Susan Ajang-Salek and Joseph Salek v. Municipal Property Assessment Corporation Region 09, 2022 CanLII 1620

Tribunals Ontario / Tribunaux décisionnels Ontario

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

ISSUE DATE: January 13, 2022

FILE NO.: WR 175395

Assessed Person(s): Susan Ajang-Salek

Appellant(s): Susan Ajang-Salek and Joseph Salek

Respondent(s): Municipal Property Assessment Corporation Region 09

Respondent(s): City of Toronto

Property Location(s): 174 Valley Road

Municipality(ies): City of Toronto

Roll Number(s): 1908-081-630-03100-0000

Appeal Number(s): 3435316 and 3441889

Taxation Year(s): 2020 and 2021

Hearing Event No.: 753394

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

APPEARANCES:

Parties	Representative
Susan Ajang-Salek and Joseph Salek	Surin Toor
Municipal Property Assessment Corporation	Carlo Bassi
City of Toronto	No one appeared

HEARD: November 17, 2021 by telephone conference call

ADJUDICATOR(S): Jennifer Griffith, Member

DECISION

OVERVIEW

1Susan Ajang-Salek (the “Assessed Person/Appellant”) is the owner of 174 Valley Road (the “Subject Property”) in the City of Toronto (the “City”). Also appearing as an Appellant is Joseph Salek. The Subject Property is a Single-Family Detached (not on water) dwelling, Property Code 301. The Appellants filed appeals for the returned assessment of $3,872,000 for the 2020 taxation year, and $3,946,000 for the 2021 taxation year with the Assessment Review Board (the “Board”), pursuant to 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”) current value assessment of $3,872,000 for the 2020 taxation year, and $3,946,000 for the 2021 taxation year are too high and that the correct current value should be $3,123,000. MPAC takes the position that the correct current value should be $4,794,312 based on sales evidence. However, MPAC is not seeking an increase in the correct current value and is asking the Board to confirm the returned assessment of $3,872,000 for the 2020 taxation year, and $3,946,000 for the 2021 taxation year. No one appeared on behalf of the City.

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 Appellant asserts that an equity reduction is required.

Issues for the Hearing

6The issues to be determined on these appeals are:

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?

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 for the Subject Property at the valuation date January 1, 2016 is $4,251,000. However, MPAC is not seeking a higher correct current value, therefore, the Board will not increase the assessment and finds the correct current value is $3,872,000 for the 2020 taxation year and $3,946,000 for the 2021 taxation year.

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

9Therefore, the Board finds the returned assessment of $3,872,000 for the 2020 taxation year and $3,946,000 for the 2021 taxation year be confirmed.

ANALYSIS

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

10The 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.

11In 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”.

12For the reasons discussed below, the Board finds the correct current value at the valuation date of January 1, 2016 is $4,251,000.

13Reviewing the evidence in support of current value Property the Board finds the best evidence is the sales of three comparable properties (two of which are presented by MPAC and the Appellant, and one by MPAC) which occurred in 2016 and located in the same homogeneous area (identified as C59) as the Subject Property. These three comparable properties are located at 105 Arjay Crescent, sold at a time-adjusted sale price of $5,066,827; at 152 Highland Crescent, sold at a time-adjusted sale price of $3,354,464; and at 70 Highland Crescent, sold at a time-adjusted sale price of $4,332,337.

MPAC’s Evidence in Support of Current Value

14MPAC’s Representative, Carlo Bassi, presents a Valuation Report dated April 30, 2021, which he prepared and testifies to the information contained in the report.

15MPAC’s Representative testifies that the Subject Property is located in the York Mills neighourhood, which is an affluent neighbourhood in the City of Toronto. He testifies that the York Mills transition from a rural hamlet to a residential neighbourhood began in the 1930s and has managed to maintain a peaceful tranquility and natural beauty that has helped make it one of Toronto’s most desirable neighbourhoods. York Mills is famous for its expansive properties, century old trees and lush landscape.

