Tribunals Ontario

Tribunaux décisionnels Ontario

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE:

March 02, 2022

FILE NO.:

WR 176102

Assessed Person(s):

Rodney Edward Reimer

Appellant(s):

Rodney Reimer

Respondent(s):

Municipal Property Assessment Corporation Region 18

Respondent(s):

City of Port Colborne

Property Location(s):

3507 Firelane 9

Municipality(ies):

City of Port Colborne

Roll Number(s):

2711-040-002-05600-0000

Appeal Number(s):

3456257, 3458164 and 3458163

Taxation Year(s):

2020 and 2021

Hearing Event No.:

759664

Legislative Authority:

Sections 34, 32 and 40 of the Assessment Act, R.S.O. 1990, c. A.31

APPEARANCES:

Parties

Representative

Rodney Reimer

Self-represented

Municipal Property Assessment Corporation

Sheryl McRoberts

City of Port Colborne

No one appeared

HEARD:

January 24, 2022, by telephone conference call

ADJUDICATOR(S):

Jennifer Griffith, Member

DECISION

OVERVIEW

1Rodney Edward Reimer (“Assessed Person”) is the owner of 3507 Firelane 9 (the “Subject Property”) in the City of Port Colborne (the “City”). Mr. Reimer (the “Appellant”) filed appeals for the supplementary assessment of $388,000 effective July 30, 2020 taxation year; returned assessment of $457,000 for the 2021 taxation year; and returned assessment of $462,000 for the 2021 taxation year with the Assessment Review Board (the “Board”), pursuant to s. 34, 32 and 40 of the Assessment Act, R.S.O. 1990, c. A.31 (the “Act”).

2It is the Appellant’s position that the Municipal Property Assessment Corporation’s (“MPAC”) s. 34 supplementary assessment of $388,000 effective July 30, 2020 taxation year, s. 32 returned assessment of $457,000 for the 2021 taxation year; and s. 40 returned assessment of $462,000 for the 2021 taxation year are too high and that the correct current value should be $300,000. MPAC takes the position that the correct current value should be $451,000 based on sales evidence.

3Regarding supplementary assessments, s. 34(1) states:

Supplementary assessments to be added to tax roll

If, after notices of assessment have been given under section 31 and before the last day of the taxation year for which taxes are levied on the assessment referred to in the notices,

(a) an increase in value occurs which results from the erection, alteration, enlargement or improvement of any building, structure, machinery, equipment or fixture or any portion thereof that commences to be used for any purpose;

4Regarding returned assessment pursuant to s. 32(1) states:

Correction of errors, etc., in assessment roll

32 (1) Despite the delivery of any notice provided for under this Act, the assessment corporation at any time before the time fixed for the return of the assessment roll may correct any defect, error, omission or misstatement in any assessment and alter the roll accordingly.

5MPAC states that the original 2016 current value assessment (“CVA”) was returned at $74,000 for the lot only. In 2020, a one-storey structure measuring 1,670 square feet (“sq. ft”) was built on the lot, which is one acre in size.

6Pursuant 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.

7Pursuant 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.

8Pursuant to s. 44(3)(b) of the Act, MPAC takes the position that an equitable reduction of the current value is not required. The Appellant asserts that equity is not at issue. As the onus to demonstrate that an equity reduction is required rests with the appellant, the Board accepts the Appellant’s assertion that equity is not at issue.

Issues for the Hearing

9The issue to be determined on these appeals is:

1. What is the determination of the current value of the Subject Property for the 2020 and 2021 taxation years based on a direct comparison approach?

Result

10The Board finds the correct current value for the Subject Property at the valuation date January 1, 2016, is $371,000.

11The Board also finds that an equity reduction pursuant to s. 44(3)(b) is not at issue and no further reduction is required.

12Based on the correct current value of $371,000, the Board finds the correct s. 34 supplementary assessment for the 2020 taxation year is 297,000 effective July 30, 2020 (correct current value of $371,000 minus $74,000 original s. 40 returned assessment for the valuation date of January 1, 2016).

