Tribunals Ontario
Assessment Review Board
ISSUE DATE: February 14, 2022
FILE NO.: WR 176097
Assessed Person(s): Margaret Cochrane
Appellant(s): Margaret Cochrane
Respondent(s): Municipal Property Assessment Corporation Region 09
Respondent(s): City of Toronto
Property Location(s): 50 Buckingham Avenue
Municipality(ies): City of Toronto
Roll Number(s): 1904-104-660-02500-0000
Appeal Number(s): 3436974 and 3442025
Taxation Year(s): 2020 and 2021
Hearing Event No.: 756319
Legislative Authority: Section 40 of the Assessment Act, R.S.O. 1990, c. A.31
APPEARANCES:
| Parties | Representative |
|---|---|
| Margaret Cochrane | Surin Toor |
| Municipal Property Assessment Corporation | Jessie Yu |
| City of Toronto | No one appeared |
HEARD: January 20, 2022 by telephone conference call
ADJUDICATOR(S): Subuola Awoleri, Member
DECISION
OVERVIEW
1Margaret Cochrane, (the “Appellant”), owner of 50 Buckingham Avenue (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. The Appellant is deemed to have brought the same appeal in respect of the 2021 taxation year, pursuant to s. 40(26) of the Act.
2The Appellant argued that the current value of the Subject Property should be $1,960,090, with a further downward adjustment to $1,805,242 to make the current value equitable with the assessment of similar properties in the vicinity.
3The Subject Property was assessed by the Municipal Property Assessment Corporation (“MPAC”) at $2,524,000. MPAC’s opinion of value based on market sales is $3,126,676. MPAC argued that a further downward adjustment to $2,951,582 is required to make the current value equitable with the assessment of similar properties in the vicinity. However, MPAC submitted that it is not seeking an increase in the assessment of the Subject Property and requested that the Board confirms the current value as returned at $2,524,000.
4At the completion of the hearing, the Board reserved its decision.
Issues for the Hearing
5The issues to be determined are:
What is the correct current value of the Subject Property for the 2020 and 2021 taxation years?
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?
Result
6The Board determines the correct current value of the Subject Property for the 2020 and 2021 taxation years to be $2,482,000 (rounded).
7The Board finds that a downward adjustment to the current value to $2,336,000 (rounded) is necessary to ensure that the assessment of the Subject Property is equitable with the assessments of similar lands in the vicinity.
8The Board reduces the assessment of the Subject Property from $2,524,000 to $2,336,000 for the 2020 and 2021 taxation years.
ANALYSIS
Description of the Subject Property
9The Subject Property is a two quarter Single-Family Detached residential dwelling built in 1944, with effective year built of 1973, located in the Lawrence Park neighbourhood in the City of Toronto. It has a lot with 50 feet (“ft”) of effective frontage and 215 ft. of effective depth for an effective site area of 0.25 acres. It has a total building area of 3,766 square feet (“sq. ft.”), with construction quality of 7.5, without a basement area. It has an attached garage of 720 sq. ft. The Subject Property is a corner lot, which benefits from a negative adjustment of 1% in it’s assessed value.
Issue 1 - What is the correct current value of the Subject Property for the 2020 and 2021 taxation years?
10In 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 date set by the Act.
11The 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. If no such transaction took place, the next best measure of current value is 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.
12The Board finds the current value of the Subject Property for the 2020 and 2021 taxation years to be $2,482,000 (rounded).
MPAC’s Proposed Comparable Properties
13MPAC presented the Board with 14 proposed comparable property sales. The details of all MPAC’s proposed comparable property sales are provided in Table 1 below.
