	(10) Unbuildable Lot	(10) Unbuildable Lot	(10) Unbuildable Lot
Waterfront Variable(s)	(X) Subdivided Island, (O) Exposure - West, (A) Waterfront - Lake, (G) Shoreline - Shallow, (D) Shoreline - Rocky	(X) Subdivided Island, (O) Exposure - West, (A) Waterfront - Lake, (G) Shoreline - Shallow, (D) Shoreline - Rocky	(X) Subdivided Island, (O) Exposure - West, (A) Waterfront - Lake, (G) Shoreline - Shallow, (D) Shoreline - Rocky	(X) Subdivided Island, (G) Shoreline - Shallow, (O) Exposure - West, (A) Waterfront - Lake, (D) Shoreline - Rocky	(X) Subdivided Island, (O) Exposure - West, (A) Waterfront - Lake, (G) Shoreline - Shallow, (D) Shoreline - Rocky	(X) Subdivided Island, (O) Exposure - West, (A) Waterfront - Lake, (G) Shoreline - Shallow, (D) Shoreline - Rocky

11MPAC takes the position that 29, 33, 34 and 38 Methodist Island are identical properties to the Subject Property and are all located on the west side of the island with the same restrictions. MPAC submits that the sale value range of these proposed comparable properties is the best evidence of current value for the Subject Property. The sale values of these proposed comparable properties range from $9,000 to $23,000 and therefore, MPAC submits that a current value of $14,500, which is slightly below the median value, is very reasonable for the Subject Property.

12MPAC submits that the correct current value for the Subject Property should be $14,500 rounded.

The Appellant’s Evidence

13Ms. Michno entered Exhibit 3 consisting of the property assessment notices, the House Sigma reports for the sales of 34, 36 and 37 Methodist Island as well as MPAC’s AboutMyProperty™ reports dated January 6, 2021 and March 18, 2021.

14Ms. Michno submits that the data on the AboutMyProperty™ reports is not reliable. In fact, the Appellant notified MPAC that the January report stated that Property 4 showed no valid sale when in fact the property had sold in 2017. Having been brought to MPAC’s attention, MPAC revised its records and used this sale as one of its comparable sales in its evidence for this case.

15Ms. Michno also introduced the sale of 29 Methodist Island which sold in July 2020 for $10,000 after being on the market for seven days in addition to the sales of 36 and 37 Methodist Island which sold together in June 2020 for $20,500 after being listed for 281 days. Ms. Michno submits that neither one of these sales were listed on MPAC’s AboutMyProperty™ reports which again reflects the inaccuracy of the data supplied by MPAC.

16Ms. Michno summarizes her concerns firstly that the Appellant has brought the 2020 sales of 29, 36 and 37 Methodist Island to the attention of MPAC and MPAC has not used these sales in its analysis of current value of the Subject Property and secondly, that the Appellant is not aware if there were any additional sales in the 2016 time frame which MPAC has not disclosed.

17Ms. Michno submits that MPAC’s data is incomplete and its assessment of the Subject Property is incorrect. Ms. Michno further submits that the 2017 sale of 34 Methodist Island is the best comparable property to the Subject Property and not an anomaly as suggested by MPAC. Based on the $9,000 sale of 34 Methodist Island, Ms. Michno requests a fair and equitable current value of $10,000 for the Subject Property.

Findings on Issue 1 - Current Value of the Subject Property

18In order to establish a current value for the Subject Property, the Board has analysed all the evidence submitted by both parties and concludes that the best evidence in support of current value for the Subject Property are the five comparable property sales submitted by MPAC, namely 29, 33, 34 Methodist Island and the two sales of 38 Methodist Island. These properties are all located on the west side of the island, have similar lot sizes and shoreline characteristics and all have the same restrictions as the Subject Property.

19The Board agrees with MPAC and will rely on the sale value range of these four comparable property sales between $9,000 and $23,000, which occurred between August 2013 and December 2017, to establish the current value of the Subject Property. In this case, two of these sales were before the valuation day of January 1, 2016 and three were after the valuation day. The median of these sales is $15,750 and the mean is $15,810 therefore supporting MPAC’s conclusion that the correct current value of $14,500 is below both the mean and median values.

20The Board finds that the Appellant’s position suggesting current value should be set at $10,000, in line with the March 2017 sale of 34 Methodist Island, is not reasonable as this value is at the bottom end of the range of sale values and therefore disregards all other market sales which are considerably higher. The four comparable properties submitted by MPAC are almost identical and therefore the current value should reflect all these sales not just the one at the bottom of the range.

