Tribunals Ontario

Assessment Review Board

ISSUE DATE: April 26, 2022 FILE NO.: WR 177993

Assessed Person(s): Jasmine Kalra Appellant(s): Jasmine Kalra Respondent(s): Municipal Property Assessment Corporation Region 21 Respondent(s): City of Cambridge

Property Location(s): 52 Nottinghill Drive Municipality(ies): City of Cambridge Roll Number(s): 3006-070-066-03479-0000 Appeal Number(s): 3464475 and 3489932 Taxation Year(s): 2021 and 2022 Hearing Event No.: 763364

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

APPEARANCES:

Parties Jasmine Kalra Municipal Property Assessment Corporation City of Cambridge

Representative Guramandeep Singh Karen Ball Shawn McConkey

HEARD: April 4, 2022 by telephone conference call

ADJUDICATOR(S): Dan Weagant, Member

DECISION

OVERVIEW

1Jasmine Kalra (the “Appellant”) appealed the 2021 current value assessment of her property at 52 Nottinghill Drive in Cambridge because she believed that assessment was too high. The Appellant was represented at the hearing by her spouse, Guramandeep Singh. Pursuant to s. 40(26) of the Assessment Act (“Act”), the Appellant is deemed to have brought the same appeal in respect of the 2022 taxation year.

Background

2The Municipal Property Assessment Corporation (“MPAC”) returned the current value of the subject property for 2021 at $419,000 in the Residential property class. During the Request for Reconsideration process leading up to the filing of the appeal and this hearing, MPAC offered a reduced value of $412,000 to the Appellant, in recognition that the subject property did not have a fireplace. A fireplace was reflected in the original assessment.

3In preparation for the hearing, MPAC advanced a position that the current value of the subject property should be $439,000. In recognition of its earlier offer to the Appellant, MPAC submitted a recommendation of $412,000.

4The City of Cambridge submitted that it agreed with MPAC that the correct current value of the subject property is $412,000 and that the assessment should be reduced, consistent with MPAC’s submissions.

5The Appellant believed the recommended assessment was still too high. Instead, the Appellant submitted that the assessment should be reduced to $348,000, resulting from adjustments in value made by comparing the subject property to the assessment of another property in the same neighbourhood.

Areas of Agreement

6The Parties agreed that the subject property is in the Residential property class.

Issues for the Hearing

7At issue in this proceeding is:

1. A determination of the current value of the subject property; and
2. Whether a reduction in the current value determined should be made for it to reflect equitable assessment when reference is made to the assessments of similar lands in the vicinity.

Result

8The Board finds that the current value of the subject property is $426,500 for the 2021 and 2022 taxation years. The Board also finds that, when reference is made to the assessments of similar lands in the vicinity, this current value requires a reduction for it to represent equitable assessment. Accordingly, the assessment of the subject property is reduced from $419,000 to $384,000 for the 2021 taxation year and is reduced from $412,000 to $384,000 for the 2022 taxation year.

PRELIMINARY MATTERS

9Confusion over MPAC correspondence on the Appellant’s part led to a request by Mr. Singh that the appeal filed be applied to all of the taxation years for which January 1, 2016 is the valuation day.

10Both the Appellant and MPAC filed copies of notices of assessment that had been issued by MPAC in 2016. The first was dated July 2016 and was an ‘assessment notice’ indicating that for the taxation years 2017 through 2020 the assessment of the subject property was $419,000. The second document was dated August 2016 and was an ‘assessment change notice’, advising that due to the addition of the subject dwelling to the lot earlier in 2016, the assessment for the 2016 taxation year had increased, effective May 5, 2016, to $348,000.

11It is the timing of these notices that caused the confusion. Not being familiar with this type of correspondence, the Appellant interpreted the assessment path to mean that in July 2016 the assessment was increased to $419,000 and that in August it was reduced to $348,000. Given the sequence of the notices it is understandable that a person not familiar with property assessment might think that the latest notice is the one to go by.

12However, in this case, despite the sequence in which these notices were issued, it is clear that the first notice applied to the 2017 through 2020 taxation years and that the second notice issued applied to the 2016 taxation year. The first notice indicated that the assessment of the subject property, for the 2017 through 2020 taxation years was $419,000.