Table 1
| Property | Address | Assessment ($) | Sale Date & Sale Amt. ($) | Time / Adjusted Sale ($) | Building/ Size (sq. ft.) | Lot Size (Acres) | Year Built/EYB | Renovation Code/year of renovation | Q of Const./ # of Stories/ Corner Lot |
|---|---|---|---|---|---|---|---|---|---|
| Subject Property | 50 Buckingham Avenue | 2,524,000 | N/A | N/A | 3,766 | 0.25 | 1944/ 1973 | “B”/ 1990 | 7.5/ 2 ¼ storeys/ Corner Lot |
| Sale 1 | 12 Wanless Crescent | 2,650,000 | March 2016 (2,600,000) | 2,497,479 | 3,323 | 0.19 | 1942/ 1984 | “D”/ 1987 | 7.0/ 3 storeys/ Not Corner lot |
| Sale 2 | 93 Glengowan Road | 2,463,000 | Sept. 2016 (3,218,000) | 2,823,876 | 3,594 | 0.18 | 1931/ 1977 | “B”/ 2002 | 7.5/ 2 ½ storeys/ Not Corner Lot |
| Sale 3 | 36 Glenallan Road | 2,705,000 | Dec. 2015 (2,824,500) | 2,847,880 | 3,892 | 0.21 | 1963/ 1963 | N/A | 7.5/ 2 storeys/ Not Corner Lot |
| Sale 4 | 36 Daneswood Road | 2,776,000 | August 2016 (3,485,000) | 3,102,884 | 3,592 | 0.23 | 1964/ 1964 | N/A | 7.5/ 2 ¼ Storeys/ Corner Lot |
| Sale 5 | 103 Rochester Avenue | 2,682,000 | May 2015 (2,700,000) | 3,079,198 | 3,587 | 0.21 | 1926/ 1987 | “C”/ 1998 | 7.0/ 2 ¾ storeys/ Corner Lot |
| Sale 6 | 200 Dawlish Avenue | 2,563,000 | June 2016 (3,025,000) | 2,774,443 | 3,342 | 0.22 | 1926/ 1970 | “B”/ 1994 | 7.5/ 2 storeys Not Corner Lot |
| Sale 7 | 44 Glenallan Road | 2,464,000 | Nov. 2015 (2,800,000) | 2,870,704 | 3,612 | 0.19 | 1968/ 1968 | N/A | 7.0/ 2 storeys Corner Lot |
| Sale 8 | 44 Glenallan Road | 2,464,000 | Feb. 2015 (1,970,000) | 2,380,399 | 3,612 | 0.19 | 1968/ 1968 | N/A | 7.0/ 2 storeys Corner Lot |
| Sale 9 | 67 Weybourne Crescent | 2,136,000 | Jan. 2015 (1,955,000) | 2,410,091 | 2,049 | 0.19 | 1921/ 1965 | “B”/ 1990 | 7.0/ 2 storeys Not Corner Lot |
| Sale 10 | 115 Dawlish Avenue | 2,350,000 | Feb. 2016 (2,350,000) | 2,293,511 | 2,566 | 0.19 | 1926/ 1967 | “B”/ 1990 | 7.0/ 2 ½ storeys Not Corner Lot |
| Sale 11 | 74 Weybourne Crescent | 2,345,000 | June 2015 (2,050,000) | 2,294,935 | 2,883 | 0.2 | 1913/ 1963 | “B”/ 1990 | 7.0/ 2 ½ storeys Not Corner Lot |
| Sale 12 | 89 Dawlish Avenue | 2,335,000 | Aug. 2016 (2,900,000) | 2,582,027 | 2,286 | 0.18 | 1925/ 1989 | “D”/ 1993 | 7.0/ 2 storeys Not Corner Lot |
| Sale 13 | 3 St. Aubyns Crescent | 2,403,000 | April 2015 (2,050,000) | 2,382,524 | 2,043 | 0.19 | 1937/ 1971 | “B”/ 1990 | 6.5/ 2 storeys Not Corner Lot |
| Sale 14 | 279 Dawlish Avenue | 2,569,000 | Aug. 2016 (2,700,000) | 2,403,956 | 2,576 | 0.2 | 1951/ 1976 | “B”/ 1990 | 7.0/ 2 storeys Not Corner Lot |
14The Board finds that MPAC’s comparable property Sale 8 is the best comparable property to the Subject Property. This property sale is a corner lot like the Subject Property. It has a similar lot size of 0.19 acres and a similar quality of construction of 7.0. This property has a finished basement area, while the Subject Property does not have a basement area. During cross examination, MPAC admitted that the Subject Property is not renovated. MPAC’s assessor and representative, Jessie Yu, testified that MPAC arbitrarily assigned a renovation code “B” to the Subject Property, since it is an old property built in 1944. The fact that it is unrenovated makes it similar to property Sale 8, which was also unrenovated at the time of its sale.
15MPAC used two tests to arrive at the Subject Property’s current value. For the first test, MPAC used the time adjusted rate per sq. ft. of comparable property Sales 1 - 8 and applied a negative 1% adjustment to properties that are not corner lots. This results to $786.32. MPAC applied this rate against the Subject Property’s total building area, which provides a value of $2,961,281. MPAC did not rely on this test. For the second test, MPAC used the median time adjusted sale price per effective site area of property Sales 5 to 14. Ms. Yu testified that since the Subject Property does not have a basement area, the second test is preferable, using the effective site areas. She further testified that for these 10 sales, the purchasers purchased them for the land value. MPAC provided a rate of $12,506,705 applied to the lot size of the Subject Property of 0.25 acres, which provides a value of $3,126,676. MPAC submitted that this is the correct current value of the Subject Property.