16MPAC’s Representative testifies that in responding to a Request for Reconsideration for the 2020 taxation year, he discovered that the Subject Property has a swimming pool valued at $74,000 that should have been entered on MPAC’s data and was missed. As a result of the missed information, MPAC’s corrected the data of the Subject Property and changed the return of the roll for the 2021 taxation year from $3,872,000 to $3,946,000.

17MPAC’s Representative further states that comparable properties located on corner lots receive a negative one percent adjustment.

18In support of current value, MPAC’s Representative relies on the Direct Comparison Approach and presents seven proposed comparable properties, sold over the period 2014 to 2016 in the same homogeneous neighbourhood identified as (C59) as the Subject Property.

19MPAC’s Representative provides both the actual and time-adjusted sale prices and relies on the time-adjusted sale prices in his analysis. The following Table 1 is the analysis of the seven proposed comparable properties:

Table 1 MPAC’s Sales Analysis

7 PROPOSED COMPARABLE PROPERTIES	LOT SIZE (sq. ft.)	TOTAL BUILDING AREA (sq. ft.)	QUALITY RATING	YEAR BUILT	SALE DATE	SALE PRICE ($)	SALE PRICE (time-adjusted (TAS) ($)	TAS ($) (adjusted for site variable corner lot) per sq. ft. based on total building area)
105 Arjay Crescent	9,750.44	5,305	9	2012	2016	5,290,000	5,066,827	955.00
152 Highland Crescent	11,600	5,032	9	2002	2016	3,460,000	3,354,464	667.00
148 Highland Crescent	11,600	5,398	9	2004	2014	3,340,000	4,353,571	815.00
11 Birchwood Avenue	9,425	4,416	9	2003	2014	3,335,000	3,957,548	905.00
70 Highland Crescent	10,535.70	5,615	9	2008	2016	4,632,200	4,332,337	779.00
80 Highland Crescent	11,578.25	4,452	8.5	1999	2015	3,580,000	3,953,110	888.00
8 York Road	6,500	3,823	8.5	2001	2015	3,530,000	3,644,666	963.00
Median								888.00
Subject Property	9,295	5,399	9	1999	NIL	N/A	N/A	N/A

20MPAC’s Representative confirms that he has not adjusted for differences in characteristics such as lot size, total building area, quality, and year built. Instead, he only adjusted for site variance of corner lot.

21Based on the above analysis, MPAC’s Representative is of the view that the median adjusted TAS per square foot (“sq. ft.”) of $888.00 of all seven sales to be the best evidence. When this rate is applied to the Subject Property it results in a current value of $4,794,312 ($888.00 x 5,399 sq. ft. of total building area for the Subject Property).

22Therefore, MPAC’s Representative is of the opinion that current value of the Subject Property is $4,794,312.

Appellant’s Evidence in Support of Current Value

23In support of current value, the Appellant’s Representative relies on the Direct Comparison Approach, and presents a spreadsheet analysis of 11 sales which occurred in 2015 and 2016. Of these 11 sales, nine are located in the same homogeneous area C59 as the Subject Property and two sales are located in the adjacent homogeneous area identified as C84.

24The Appellant’s Representative provides both the actual and time-adjusted sale prices and relies on the time-adjusted sale prices in his analysis. The following Table 2 is the analysis of the 11 proposed comparable properties:

Table 2 Appellants’ Sales Analysis

11 PROPOSED COMPARABLE PROPERTIES	LOT SIZE (sq. ft.)	TOTAL BUILDING AREA (sq. ft.)	QUALITY RATING	YEAR BUILT	SALE DATE	SALE PRICE ($)	SALE PRICE (time-adjusted (TAS) ($)	TAS per sq. ft. ($)
11 York Road	9,425	5,740	8	1987	2016	3,522,000	3,374,076	587.8181
139 Highland Crescent	9,409	5,172	8	1990	2016	3,350,000	3,286,350	635.4118
136 Highland Crescent	9,389	5,888	8.5	1990	2016	3,710,000	3,275,930	556.374
57 York Road	9,425	5,615	8	1991	2015	2,875,000	2,967,000	528.4061
70 Highland Crescent	10,536	5,615	9	2008	2016	4,632,200	4,331,107	771.25
10 Suncrest Drive	12,000	5,991	8.5	1988	2015	3,250,000	3,799,250	634.16
3 Saloncia Road	12,362	6,504	9	1990	2016	4,050,000	3,973,050	610.86
17 Cedarwood Avenue	10,142	4,804	8	1987	2015	2,849,000	3,282,048	683.19
152 Highland Crescent	11,600	5,032	9	2002	2016	3,460,000	3,352,740	666.28
80 Highland Crescent	11,578	4,452	8.5	1999	2015	3,580,000	3,952,320	887.76
45 Beechwood Avenue	7,250	4,192	8	1991	2015	2,100,000	2,352,000	561.07
Median								634.16
Subject Property	9,295	5,399	9	1999	NIL	N/A	N/A	N/A