13While the Board recognizes the confusion that can arise when properties are improved near or during years where the valuation days change, the earliest of the two notices was clear in that it established the assessment for 2017 and onward at $419,000.

14The Appellant’s request is denied.

ANALYSIS

Description of Subject Property

15The subject property is a single-family dwelling of 1,929 square feet on two-storeys. The house was constructed on a lot of .07 acres in 2016. The property has a quality class of 6.5 applied by MPAC. This quality class is consistent throughout the neighbourhood.

Issue 1 – What is the current value of the subject property for the 2021 taxation year?

MPAC’s Case

16MPAC undertook the direct comparison approach to determine the current value of the subject property. The direct comparison approach is a common method of determining the value of a given property by comparing it to the time-adjusted sale (“TAS”) values of comparable properties that have sold at or near the valuation day applicable to the taxation years under appeal. In this case, the valuation day is January 1, 2016. TAS values are derived from the actual sale of a property that is adjusted for the impacts of time on that sale value owing to changes in the market.

17The adjustments were made by applying time adjusted factors (“TAFs”) that are determined by comparing a large number of sales over a certain period. Each month between January 2015 and December 2016 was assigned a TAF, based on the analysis of how prices changed over that time. The application of TAFs allow a direct comparison of properties that sold at different times as though they all sold on the valuation day.

18By comparing the subject property to other comparable properties, MPAC determined a range of values within which the subject property’s value ought to fall. Descriptions of MPAC’s six proposed comparable properties follow:

1. 121 Greengate Boulevard– TAS value of $459,622; built in 2015 on a .07 acre lot; total building area of 1,783 square feet with 750 square feet of finished basement.

2. 216 Maple Bush Drive – TAS value of $417,791; built in 2013 on a .09-acre lot; total building area of 1,657 square feet with no finished basement.

3. 52 Hinrichs Crescent– TAS value of $442,014; built in 2012 on a .10-acre lot; total building area of 1,926 square feet with no finished basement; one fireplace.

4. 96 Broadoaks Drive– TAS value of $454,886; built in 2012 on a .09-acre lot; total building area of 1,722 square feet with 846 square feet of finished basement.

5. 132 Broadoaks Drive– TAS value of $557,946; built in 2013 on a .11-acre lot; total building area of 2,145 square feet with no finished basement; one fireplace.

6. 87 Broadoaks Drive– TAS value of $535,252; built in 2012 on a .1-acre lot; total building area of 1,074 square feet with no finished basement.

19All six of MPAC’s proposed comparable properties are two-storey dwellings with an ‘average’ condition code and a 6.5 quality of construction rating applied by MPAC. Five of the six properties have three bedrooms. 132 Broadoaks Drive is a four-bedroom house. Only the proposed comparable properties at 52 Hinrichs Crescent and 87 Broadoaks Drive have fireplaces.

20From this comparison, MPAC considered comparable properties 1) through 4) as providing an appropriate range of value for the subject property, owing to their respective characteristics and their comparability to the subject property. In particular, MPAC considered comparable property 3) to represent the best comparable within this range. The rounded, TAS values of the four comparable properties cited by MPAC are $418,000, $442,000, $455,000 and $460,000; all rounded.

21Having determined the range of $418,000 to $460,000 as the appropriate range of the current value of the subject property, MPAC selected $439,000 as the correct current value, being the midpoint of that range. In recognition of its previous settlement offer, MPAC recommended that the Board reduce the assessment to $412,000.

The City’s Case

22The City also adopted the direct comparison approach to value. It compared the subject property to nine properties that sold between June 2014 and November 2016. These nine sales had an average, unadjusted sale price of $424,640 and a median sale price of between $416,000 and $420,000, or approximately the same as the returned current value assessment.

23The City acknowledged previous conversations with the Appellant and MPAC and in consideration of structural description changes during those discussions, the City agreed with MPAC on a recommended current value of $412,000.

The Appellant’s Case

24The Appellant relied on a comparison of the subject property to a single property in evidence. Further, the Appellant chose to make the comparison based on the assessment of the comparable property, rather than the sale value recorded for the property.