16Using the second test, MPAC assumed that its comparable property sales were purchased for the land value. The Board finds this to be speculative. Eight of the 10 property sales were renovated between 1990 and 1998, this means that the improved value of the buildings was part of the purchase price. In addition, the building sizes of most of these property sales as admitted by MPAC are also smaller than the Subject Property.
17The Board only reviewed MPAC’s property sales that are corner lots, since the Subject Property is a corner lot. MPAC testified that it made a negative adjustment of 1% for the properties without corner lots. MPAC was unable to provide the Board with the evidence for this adjustment and testified that it is based on MPAC’s model. The Board will require evidence to quantify this adjustment, therefore the Board disregarded sale properties that were not corner lot sales.
18MPAC’s property sales which are corner lots are property Sales 4, 5, 7, and 8. The Appellant testified that Sale 4 is not comparable to the Subject Property since it was renovated, and the Subject Property is unrenovated. MPAC does not have any record of this renovation. However, the Appellant submitted that not all property owners take out building permits for renovations. The Appellant testified that this sale was investigated, where the property owner spent over half a million renovating it. The Appellant’s representative, Surin Toor, testified that he drove by the property and recorded what he observed and viewed the multiple listing services (“MLS listing”) for the sale. Ms. Yu could not re-collect what she observed upon driving by the property. The Appellant further provided the MLS listing for this property which provides that it has “reno”, under clients remark and the exterior has stucco and plaster as testified by Mr. Toor. Ms. Yu did not object to this evidence. Therefore, the Board did not use this sale being a renovated property which is different from the Subject Property that is unrenovated. For the same reason the Board did not use Sale 5, which is also a renovated property, with renovation code “C” which according to MPAC is a detailed renovation of both interior and exterior of this property.
19MPAC’s property Sales 7 and 8 are the same property that sold on different dates. Comparable property Sale 8, which the Board determined as the best comparable sale, sold February 2015, for $2,380,399. The second sale of the same property sold November 2015 for $2,870,704. The Appellant argued that after the first sale the purchasers renovated the property and sold it for over half a million higher than the first sale. Mr. Toor testified that he reviewed the MLS listing for the sale. He further argued that the time adjustment factor had provided for the shift in the market and if the property had not changed, the value of the first sale will be in the range of the second sale, since the time difference is only nine months. MPAC did not object to Mr. Toor’s testimony. MPAC only asked if Mr. Toor reviewed the building permit for the renovation. Mr. Toor testified that he did not see any building permit and that some property owners carry out renovations without permits. He provided pictures of this property sale. The Board finds the Appellant credible, just like Property Sale 4, MPAC did not have any record of the renovation on this property since it did not have a building permit. Consequently, the Board did not use property Sale 7, as it was renovated, and the Subject Property is unrenovated.
Appellant’s Proposed Comparable Property Sales
20The Appellant presented five proposed comparable property sales including MPAC’s property Sale 8, which the Board determined to be the best comparable out of MPAC’s 14 comparable property Sales. Sale 2 - 82 Lawrence Crescent is a corner lot, which sold March 31, 2017. The Board did not use this sale, since it sold outside the shoulder years, which is 12 months on either side of the valuation date of January 1, 2016. As the further a sale is from the valuation date, the less it reflects the market.
21The Board did not use the Appellant’s property Sales 3, 4 and 5 as these property sales are not corner lot properties. The Appellant provided the Board with the option of using these property sales and making a negative adjustment of 11.36%, based on the study the Appellant carried out of two properties within the vicinity of the Subject Property. The two properties sold for different prices, with the non-corner lot being higher than the corner lot sale, the difference being 11.36 %. The Board finds this study speculative as there could have been other factors that could have been responsible for the difference in the sale price, such as the bigger building size. Moreover, the Board will prefer to use comparable property sales that have a similar feature of being a corner lot like the Subject Property.
22The Appellant made a downward adjustment of 11.36% to the 3 properties that are not corner lot and further made a 10% downward adjustment for all the five properties for basement area since the Subject Property does not have a basement area. MPAC testified that since the Subject Property does not have a basement area, MPAC made a 10% negative adjustment to its assessed value. However, MPAC did not apply this 10% negative adjustment to its comparable properties with basement areas, submitting that it is not common to find a property in Toronto without a basement area.