25Based on the above analysis, the Appellant’s Representative is of the view that the median adjusted TAS per square foot (“sq. ft.”) of $634.16 of the 11 sales to be the best evidence. When this rate is applied to the Subject Property it results in a current value of $3,423,828 ($634.16 x 5,399 sq. ft. of total building area for the Subject Property).

26On cross-examination the Appellants’ Representative argues that stucco-built homes are less expensive to build as opposed to stone or brick. It is the opinion of the Appellant’s Representative that the lower sale prices would account for the less expensively built homes.

27Based on the evidence, the Appellant’s Representative is of the opinion that the current value should be $3,423,828.

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

28Reviewing the evidence presented in support of current value, the Board finds the best evidence is the sales of three comparable properties (two of which are presented by MPAC and the Appellant, and one by MPAC), which occurred in 2016. These three comparable properties are located at 105 Arjay Crescent, sold at a time-adjusted sale price of $5,066,827; at 152 Highland Crescent, sold at a time-adjusted sale price of $3,354,464; and at 70 Highland Crescent, sold at a time-adjusted sale price of $4,332,337.

29The Board finds that these three comparable properties are located in the same homogeneous area as the Subject Property and have on average a year built of 2007, total building area of 5,317 sq. ft., lot size of 10,629 sq. ft. a quality rating 9 and sold at a time-adjusted sale price of $4,251,000 rounded. This is compared to the Subject Property with a year built 1999, total building area 5,399 sq. ft., a lot size of 9,295 sq. ft. and a quality rating 9.

30Based on the above analysis, the Board finds that the time-adjusted sale price of $4,251,000 represents the best evidence of an 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 current value to be $4,251,000.

31In regard to the sales of the remaining four comparable properties presented by MPAC (shown in the above analysis), the Board did not rely on these sales for the following reasons:

1. The two sales of comparable properties located at 148 Highland Crescent, sold in 2014; and at 11 Birchwood Avenue, sold in 2014 were not relied on because these sales are 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 three sales which occurred in the same homogeneous area as the Subject Property and for the reasons stated above in its determination of the correct current value.

2. The remaining two sales which occurred 80 Highland Crescent sold in 2015; and at 8 York Road, sold in 2015 were significantly smaller in total building area and are of a lower quality (8.5) than the Subject Property. Instead, the Board relies on the three sales which occurred in the same homogeneous area as the Subject Property with similar quality of construction (quality 9 rating) and with average total building area similar to the Subject Property.

32In reviewing the Appellant’s evidence in support of current value, the Board relies on two of the Appellant’s sale at 152 Highland Crescent, sold in 2016 and 70 Highland Crescent, sold in 2016, as stated above in its determination of current value.

33The remaining nine sales were not relied on for the following reasons:

1. The two comparable properties located in homogeneous neighbourhood C84 at 10 Suncrest Drive and at 3 Salonica Road were not relied on, because they are located in a different homogeneous area (C84) to the Subject Property which is in homogeneous are (C59), and are significantly larger in total lot size and in total building area. As stated above, Board relies on comparable properties in the same homogeneous area as the Subject Property with on average similar lot size and total building area.

2. The other seven comparable properties were not relied on because they are older built homes (1987 -1999), with lower quality ratings (8 and 8.5) and varying sizes (higher or lower) of total building area than the Subject Property. The Board finds that these comparable properties would require substantial adjustments for differences in characteristics to the Subject Property. As no quantifiable evidence was adduced before this Board to support the adjustment for the majority of these differences, the Board relies on the three comparable properties with the most similar characteristics to the Subject Property that are located in the same homogeneous area and subject to the same market influences.