25The Appellant submitted that when compared to 52 Hinrichs Crescent (MPAC Comparable #4) the assessment of the subject property at $419,000 is too high because it has a smaller lot, no fireplace, no fence and no driveway. Taking the 52 Hinrichs Crescent assessed value of $417,000 the Appellant deducted the values of those differences to arrive at a value of $348,000 for the subject property.

Findings on Issue 1

26The Board finds that the best evidence of current value is that of MPAC. Its market analysis grid clearly set out the characteristics of the subject property and compared them to the same characteristics of six other properties in the same neighbourhood.

27The City was aligned with MPAC in this appeal.

28The Appellant did not prepare a case based on sales of comparable properties. Instead, the Appellant compared the subject property to the assessment of another property in the neighbourhood. Comparing a property to the assessment of another property does not meet the definition of current value in the Act. Section. 1.(1) of the Act states:

“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;”

29This definition is clear that sales between willing sellers and willing buyers are the best indicators of current value. Therefore, the Board prefers MPAC’s approach.

30Five of the six properties adduced by MPAC have a high level of comparability. One property, at 132 Broadoaks Drive differed from the subject property as it has a larger dwelling, a larger lot, four bedrooms and a fireplace. The Assessment Review Board (the “Board”) disregards this comparable property because of those differences.

31The TAS values of MPAC’s five remaining comparable properties range from $417,791 to $535,252. 215 Maple Bush Drive is a smaller dwelling than the subject property, without central air conditioning and is older than the subject dwelling by four years. Given these differences, the Board finds that, on a balance of probabilities, the current value of the subject property is higher than the $417,791 TAS value of 215 Maple Bush Drive.

3252 Hinrichs Crescent has a TAS value of $442,014. It has a fireplace valued at $7,000, whereas the subject property does not have a fireplace. 52 Hinrichs Crescent also has a larger lot than the subject property, a slightly larger garage and nearly the same size dwelling. After accounting for the $7,000 value attributed to the fireplace, the Board finds that, on a balance of probabilities, the $ 435,014 TAS value of 52 Hinrichs Crescent is higher than the value of the Subject Property.

33This comparison creates a range within which the correct current value of the Subject Property lies. The Board finds that the midpoint between the TAS values for 215 Maplebush Drive and 52 Hinrichs Crescent, is $426,500 (rounded); representing the correct current value of the Subject Property.

Issue 2 – Is a reduction in the current value determined required for it to reflect equitable assessment when reference is made to the assessments of similar lands in the vicinity?

Appellant’s Case

34The case put forward by the Appellant was essentially an argument for a reduction in current value for the purposes of equitable assessment when reference is made to the assessments of similar lands. The Appellant selected 52 Hinrichs Crescent, with an assessment of $417,000 and made deductions from that assessment for features that were not present at the subject property during the year under appeal. Those features included central air conditioning, a fireplace, an asphalt driveway and a perimeter fence.

35Only the fireplace that exists at 52 Hinrichs Crescent had a value associated with it in the Appellant’s submissions. There was no evidence at the hearing to support the values of the other features. The appellant submitted that the combined value of these differences was $69,000 and that the assessment of the subject property should be $69,000 less than the assessment at 52 Hinrichs Crescent. The difference is $348,000.

MPAC’s Position

36MPAC argued that the Appellant had not filed a pleading in accordance with the Board’s rules with respect to whether the current value determined should be reduced for the purposes of equitable assessment. It argued therefore that whether an equity adjustment is required is not a live issue in this case.

City’s Position

37The City compared the assessments of the nine sales cited in its report with the sale values of those same sales. The result was a median Assessment to Sale Ratio (“ASR”) of 0.95. Like MPAC, the City argued that since a pleading on the issue of equitable assessment had not been filed by the appellant, the issue did not apply in this case.

Findings on Issue 2

38The Appellant’s comparison of the subject property to the assessment of a nearby property is one way of determining whether the current value determined reflects equitable or fair assessment. However, this approach requires two parts. First, the similarity of the subject property to the property with which the comparison is made needs to be suitable. In this case the Board accepts that 52 Hinrichs Crescent and the subject property are similar.

39The second part of such a comparison is the quantification of the value of the differences. In this case, the only differing feature between the subject property and 52 Hinrichs Crescent with a known value is the fireplace, at $7,000. The remaining features had no value in evidence. As a result, the Board had no means to complete a meaningful comparison between the Subject Property and 52 Hinrichs Crescent to determine the equitable assessment question.