23The Appellant provided the Board with the median rate per sq. ft. of the adjusted five comparable property Sales as $520.47, applying this rate to the total building area of the Subject Property provides a value of $1,960,090. The Appellant submitted that this is the correct current value of the Subject Property.
24The Board finds that MPAC arbitrarily applied a 10% negative adjustment for the basement area, as MPAC did not provide the Board with any evidence on how it arrived at this percentage. Mr. Toor submitted that based on his experience he believes the 10% negative adjustment is reasonable. Neither party provided the Board with evidence to justify the 10% negative adjustment for basement area. The Board requires evidence to quantify or measure this impact against the current value of the Subject Property. The Board cannot speculate or arbitrary calculate the impact of this issue to the current value of the Subject Property. Consequently, the Board did not use this adjustment.
Finding on Current Value
25The Board used MPAC’s comparable property Sale 8 (Appellant’s Sale 1 - 44 Glenallan Road) to determine the current value of the Subject Property. The total building area of this property sale is similar to the Subject Property, only 154 sq. ft., smaller than the Subject Property and the land size of 0.19 acres is similar to the Subject Property. The Board used the time adjusted sale price per sq. ft. of property Sale 8 at $659.02 against the Subject Property’s total building area of 3,766 sq. ft., this provides a value of $2,481,869.32. This is higher than the time adjusted sale price of MPAC’s property Sale 8, since the Subject Property has a larger site area and a higher quality of construction of 7.5. The Board finds the correct current value of the Subject Property to be $2,482,000 (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.
26Section 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.
27The 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 sales price.
28MPAC presented an equity analysis of 28 Single Family Detached residential properties with sales that occurred from January 1, 2015 to December 31, 2016. MPAC also used a search criteria of lot size of more than 0.18 acres. The median ASR of the sales is 0.944. MPAC submitted that the International Association of Assessing Officers standards states that the level of appraisal for all properties should fall between 0.90 and 1.10. MPAC takes the position that equity is achieved if the median ASR falls between 0.95 - 1.05.
29MPAC submitted that with a median ASR of 0.944, based on its equity analysis, equity has not been achieved, therefore applying the median ASR to its current value provides an equitable assessment of $2,951,582. MPAC submitted that this is higher than the assessment as returned therefore requested that the Board confirms the assessment as returned at $2,524,000.
30The Appellant provided 32 properties, which included all of MPAC’s 28 property sales and 4 additional properties, which the Appellant argued MPAC did not include but marched MPAC’s search criteria, which is the same criteria the Appellant used. The Appellant provided the median ASR of the first 30 properties as 0.921 and submitted that the current value of the Subject Property should be reduced to $1,805,242.
31Under cross examination, the Appellant confirmed that all the data used in the evidence were obtained from MPAC. However, MPAC argued that the Appellant’s property Sale 3 on its equity analysis is actually 0.09 acres, which is a lot smaller than the Subject Property. The Appellant did not object to this evidence. MPAC also argued that the Appellant’s property Sale 32 distance is 0.329 km and not 1.023 km as stated in the Appellant’s equity analysis. MPAC submitted that if the Appellant’s property Sale 3 is excluded and property Sale 32 included, the median ASR for the 31 property sales will be 0.941, which the Appellant accepted as accurate.
Finding on Equity
32The Board used the Appellant’s equity analysis, which is a combination of MPAC’s 28 properties and three additional property sales presented by the Appellant. This provides the Board with a more representative sample size, which is preferred and will provide a general level of assessment of similar lands in the vicinity. The median ASR for the 31 properties is 0.941, when applied against the determined correct current value of $2,482,000, this provides an equitable assessment of $2,335,562. The Board reduces the current value of the Subject Property to $2,336,000 (rounded).
CONCLUSION
33The Board finds the correct current value of the Subject Property for the 2020 and 2021 taxation years to be $2,482,000 (rounded). A further downward adjustment to the current value to $2,336,000 (rounded) is necessary for it to be equitable with the assessment of similar properties in the vicinity.
ORDER
34The Board orders that the assessment of the Subject Property is reduced from $2,524,000 to $2,336,000 (rounded) for the 2020 and 2021 taxation years.
"Subuola Awoleri"
SUBUOLA AWOLERI MEMBER Assessment Review Board Website: www.tribunalsontario.ca/arb```