Clara Adamse v. Municipal Property Assessment Corporation Region 14, 2022 CanLII 69391

Assessment Review Board

Tribunals Ontario Tribunaux décisionnels Ontario Assessment Review Board Commission de révision de l’évaluation foncière

ISSUE DATE: July 27, 2022 FILE NO.: WR 180542

Assessed Person: Clara Adamse Appellant: Clara Adamse Respondent: Municipal Property Assessment Corporation Region 14 Respondent: Town of Richmond Hill

Property Location: 61 Edgar Avenue Municipality: Town of Richmond Hill Roll Number: 1938-060-040-53000-0000 Appeal Numbers: 3478955 and 3488504 Taxation Years: 2021 and 2022 Hearing Event No.: 769469

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

APPEARANCES:

Parties	Representative
Clara Adamse	Self-represented
Municipal Property Assessment Corporation	Elva Yu
Town of Richmond Hill	No one appeared

HEARD: July 19, 2022 by telephone conference call

ADJUDICATOR: Jean-Paul Pilon, Member

DECISION

OVERVIEW

1Clara Adamse (the “Appellant”) is the owner of a property at 61 Edgar Avenue in the Town of Richmond Hill (the “Subject Property”).

2The Municipal Property Assessment Corporation (“MPAC”) returned an assessment of the Subject Property of $1,726,000 for the 2021 taxation year, and the Appellant appealed that assessment on the basis that it was incorrect as in too high. A further appeal for the 2022 taxation year was deemed pursuant to section 40(26) of the Assessment Act, R.S.O. 1990, c. A. 31 (the “Act”).

Background

3The Subject Property is a detached single-family residential home in the Town of Richmond Hill. The evidence before the Assessment Review Board (the “Board”) is that the two-storey house on the Subject Property has interior space of 2,737 square feet (“sq. ft.”), has a quality of construction using MPAC’s measure of 6.5, was built in 1982, and has a lot area of 0.5 acres.

4MPAC’s position at the hearing was that the current value of the Subject Property was $2,008,000, to be reduced by 9% on account of an adjustment in equity to $1,827,280. The Appellant argued that after any equitable adjustment, the assessment of the Subject Property should be reduced to $1,100,000.

Issues for the Hearing

5At issue in this proceeding is:

1. the current value of the Subject Property; and
2. the adjustment to be made in equity.

Result

6The assessment of the Subject Property returned at $1,726,000 is confirmed.

ANALYSIS

7Section 44(3) of the Act provides first, that the Board is to “determine the current value of the land.” The Board is then directed to “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 similar lands in the vicinity if such an adjustment would result in a reduction of the assessment of land.”

Issue 1 – Current Value

8The Appellant first argued that the direct comparison approach was not useful in determining the current value of the Subject Property because properties in her immediate neighbourhood had been sold to developers at inflated prices.

9The Board did not agree that either of the other two more commonly used approaches to determining value, the income approach and the cost approach, would result in accurate analyses in these circumstances. The Appellant did not suggest any alternate means by which the Board could determine the current value of this residential property. In addition, there was no evidence before the Board that any of MPAC’s comparable properties had been sold to developers, or that any relevant transactions had been other than at arm’s length.

10In its Valuation Report, MPAC determined the current value of the Subject Property to be $2,008,000. This was the time-adjusted median sale price of four properties located at 20 Garden Avenue, 17 Garden Avenue, 16 Birch Avenue and 103 Birch Avenue, all situated in the same Richvale neighbourhood as the Subject Property according to MPAC’s map.

11The sales at 17 Garden Avenue and 16 Birch Avenue were both disregarded by the Board in its analysis simply because they sold in 2017, more than one year after the valuation date of January 1, 2016. With the sale of two other comparable properties in MPAC’s evidence, inaccuracies introduced with the passage of time meant that their inclusion in the Board’s analysis was unnecessary.

1220 Garden Avenue was inferior to the Subject Property because it included land measuring 0.3 acres compared to the Subject Property’s 0.5 acres. Otherwise, this property was very similar to the Subject Property because it was built two years earlier, with the same quality of construction, and had just 43 sq. ft. more interior space than the Subject Property. MPAC applied time adjustments to estimate what sale prices would have been at the valuation date, and those adjustments were not challenged at the hearing. After applying its time adjustment in this instance, the sale price of this property was $1,764,450.

13103 Birch Avenue was superior to the Subject Property because it included 0.92 acres of land, 0.42 acres more than at the Subject Property. In other respects, this property was very similar to the Subject Property, having been effectively built five years earlier, with the same quality of construction and only 271 sq. ft. less interior space. Its time-adjusted sale price was $2,056,988.

14The Appellant relied on a list of 23 properties taken from MPAC’s website. Seven of those had been the subject of sale transactions, but only two transacted within one year of the valuation date. The first of these was 52 Edgar Avenue but this property was far superior to the Subject Property, with twice the building space and a higher quality rating of 8.5 compared to the Subject Property’s 6.5. The Board finds that this was not comparable to the Subject Property.

15The second of these properties was 71 Edgar Avenue which sold on January 22, 2015. This was included in MPAC’s report but was not considered because it was inferior to the Subject Property, with half the site area, a lower quality rating of 6 and a building of 300 sq. ft. smaller than the one at the Subject Property. It sold for a time adjusted sale price of $1,646,380.

16Bracketing is the means by which the Board can determine a current value of the Subject Property in these circumstances. In 1210299 Ontario Inc. v Municipal Property Assessment Corporation, Region 15, 2019 CanLII 18811 at para. 44, the Board wrote that “bracketing is based on the general principle that a comparable property that has superior attributes to the subject will sell for more, those that have similar attributes will sell for similar amounts, and inferior attributes will sell for less.”