13The Board therefore reduces the returned assessments for:

1. Section 34 supplementary assessment from $388,000 to $297,000 effective July 30, 2020, for the 2020 taxation year.

2. Section 32 returned assessment from $457,000 to $371,000 for the 2021 taxation year; and

3. Section 40 returned assessment from $462,000 to $371,000 for the 2021 taxation year.

ANALYSIS

Description of the Subject Property

14The Subject Property is a Property Code 301 Single-Family Detached (not on water) residential property. It is situated on a lot size of one acre or 43,560 square feet (“sq. ft.”) with a total building area of 1,670 sq. ft., a quality of construction rating 6.5, two parking spaces, a walkout basement and built in 2020.

Issue 1 - What is the determination of the current value of the Subject Property for the 2020 and 2021 taxation years based on a direct comparison approach?

Direct Comparison Approach Based on Sales

15The 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.

16In 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”.

17For the reasons discussed below, the Board finds the correct current value at the valuation date of January 1, 2016, is $371,000.

18Reviewing the evidence in support of current value, the Board finds the four sales of comparable properties presented by MPAC, sold in 2015 and 2016 in homogeneous neighbourhoods identified as (B22, B21, A06 and A10) represent the best evidence of current value determined by the Direct Comparison Approach to value.

MPAC’s Evidence in Support of Current Value

19MPAC’s Representative, Sheryl McRoberts, presents a Valuation Report dated September 14, 2021, which she prepared and testifies to the information contained in the report.

20MPAC’s Representative testifies that the Subject Property is located in one of Canada’s largest inland ports and is a community steeped in marine heritage. Port Colborne is known for the Welland Canal, ample beachfront, cultural attractions, historic shopping districts, natural attractions, and recreational facilities.

21MPAC’s Representative testifies that due to the current pandemic MPAC’s property inspector was only able to visit and view the exterior of the Subject Property and that a full inspection (interior and exterior) was not completed. MPAC therefore, relies on the information contained in the building plan received from the City and from the exterior inspection.

22MPAC’s Representative testifies that the Subject Property was assessed as having a lot size of 1.32 acres, and during the Request for Reconsideration it was discovered that the correct size of the lot is one acre or 43,560 sq. ft. The impact of this change in lot size is $5,000, therefore, reducing the returned assessment of $462,000 to $457,000, which is reflected in the s. 32 returned assessment of the 2021 taxation year.

23In support of current value, MPAC’s Representative relies on the Direct Comparison Approach and presents four proposed comparable properties, sold in 2015 and 2016 in homogeneous neighbourhoods identified as (B22, B21, A06 and A10) the Subject Property is located in B22. MPAC’s Representative states that due to limited sales in the Subject Property’s neighbourhood, she was forced to expand the search for sales in other surrounding neighbourhoods.

24MPAC’s Representative provides both the actual and time-adjusted sale prices and relies on the time-adjusted sale prices in her analysis. MPAC’s Representative further confirms that that no adjustment was made for differences in characteristics such as total building area, and year built to the Subject Property. Instead, adjustments for site variables such as corner lot is a negative 1% and medium traffic is a negative 2%.

25The following Table 1 is the analysis of the four proposed comparable properties:

Table 1

MPAC’s Sales Analysis

FOUR PROPOSED COMPARABLE PROPERTIES

LOT SIZE (acre)

TOTAL BUILDING AREA (sq. ft.)

YEAR BUILT

SALE DATE

SALE PRICE ($)

SALE PRICE (time adjusted (TAS) ($)

TAS ($) per sq. ft. based on total building area)

ASSESSMENT TO SALES RATIO (“ASR”)

586 Empire Road

1.21

1,614

1988

2015

348,700

350,913

217.41

1.09

2879 Tracy Terrace

2.04

1,404

1990

2016

425,000

357,989

254.97

1.06

611 Sugarloaf Street

0.19

1,746

2013

2016

390,000

320,892

183.78

0.97

64 Merritt Parkway

0.15

1,576

2013

2015

349,000

358,085

227.21

0.79

Median

0.07

1,595

2001

2015.5

369,500

354,451

222.31

1.02

Subject Property

1.00

1,670

2020

N/A

N/A

N/A

N/A

N/A

26The above analysis shows that the median time adjusted sale price is $354,451 and a median time adjusted sale price per square foot of $222.31. When the median time adjusted price per sq. ft. is applied to the Subject Property it results in a current value of $371,257 ($222.31 x 1,670 sq. ft. of total building area). The ASR of these four sales is 1.02.

