Tribunals Ontario / Tribunaux décisionnels Ontario

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

ISSUE DATE: February 14, 2022

FILE NO.: WR 176096

Assessed Person(s): Ian Cooper Mathews; Sandra Louise Jarvis

Appellant(s): Ian Mathews and Sandra Jarvis

Respondent(s): Municipal Property Assessment Corporation Region 09

Respondent(s): City of Toronto

Property Location(s): 52 Lawrence Crescent

Municipality(ies): City of Toronto

Roll Number(s): 1904-104-600-01100-0000

Appeal Number(s): 3436967 and 3441753

Taxation Year(s): 2020 and 2021

Hearing Event No.: 756316

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

APPEARANCES:

Parties	Representative
Ian Cooper Mathews and Sandra Louise Jarvis	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

1Ian Matthews and Sandra Jarvis, (the “Appellants”), owners of 52 Lawrence Crescent (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 Appellants are deemed to have brought the same appeal in respect of the 2021 taxation year, pursuant to s. 40(26) of the Act.

2The Appellants argued that the current value of the Subject Property should be $1,850,064, with a further downward adjustment to $1,731,660 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 $2,560,000. MPAC’s opinion of value based on market sales is $2,815,601. MPAC argued that a further downward adjustment to $2,666,374 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 $2,560,000.

4At the completion of the hearing, the Board reserved its decision.

Issues for the Hearing

5The issues to be determined are:

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

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?

Result

6The Board determines the correct current value of the Subject Property for the 2020 and 2021 taxation years to be $2,521,000 (rounded).

7The Board finds that a downward adjustment to the current value to $2,370,000 (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 $2,560,000 to $2,370,000 (rounded) for the 2020 and 2021 taxation years.

ANALYSIS

Description of the Subject Property

9The Subject Property is a one-and-a-half Single-Family Detached residential dwelling built in 1944, with effective year built of 1983 due to a 1990 renovation and is located in the Lawrence Park neighbourhood in the City of Toronto. It has a lot with 62 feet (“ft”) of effective frontage and 145 ft. of effective depth for an effective site area of 0.21 acres. It has a total building area of 2,979 square feet (“sq. ft.”), with construction quality of 7.0, a basement area of 1,440 sq. ft. of which 818 sq. ft. is finished. 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 $2,521,000 (rounded).

MPAC’s Proposed Comparable Properties

13MPAC presented the Board with six proposed comparable property sales. The details of all MPAC’s 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/EYB	Renovation Code/year of renovation	Q of Const./ # of Stories/ Corner Lot
Subject Property 52 Lawrence Crescent	2,560,000	N/A	N/A	2,979	0.21	1944/ 1983	“C”/ 1990	7.0/ 1 ½ Storeys/ Corner Lot
Sale 1 34 Rochester Avenue	2,028,000	July 2016 (2,488,700)	2,255,421	2,605	0.17	1941/ 1974	“B”/ 1990	7.0/ 2 ½ Storeys/ Not Corner lot
Sale 2 66 Rochester Avenue	2,412,000	October 2016 (3,158,000)	2,743,303	2,781	0.17	1943/ 1994	“B”/ 2003	7.0/ 2 storeys/ Not Corner Lot
Sale 3 64 Cheltenham Avenue	2,272,000	January 2015 (2,480,000)	3,035,463	2,871	0.17	1936/ 1975	“B”/ 1996	7.0/ 2 storeys/ Not Corner Lot
Sale 4 18 Weybourne Crescent	2,379,000	August 2016 (2,922,000)	2,610,461	2,800	0.17	1918/ 1991	“C”/ 2004	7.0/ 2 ¼ Storeys/ Not Corner Lot
Sale 5 137 Cheltenham Avenue	2,402,000	July 2015 (2,300,000)	2,520,596	2,655	0.17	1941/ 1975	“B”/ 1990	7.0/ 2 storeys/ Corner Lot
Sale 6 35 Mildenhall Road	2,435,000	April 2015 (2,270,000)	2,625,049	2,762	0.15	1945/ 1993	1998	7.0/ 2 storeys Not Corner Lot

14MPAC submitted that these six comparable property sales are similar to the Subject Property, since they are all in the same homogenous neighbourhood as the Subject Property, they have similar original year built and effective year built. Jessie Yu, MPAC’s assessor and representative, testified that there were lack of sales of properties with one and a half storeys like the Subject Property, so MPAC used property sales with two-storey structures. Ms. Yu also testified that only comparable property Sale 5 is a corner lot like the Subject Property, which also benefits from a negative 1% adjustment. Therefore, she added that MPAC applied a negative 1% adjustment to the remaining five comparable property sales that are not corner lots to account for the Subject Property’s corner lot adjustment.