21Regarding the Appellant’s claim that they are not aware of any additional sales close to the 2016 valuation day, the Board is satisfied with Mr. Rose’s testimony that he is not aware of any other sales on Methodist Island between 2013 and 2017.

22With regards to the 2020 sales of 29, 36 and 37 Methodist Island, MPAC is clear in its response that these sales are four years removed from the January 1, 2016 valuation day and as a result MPAC chose not to use these sales. The Board is satisfied that these sales are substantially removed from the valuation day but having said that, because of the unpredictability of the sale values of these unique lots, they are all still within the range of sale values between $9,000 and $23,000. This further supports MPAC in its claim that time adjustments in this case are not required as the same range of values still applies for sales between 2013 and 2020.

23Based on the best available evidence, the Board finds the correct current value of the Subject Property to be $14,500 based on a January 1, 2016 valuation day.

Issue 2 – Whether an adjustment to the assessment of the land should be made to compensate for the assessment of similar lands in the vicinity

24Section 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.”

25The Assessment to Sales Ratio (“ASR”) of a sample of sold properties is a tool often used to determine if a property in the vicinity is assessed below its current value. If other properties are assessed below their current value, a reduction in the assessment below current value is required to make the assessment equitable with the assessments of similar lands in the vicinity. The ASR is determined by comparing the assessment as returned to the time-adjusted sale price, expressed as a mathematical ratio.

26MPAC presented an equity analysis of 30 property sales of vacant residential/recreational land on water with a property code of 110 that occurred from January 1, 2013 to December 31, 2017, located within 20 kilometres of the Subject Property. This equity analysis of the 30 properties results in a median ASR of 0.988 with a Coefficient of Dispersion (“COD”) of 22.5. MPAC submits that its standards indicate that for vacant land properties, the median ASR should fall between 0.95 and 1.05, and the COD should be less than 25. In this case, the median ratio has fallen exactly at 0.988 which is within the acceptable range, and therefore MPAC recommends no downward adjustment to the current value assessment of the Subject Property in order to compensate for the assessments of similar properties in the vicinity.

27The Appellant introduced the assessed values of two properties, 20 Methodist Island which is a double lot with 144.91 feet of frontage and 178.91 feet of depth and an assessed value of $17,900 that sold in February 2012 for $25,000, and 19 Methodist Island with a lot one-half the size at 76.67 feet of frontage and 192.3 feet of depth and an assessed value of $34,500. The Appellant submits that these examples demonstrate lack of consistency in assessment methodology.

Findings on Issue 2 - Equitable Reduction in Assessed Value

28The Board is satisfied that equity has been achieved at a correct current value of $14,500.

29First, the Board finds that the best evidence in support of an equitable reduction in the assessment value is MPAC’s equity study of 30 property sales located within the vicinity of the Subject Property. This study results in an ASR of 0.988 and a COD of 22.5 which are both within the acceptable parameters. Based on the ASR of 0.988, the Board agrees with MPAC that no additional downward adjustment is warranted to the current value of the Subject Property to ensure that the assessment is equitable with the assessment of similar properties in the vicinity.

30Regarding the Appellant’s assertion that there is a lack of consistency between the assessed values of 19 and 20 Methodist Island, the Board finds that while these values appear to be suspect, these two properties are an insufficient sample to suggest that there should be an equity adjustment to the current value below $14,500 for the Subject Property. The Board prefers MPAC’s much larger sample of 30 properties which better reflects the marketplace and the relationship between assessment and sale values. Furthermore, after reviewing the 24 properties on the March 2021 AboutMyProperty™ report submitted by the appellant, all but two properties fall outside a reasonable range of assessments and the assessment of the Subject Property at $14,500 is the lowest of all 24 properties which are all very similar to the Subject Property.

31The Board will therefore make no further downward adjustment to the correct current value of $14,500 to compensate for the assessments of similar properties in the vicinity.

CONCLUSION

32The Board finds the correct current value of the Subject Property to be $14,500 for the 2020 and 2021 taxation years. Furthermore, the Board finds that no equity reduction is required under s. 44(3)(b) of the Act.

ORDER

33The Board orders that the assessment of the Subject Property be reduced from $17,900 to $14,500 for the 2020 taxation year and that the returned assessment value of $14,500 be confirmed for the 2021 taxation year.