27On cross examination, MPAC’s Representative learnt that the Subject Property has no fireplace. MPAC’s Representative states that the impact on the assessed value is $6,000 which reduced the returned assessed value to $451,000 ($457,000 - $6,000).

28Based on the above evidence and analysis, MPAC’s Representative is of the opinion that the current value for the Subject Property is $451,000 which is based on MPAC’s model. Although, MPAC’s Representative presents the analysis of the above four sales which she described as similar to the Subject Property, she did not rely on any of the sale prices in her finding of current value. Instead, MPAC’s Representative relies on median ASR of 1.02, which she argues support the adjusted returned assessment of $451,000.

Appellant’s Evidence in Support of Current Value

29In support of current value, the Appellant testifies that the returned assessment of $457,000 is too high and does not represent the Subject Property’s value as of January 1, 2016.

30The Appellant testifies that the Subject Property is negatively impacted by nuisances like a one-way gravel road, limited municipal services with only garbage pick-up and fire access, no landscaping and swampy areas of the lot which is deemed unusable by the Conservation Authority. The Appellant further states that due to the swampy condition of the lot he was forced to build the new home on the far west edge of the property in order to comply with the requirements of the Conservation Authority.

31The Appellant argues that since January 2016, homes in this area have doubled in value up until January 2020, when it skyrocketed. However, the Appellant argues that the current value for this appeal, it is based on the valuation date of January 1, 2016.

32The Appellant further argues that although the Subject Property was built in 2020, the construction materials for the most part are standard quality, and it is a simple bungalow home. In support of this argument, the Appellant presents an itemized list of expenses incurred to build the Subject Property with a total value of $443,499.92 including harmonized sales tax (“HST”) rebate. When the estimated HST of $16,500 was subtracted from the total value it reflects a value of $427,000 rounded ($443,499.92 - $16,500). The Appellant also testifies that he personally assisted with installing floors and painting the new home and estimates the costs for his personal time and labour to be approximately $20,000.

33The Appellant presents four proposed comparable properties (two of which are sold in 2018 and 2020). Due to limited statistical information (lot sizes, building area, year built, quality etc.) these four proposed comparable properties were not analyzed using a table style analysis. These four proposed comparable properties are located at:

1. 733 Silver Bay, built in 2018, with total building area of 1,894 sq. ft. approximately 500 sq. ft. of finished basement, smaller lot, heated garage with fully functioning bar, an elevator, landscaped etc. The current value assessment ("CVA”) is $386,000, however, this proposed comparable property was not sold. Based on this proposed comparable property the Appellant is of the view that the Subject Property should have a CVA of $289,500.

2. 3549 Fireline 12, has unfettered view of the Lake Erie, two-storey, with 2,562 sq. ft. of total building area, built in 2012, two additional out-buildings, enormous deck, beautifully finished, massive fireplace, fully landscaped, outdoor kitchen etc. The CVA is $386,000, however, this proposed comparable property was not sold. Based on this proposed comparable property the Appellant is of the view that the Subject Property should have a CVA of $252,000.

3. 3633 Firelane 9 is described as slightly smaller, with vaulted ceilings, big windows, large fireplace, three bedrooms, landscaped and built approximately 30 years ago. The CVA is $260,000 and was sold in 2020 for $472,000. Based on this proposed comparable property the Appellant is of the view that the Subject Property should have a CVA of $302,000.

4. 606 Silver Bay Road has a CVA of $183,000 and was sold in 2018 for $357,000 and built in 1928. Based on this proposed comparable property the Appellant is of the view that the Subject Property should have a CVA of $201,000 or $282,000

34Based on the above four proposed comparable properties, the Appellant is of the view that the current value for the Subject property should be $300.000.

Finding of the current value of the Subject Property for the 2020 and 2021 taxation years

35Reviewing the evidence presented in support of current value, the Board finds that MPAC presents the best evidence with the four sales analyzed above in Table 1 with a median sale price of $222.31 per sq. ft. When this median sale price per sq. ft. is applied to the Subject Property it results in current value of $371,000 rounded ($222.31 x 1,670 sq. ft. of total building area).