15MPAC applied the median time adjusted rate per sq. ft of $945.15 to the Subject Property’s total building area of 2,979 sq. ft. to provide a value of $2,815,601. MPAC submitted that this is the correct current value of the Subject Property.

16The Board finds that property Sale 5 is relatively comparable to the Subject Property. It is the only property sale that is a corner lot like the Subject Property. MPAC did not present evidence on how it arrived at its negative 1% adjustment for a corner lot property, therefore it is preferable to use a similar property with this feature, as this feature would be accounted for in the purchase price. They both have similar lot and building sizes, although the Subject Property’s building and site area is larger than comparable property Sale 5.

17The Subject Property and comparable property Sale 5 were both renovated in 1990. MPAC denotes the renovation type by Code “C” for the Subject Property and code “B” for comparable property Sale 5. MPAC argued that a code “C” renovation is more detailed than a code “B” renovation, as the former means both interior and exterior renovation were carried out, while for the latter, only interior renovations were made. The Appellants argued that it all depends on the year of renovation, since depreciation will also be a consideration. MPAC was unable to conduct an interior inspection of all its proposed comparable property sales and the Subject Property due to COVID-19. The parties did not present the Board with interior photographs of the Subject Property and comparable property Sale 5; therefore, the Board does not have sufficient evidence to determine the extent of renovations on both properties. However, the parties agree that both properties were renovated in 1990.

Appellants’ Proposed Comparable Property Sales

18The Appellants presented four proposed comparable property sales including MPAC’s comparable property Sale 5, which the Board determined to be relatively comparable to the Subject Property out of all MPAC’s proposed comparable properties.

19Comparable Property Sale 1- 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. The Board did not use the Appellants’ Sale 2, 109 Lawrence Crescent, since it is not a corner lot. Furthermore, its lot size of 0.12 acres and building size of 2,305 sq. ft. are much smaller than the Subject Property. The Appellants provided the Board with the option of using this sale and making a negative adjustment of 11.36%, based on the study the Appellants 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 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.

20The Appellants’ property Sale 3 - 107 Lawrence Crescent is a corner lot, built in 1931. It sold August 2016 at a time adjusted sale price of $1,473,450. It has a smaller lot size of 0.14 acres a quality of construction of 6.5, a smaller building area of 2,648 sq. ft. The Board used this property sale to determine the current value range of the Subject Property.

21The Appellants made adjustments to its comparable property sales for location, full storey, ceiling heights and traffic. The Appellants could not present the Board with evidence on how it arrived at these adjustments, except for the fact that it was based on the Appellants representative’s 30 years’ experience. The Board finds that these adjustments are arbitrary, and the Board requires evidence to quantify or measure the impact of these issues against the current value. The Board cannot speculate or arbitrary calculate the impact of these issues to the current value of the Subject Property.

Finding on Current Value

22The Appellants comparable property Sale 3 – 107 Lawrence Crescent and MPAC’s comparable property Sale 5 (Appellants’ Sale 4 – 137 Cheltenham Avenue) are located in the same homogenous neighbourhood as the Subject Property. The average features of these two sales are: year built of 1936, quality of construction is 6.5 (rounded), total building area 2,651.5 sq. ft. and site area of 0.16 acres. This is compared to the Subject Property with a year built of 1944, quality of construction of 7.0, total building area of 2,979 sq. ft. and site area of 0.21.