3. Regarding the Appellants’ Representative argument that stucco-built homes are less expensive to build as opposed to stone or brick, and that the lower sale prices would account for the less expensively built homes. The Board finds that there are many personal and market influences that affect the sale prices of comparable properties (location, size, quality, design etc.) and that the Appellant presents no quantifiable evidence to demonstrate the impact of stucco-built homes on the sale prices of these comparable properties.

34Based on all the evidence, the Board finds the correct current value is $4,251,000.

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#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?

35Section 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

36MPAC 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 value of the property sold by its sale price.

37MPAC states that these 30 comparable properties with Property Code 301- Single-Family Detached (not on water) are similar property type residential homes to the Subject Property, sold over the period January 1, 2015 to December 31, 2016 and located within 1.0 kilometre of the Subject Property.

38MPAC states that the analysis of the sales of these 30 comparable properties shows a Level of Appraisal (“LOA”) of 0.958 and a Coefficient of Dispersion (“COD”) of 11.

39MPAC 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.

40Based on this finding, MPAC’s opinion is that an equity reduction is not required.

Appellant’s Evidence

41In support of equity, the Appellant’s Representative presents two equity reports. Equity Report #1 is based on 403 residential sales and Equity Report #2 is based on 388 residential sales. The sales used in both of these two reports were used by MPAC to compute the TAS for adjusting sale prices to the valuation date of January 1, 2016.

42The Appellant’s Representative testifies that the sales used in both reports occurred over the period 2014 to 2016 and presents the following findings of the two equity reports:

1. Equity Report #1 – the analysis shows a median ASR of 0.928. When the ASRs are capped at 1.70 it reflects a median of 0.911 and when an error rate of 50% is applied (plus or minus) the ASR is 0.905.

2. Equity Report #2 – the analysis shows a median ASR of 0.928. When the ASRs are capped at 1.70 it reflects a median of 0.91 and when an error rate of 50% is applied (plus or minus) the ASR is 0.903.

43Based on the above two equity analyses, the Appellant’s Representative is of the opinion that the correct ASR is 0.93 which supports an equity reduction.

44On cross-examination, the Appellant’s Representative states that the sales used in his reports include all residential properties except for (condominiums) and was unable to say exactly which neighbourhoods the sales were from, and how far away they are located in relation to the Subject Property.

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 Property Code 301 – Single Family Detached (not on water) as the Subject Property. They are similar in nature, character and function; and located within 1.0 kilometre of the Subject Property.

46The analysis shows that these 30 sales of similar properties have a LOA (ASR) of 0.958 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.

47The Board rejects the Appellant’s equity analyses of 403 and the 388 sales of proposed comparable properties for the following reasons:

1. The sales are from distances not defined in the report, which does not demonstrate their location in relation to the Subject Property.

2. The sales of these comparable properties include sales which occurred in 2014, which the Board finds too far from the valuation date to be a true test of equity.

3. The sales include residential properties such as townhouses and semi-detached that are not similar to the Subject Property, which is a single family detached home.

4. The Appellant’s Representative relies on Equity Report #2 with the median level of properties capped within a 50% error range (in a plus or minus range) with an ASR 0.903. The Board finds that this approach of capping seems to demonstrate a lack of confidence in the entire report presented in support of an equity reduction. Therefore, the Board rejects the report and puts no weight on it.

48Based on the above evidence, the Board finds that an equity reduction is not required.

CONCLUSION

49The Board finds the correct current value for the Subject Property at the valuation date January 1, 2016 is $4,251,000. However, MPAC is not seeking a higher correct current value, therefore, the Board will not increase the assessment and finds the correct current value is $3,872,000 for the 2020 taxation year and $3,946,000 for the 2021 taxation year.

50The Board also finds that an equity reduction pursuant to s. 44(3)(b) is not required.

ORDER

51The Board orders the returned assessment of $3,872,000 for the 2020 taxation year and $3,946,000 for the 2021 taxation year be confirmed.