40Both the City and MPAC submitted that the Appellant had not filed a pleading that a reduction in the current value determined required a downward adjustment for it to reflect equitable assessment when reference is made to the assessments of similar lands in the vicinity. For this reason, the City and MPAC submitted that equitable assessment was not an issue in this case and subsequently, the Board should find that the current value determined is the assessment.

41The Board is guided by the Act in these matters and specifically in reference to downward adjustments for the purposes of equitable assessment, s. 44 (3) is instructive. That section says:

“For 2009 and subsequent taxation years, in determining the value of which any land shall be assessed, the Board shall,

(a) determine the current value of the land; and

(b) 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”. (emphasis added)

42The highlighted words in this passage are particularly determinative in the Board’s deliberation on the point of whether or not ‘equitable assessment’ is a live issue in this hearing. Coupled with the word ‘and’, the word ‘shall’ is not ambiguous. It is a clear indication that the legislature intended that the Board is required to deliberate on both passages (a) and (b) that follow.

43The question then is not, as the City and MPAC suggest, whether equitable assessment is a live issue, but that the Board shall determine if a reduction in the current value determined is required for that value to be considered equitable when reference is made to the assessments of similar lands in the vicinity. The fact that neither the City nor MPAC had prepared a specific ‘equity’ argument is not relevant to the Board’s responsibility reflected by this section of the Act.

44Just as the Board is required to make a finding of current value, it must also determine if that value reflects equitable assessment. Those findings must be based on the evidence seen and the testimony heard by the Board at the hearing.

45In this case, there are 10 properties advanced by the parties that sold within the 12 months before and 12 months after the January 1, 2016 valuation day. Those 10 properties have a time adjusted sale value and a corresponding ASR. The Board finds that all 10 of these properties are similar lands in the vicinity given that they are two-storey, single family dwellings in the same neighbourhood as the subject property. Table B summarizes these 10 properties and the assessment to sale comparison.

Property	Party	Sale value / TAS value ($)	2016 current value assessment ($)	Assessment to Sale Ratio (“ASR”)
121 Green Gate Boulevard	MPAC	495,000 / 459,622	397,000	0.86
215 Maple Bush Drive	MPAC and City	393,200 / 417,791	379,000	0.91
52 Hinrichs Crescent	MPAC	420,000 / 442,014	417,000	0.94
96 Broadoaks Drive	MPAC	489,900 / 454,886	405,000	0.89
132 Broadoaks Drive	MPAC	515,000 / 557,946	440,000	0.79
87 Broadoaks Drive	MPAC	498,000 / 535,252	447,000	0.84
48 Sparrow Avenue	City	397,200 / 374,957*	357,000	0.95
63 Hinrichs Crescent	City	420,000 / 393,120*	380,000	0.97
125 Green Gate Boulevard	City	469,000 / 428,197*	371,000	0.87
144 Maple Bush Drive	City	550,000 / 510,950*	467,000	0.91

*Sale values for City properties adduced were adjusted by the Board using MPAC TAFs for consistency

46The ASR is a common approach used by parties in the Board’s proceedings as a method of determining how the assessments of properties compare to their respective current values.

47ASRs in evidence show that all of the assessments of similar lands in the vicinity are below their respective current values, as determined by time-adjusted sale values. This is clear evidence that the assessments of similar lands in the vicinity are assessed below their respective current values.

48The median ASR value of the 10 properties in evidence is 0.90. The Board finds that when reference is made to the assessments of similar lands in the vicinity, the current value determined for the subject property requires a reduction of 10 percent for it to reflect equitable assessment. That result is $384,000 (rounded).

CONCLUSION

49The Board finds that the current value of the subject property is $426,500. The Board also finds that the equitable assessment of the subject property is $384,000.

ORDER

50The Board orders that the assessment of the property at 52 Nottinghill Drive is reduced from $419,000 to $384,000 for the 2021 taxation year and is reduced from $412,000 to $384,000 for the 2022 taxation year, in the Residential property class.

"Dan Weagant"

DAN WEAGANT MEMBER Assessment Review Board Website: www.tribunalsontario.ca/arb