17As noted earlier, 20 Garden Avenue was inferior to the Subject Property and had an adjusted sale price of $1,764,450. 103 Birch Avenue was superior to the Subject Property and logically sold for more, at an adjusted price of $2,056,988. 71 Edgar Avenue was even more inferior to the Subject Property than 20 Garden Avenue and was therefore not considered in the analysis. The Board notes however that the adjusted sale price for this property was $1,646,380 which was proportionately lower than the adjusted sale price of 20 Garden Avenue.

18The Board determines the current value of the Subject Property to be at the midpoint between the adjusted sale prices of 103 Birch Avenue ($2,056,988) and 20 Garden Avenue ($1,764,450). This is $1,910,719.

Finding on Issue 1

19The current value of the Subject Property is $1,910,719 for the 2021 and 2022 taxation years.

Issue 2 - Equity

20MPAC considered the assessments and time-adjusted sale prices of 30 single-family dwellings that transacted in 2015 and 2016 which were located within 1 kilometre of the Subject Property. With this data, MPAC determined a median assessment to sale ratio (“ASR”) of 0.91. When applied, the current value of the Subject Property would be reduced by 9% to make it equitable with similar properties in the vicinity pursuant to section 44(3)(b) of the Act.

21On equity, the Appellant essentially argued that substantially superior properties to the Subject Property on the same street had assessments that were not proportionately higher than the assessment for the Subject Property. For example, 57 Edgar Avenue in her evidence had an assessed value of $2,323,000 when it had a superior quality rating of 7.5 compared to the Subject Property’s 6.5, and had substantially more interior space of 4,636 sq. ft. compared to the Subject Property’s 2,737 sq. ft. In essence, the Appellant argued that it was inequitable for that property to have an assessed value merely 34.6% higher than the returned assessment for the Subject Property when it had nearly 70% more interior space.

22A further example cited by the Appellant from her material was 60 Edgar Avenue. Like 57 Edgar Avenue, 60 Edgar Avenue included an almost identical quantity of land as the Subject Property. However, the building at 60 Edgar Avenue was 18 years newer, had a quality rating of 7.5, had more than twice the interior space yet was assessed at $2,481,000 when the Subject Property’s assessment was returned at $1,726,000.

23Determining whether an adjustment in equity is necessary requires an analysis of the assessments of similar properties in the vicinity for it to comply with section 44(3)(b) of the Act. Unlike in the direct comparison approach used to determine value, evidence of sale prices is not necessary to determine equity. However, in its review decision Menard v Municipal Property Assessment Corporation, Region 28, 2021 CanLII 59499 at para. 29, the Board found that the absence of sales data “makes any conclusion significantly less reliable unless such properties are very similar to the property at issue in an appeal, so that their assessments can be compared to one another (italics added).” Otherwise, the Board wrote, “the analogy would be comparing apples to oranges, instead of comparing apples to apples when comparing assessments alone.”

24Most of the relevant properties in the Appellant’s evidence were similar in land size but not in building size to the Subject Property. In addition, there was no evidence at the hearing explaining why those properties had been assessed in the way that they were. However, the Board notes that two of the properties on the Appellant’s list were very similar to the Subject Property: 58 Edgar Avenue and 48 Edgar Avenue, both across the street and very proximate to the Subject Property.

25The dimensions of the land and building at 58 Edgar Avenue were very similar to those at the Subject Property, with the former having only 66 sq. ft. less exterior space and 659 sq. ft. more interior space than the Subject Property. Its assessment was very similar to the Subject Property, where 58 Edgar Avenue was assessed at $1,796,000 and the assessment of the Subject Property was returned (and is to be confirmed) at $1,726,000, a difference of 4%. This was not indicative of further inequity.

26At 48 Edgar Avenue, the difference in exterior space was minimal at 24 sq. ft. and its interior space was 249 sq. ft. larger than the Subject Property. Its assessment was $1,698,000, an even smaller difference over the returned assessment of the Subject Property.

27As to MPAC’s evidence, the Board has on several occasions expressed its preference for ASR studies like the one relied upon by MPAC to determine equity, including in 2002556 Ontario Inc. v. Municipal Property Assessment Corp., Region No. 13, [2014] O.A.R.B.D. No. 84 at para. 30, Pittens v Municipal Property Assessment Corporation, Region 07, 2016 CanLII 53151 at para. 16, Millar v Municipal Property Assessment Corporation, Region 28, 2017 CanLII 46008 at para. 13, and in Tocheri v. Municipal Property Assessment Corp., Region No. 32, [2014] O.A.R.B.D. No. 535 at para. 21. The first of these decisions noted that “a probative ASR analysis must be based on a representative sample, that demonstrates a definitive trend…(and) is without question the best method for determining the equity of assessments.”

28The Board would not have made any adjustment for equity based on the Appellant’s evidence. However, the Board is satisfied that MPAC’s evidence does, in fact, demonstrate that an adjustment in equity is required and therefore reduces its determined current value of the Subject Property of $1,910,719 by 9% to $1,738,754. As this was very close to MPAC’s returned assessed value of $1,726,000, the Board confirms MPAC’s assessment as the current value of the Subject Property after adjusting for equity.

CONCLUSION

29The Board finds that the current value of the Subject Property is $1,910,719 for the 2021 and 2022 taxation years.

30A reduction in the current value of the Subject Property was necessary to make it equitable with similar lands in the vicinity. The resulting adjusted current value was $1,738,754 which suggested that MPAC’s returned assessment was essentially correct.

31The Board therefore confirms the assessment of the Subject Property for the 2021 and 2022 taxation years.

ORDER

32The Board orders that the assessment of the Subject Property at 61 Edgar Avenue is confirmed at $1,726,000 in the residential property class.