36The analysis of these four comparable properties shows that they have a median lot size of 0.7 acres, 1,595 sq. ft. of total building area, year built 2001 and a time adjusted sale price of $222.31 per sq. ft. This is compared to the Subject Property with a lot size of one-acre, total building area of 1,670 sq. ft., and built in 2020.

37Based on the above analysis, the Board finds that the median time adjusted sale price per sq. ft. which results in a correct current value of $371,000 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. Therefore, the Board determines the correct current value to be $371,000.

38The Board rejects the MPAC’s Representative reliance on the adjusted returned assessment value based on MPAC’s model (adjusted for incorrect lot size and for not having a fireplace), as opposed to making a finding of current value based on sales evidence. As discussed above, s. 19(1) of the Act, clearly 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”.

39The Board rejects MPAC’s application of the ASR of 1.02 of these four sales to suggest that it supports the current value of $451,000. In fact, it is used to determine equity, which is not at issue in this appeal. Therefore, the Board relies on the median time adjusted sale price per sq. ft. of MPAC’s four sales to determine the correct current value of $371,000 as stated above and finds it to be the best evidence of open market transaction between a willing seller and a willing buyer.

40In reviewing the Appellant’s evidence, the Board did not rely on the four proposed comparable properties presented in support of current value for the following reasons:

1. The two proposed comparable properties located at 733 Silver Bay; and 3549 Fireline 12 were not sold. Therefore, the Board relies on the sales presented by MPAC which sold in 2015 and 2016 in its determination of current value as stated above.

2. The remaining two proposed comparable properties at 3633 Firelane 9, sold in 2020 for $472,000; and 606 Silver Bay Road, sold in 2018 for $357,000. The Board finds that the sale dates of these two proposed comparable properties are too far removed from the valuation date of January 1, 2016, to be a true test of open market transaction. Again, the Board relies on MPAC’s four sales in its determination of current value and finds it to be the best evidence of open market transaction between a willing seller and a willing buyer pursuant to s. 19(1) of the Act.

41Regarding the Appellant’s itemized list of expenses incurred to build the Subject Property in 2020 with a total value of $443,499.92; and his estimated cost of $20,000 for personal labour for painting and installing floors, the Board puts no weight on these claims, because the costs incurred were well outside of the valuation date of January 1, 2016, and no professional receipts (from reputable companies) were presented in support of the values claimed. Instead, the Board relies on open market sales which occurred in 2015 and 2016 to determine the correct current value of $371,000 which the Board finds to be the best evidence of open market transaction between a willing seller and a willing buyer pursuant to s. 19(1) of the Act.

42Regarding the issues of nuisances that impact the assessed value of the Subject Property, the Board finds the following:

1. The graveled road, no landscaping, and limited municipal services, the Board finds that the Appellant presents no quantitative evidence (e.g., cost-to-cure) to demonstrate the impact these nuisances have on the assessed value of the Subject Property.

2. No landscaping, the Board accepts MPAC’s testimony on cross-examination that landscaping is not an assessable item. The Board also finds that there is no quantifiable evidence before it to justify any adjustment.

3. The swampy nature of the site area, the Board finds that the Appellant was aware of the building restrictions due to the swampy nature of the lot and that certain areas of the lot were deemed unusable by the Conservation Authority, because he acknowledges that he was aware on cross-examination. Therefore, the Board puts no weight on these issues because there is no quantifiable evidence before this Board to support any negative adjustments.

CONCLUSION

43The Board finds the correct current value for the Subject Property at the valuation date January 1, 2016, is $371,000.

44The Board also finds that an equity reduction pursuant to s. 44(3)(b) is not at issue and no further reduction is required.

45Based on the correct current value of $371,000, the Board finds the correct s. 34 supplementary assessment for the 2020 taxation year is 297,000 effective July 30, 2020 (correct current value of $371,000 minus $74,000 original s. 40 returned assessment for the valuation date of January 1, 2016).

ORDER

46The Board orders the reduction of the returned assessments for the:

1. Section 34 supplementary assessment from $388,000 to $297,000 effective July 30, 2020, for the 2020 taxation year.

2. Section 32 returned assessment from $457,000 to $371,000 for the 2021 taxation year; and

3. Section 40 returned assessment from $462,000 to $371,000 for the 2021 taxation year.