23These two comparable properties vary in size and a time adjusted sale price per sq. ft. will not be reasonable to use, due to economies of scale. The time adjusted sale price of these two properties range from $1,473,450 - $2,520,596. Although these two properties are similar to the Subject Property in terms of location, the Subject Property is larger in building and lot size. The Board finds that to account for this difference in size, the current value of the Subject Property should be at the higher end of the time adjusted sales price range of these two comparable property sales. However, the Appellants testified that the Subject Property is a bungalow that had second storey attic space converted with dormers. MPAC did not object to this evidence. MPAC’s comparable property Sale 5 is a two-storey structure. A potential willing buyer for the Subject property will not have the benefit of an additional full floor, compared to MPAC’s comparable property Sale 5. Therefore, the Board finds that this additional full floor offsets, the larger building and lot size of the Subject Property.

24Consequently, the Board determines that the time adjusted sale price of MPAC’s comparable property Sale 5 at $2,520,596, represents the best evidence of an arm’s length transaction for the Subject Property. The Board finds that the correct current value of the Subject Property is $2,521,000 (rounded).

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#sec44subsec3_smooth)(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.

25Section 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.

26The 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.

27MPAC presented an equity analysis of 30 Single Family Detached residential properties with sales that occurred from January 1, 2015 to December 31, 2016. MPAC also used search criteria of building area from 2,500 sq. ft. – 3,500 sq. ft. and lot size of more than 0.15 acres. MPAC submitted that the median ASR of the sales is 0.947. 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.

28MPAC submitted that with a median ASR of 0.947, based on its equity analysis, equity has not been achieved therefore applying the median ASR to its current value provides an equitable assessment of $2,666,374. MPAC submitted that this is higher than the assessment as returned, therefore, requested that the Board confirms the assessment as returned at $2,560,000.

29The Appellants provided 33 properties, which included all MPAC’s 30 property sales and three additional properties, which the Appellants argued MPAC did not include but marched the search criteria MPAC used, which is the same criteria used by the Appellants. The Appellants provided the median ASR of the first 30 properties as 0.936 and applied it against what they believe to be the correct current value of the Subject Property and provided a value of $1,731,660. They submitted that this should be the current value of the Subject Property.

30MPAC made submissions regarding the three additional properties included by the Appellants. MPAC submitted that the first property has a total lot size of 0.14, which is outside MPAC’s search criteria of lot size more than 0.15 and regarding the other two property sales, MPAC questioned the validity of the sales.

Finding on Equity

31For equity, the comparable properties need not be similar as it is needed in the determination of the correct current value. As determined by the Ontario Divisional Court in Municipal Property Assessment Corp. v. Loblaw Properties Ltd., 2017 ONSC 1299, applying the decision in Trizec Equities Ltd. v. Ontario (Regional Assessment Commissioner, Region No. 27), [1988] O.J. No. 182, “…All points of comparison must be considered…” The selection of these 33 properties from both the Appellants and MPAC provides similar properties as the Subject Property, in terms of location; they are all within the same homogenous neighbourhood as the Subject Property with distance of not more than 0.887 kilometers from the Subject Property, their nature - all single family detached homes, and use - all residential properties.

32MPAC did not provide the Board with evidence that the other two additional property sales included by the Appellants are invalid. In fact, Ms. Yu testified that they “may” be invalid sales, which is speculative. In the absence of MPAC’s evidence to prove that they are invalid sales, the Board included the two additional sales to determine if an adjustment for equity is required.

33The Board used all 33 properties, which includes all MPAC’s 30 sales (which the Appellants used) and the three additional property sales included by the Appellants, providing a median ASR of 0.940. Applying this to the determined current value of $2,521,000 (rounded), reduces the current value to $ 2,369,740. The Board finds the current value of the Subject Property to be $2,370,000 (rounded).

CONCLUSION

34The Board finds that the correct current value of the Subject Property for the 2020 and 2021 taxation years to be $2,521,000 (rounded), with a downward adjustment to $2,370,000 (rounded), to make the current value equitable with the assessment of similar properties in the vicinity.

ORDER

35The Board orders that the assessment of the Subject Property is reduced from $2,560,000 to $2,370,000 (rounded) for the 2020 and 2021 taxation years.

"Subuola Awoleri"

SUBUOLA AWOLERI

MEMBER

Assessment Review Board

Website: www.tribunalsontario.ca/arb```