Tribunals Ontario
Assessment Review Board
ISSUE DATE: August 19, 2022
FILE NO.: WR 180692
Assessed Person(s): JRMD Investments Inc.
Appellant(s): Gurjit S. Grewal
Respondent(s): Municipal Property Assessment Corporation Region 15
Respondent(s): City of Brampton
Property Location(s): 287 Deerhurst Drive
Municipality(ies): City of Brampton
Roll Number(s): 2110-120-002-09444-0000
Appeal Number(s): 3242978, 3305400, 3359954, 3406986, 3444978 and 3489026
Taxation Year(s): 2017, 2018, 2019, 2020, 2021 and 2022
Hearing Event No.: 770564
Legislative Authority: Section 40 of the Assessment Act, R.S.O. 1990, c. A.31
APPEARANCES:
| Parties | Representative |
|---|---|
| JRMD Investments Inc. | No one appeared |
| Gurjit S. Grewal | No one appeared |
| Municipal Property Assessment Corporation | Marissa Cheddi and Matt Irwin |
| City of Brampton | No one appeared |
HEARD: July 20, 2022 by telephone conference call
ADJUDICATOR(S): Anthony LaRegina, Member
DECISION
OVERVIEW
1Gurjit S. Grewal, a property tax consultant, filed a property assessment appeal on behalf of JRMD Investments Inc. with the Assessment Review Board (the “Board”) for the 2017 taxation year regarding its property located at 287 Deerhurst Drive (the “Subject Property”) in the City of Brampton (the “City”). Pursuant to s. 40(26) of the Act, the Appellant is deemed to have brought the same appeal in respect of the 2018, 2019, 2020, 2021 and 2022 taxation years.
2Mr. Grewal failed to appear at the hearing.
3The Municipal Property Assessment Corporation (“MPAC”) filed for an increase in assessment value and therefore, requested that the hearing proceed in Mr. Grewal’s absence. At the time of the hearing the Board had not received any notification from Mr. Grewal to explain his absence and therefore, decided to proceed.
4Pursuant to the provisions of the Assessment Act, R.S.O. 1990, c. A.31 (the “Act”), MPAC conducted a general reassessment of the Subject Property and determined that its current value assessment (“CVA”) was $3,090,000 for the 2017 to 2022 taxation years. In the documentary evidence filed with the Board, the Appellant took the position that MPAC’s CVA is too high and that the correct CVA should be reduced to $2,700,000. MPAC takes the position that the CVA should be increased from $3,090,000 to $3,515,000 for the 2017 to 2022 taxation years.
5Pursuant to s. 40(11) of the of the Act, the City is a party to this proceeding as the municipality in which the Subject Property is located. No one attended on behalf of the City.
6Pursuant to s. 44(3)(b) of the Act, MPAC takes the position that an equitable reduction of the current value is not required. In the documents filed with the Board the Appellant has not taken any position on equity.
Issues for the Hearing
7The issues in this proceeding are:
- a determination of the correct current value of the Subject Property; and
- whether an equity reduction in the current value should be made to compensate for the assessment of similar lands in the vicinity.
Result
8The Board finds that the correct current value of the Subject Property for the 2017 to 2022 taxation years is $3,090,000. Pursuant to s. 44(3)(b) of the Act, no further equitable reduction is required to compensate for the assessment of similar lands in the vicinity. The Board will confirm the returned assessment value of $3,090,000 for the 2017 to 2022 taxation years.
Description of Subject Property
9The Subject Property is an industrial property located at 287 Deerhurst Drive in the City of Brampton. The Subject Property is a standard industrial building property, code 520, located on a 1.31-acre rectangular lot. The zoning of the Subject Property is M3-1565 which is designed to allow for various industrial uses and a few commercial uses. The building has 27,066 square feet of building area constructed in 1989. The building area is divided between two units.
ANALYSIS AND FINDINGS
Issue 1 – A determination of the correct current value of the Subject Property
10The first issue to be determined on this appeal is the correct current value of the Subject Property for the 2017 through 2022 taxation years. Pursuant to s. 19(1) of the Act, the assessment of land shall be based on its current value. The Act also provides that for the 2017 to 2022 taxation years, MPAC is required to assess this value as of the valuation date, January 1, 2016 (“current value”). As defined in the Act, “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.”
MPAC’s Evidence
11MPAC submitted two exhibits as part of its evidence package: Exhibit 1, the Statement of Response and Exhibit 2, the Valuation Report.
12To determine the correct current, MPAC utilizes the direct sales comparison approach. MPAC submits into evidence the sales of three similar industrial properties located within 7.35 kilometers of the Subject Property that sold between April 2015 and June 2016. These properties are also within 0.18 acres of the Subject Property, within 4,287 square feet of building area, and built within two years of the Subject Property’s effective year built.
13Comparable properties are rarely sold on the valuation day of January 1, 2016, so their sale values are typically time-adjusted to greater or reduced values depending on whether the date of the sale occurred before or after the valuation day. In this case, MPAC has time-adjusted the sale values of the properties, between January 2015 and December 2016, based on the sales of 247 properties in the neighbourhood and areas adjacent to the Subject Property. MPAC has demonstrated that over the 23-month period there has been an average increase of 21.22% in market value. MPAC has also developed Time Adjustment Factors based on the study and applied these factors to the actual sale values of the three comparable properties to reflect the January 1, 2016 valuation date.
14The data relating to the sale of the three comparable properties is contained in the following chart.
| Subject Property | Property #1 | Property #2 | Property #3 | |
|---|---|---|---|---|
| Roll Number | 211012000209444 | 211012000209440 | 211012000215321 | 211015011619742 |
| Address | 287 DEERHURST DR | 241 DEERHURST DR | 25 DEVON RD | 90 HEDGEDALE RD |
| Neighbourhood | 101- 4110 | 101- 4110 | 101- 4110 | 104 -4120 |
| Property Code & Desc. | (520) Standard Industrial Properties Not Specifically Identified By Other Industrial Property Codes | (520) Standard Industrial Properties Not Specifically Identified By Other Industrial Property Codes | (530) Warehousing | (520) Standard Industrial Properties Not Specifically Identified By Other Industrial Property Codes |
| Distance in km | 0.1017 | 7.142 | 7.3755 | |
| Sale | ||||
| Sale Date | 2015/06/01 | 2015/04/30 | 2016/06/29 | |
| Sale Amount | $3,600,000 | $3,150,000 | $2,850,000 | |
| Time Adjusted Sale Amount | $3,806,329 | $3,390,326 | $2,725,010 | |
| Site | ||||
| Actual Site Area (acres) | 1.31 | 1.44 | 1.45 | 1.13 |
| Source Improvements | ||||
| Total Floor Area (sq. ft.) | 27,066 | 26,638 | 27,291 | 22,239 |
| Weighted Average Year Built | 1989 | 1990 | 1989 | 1991 |
| Weighted Average Height | 17.06 | 21.29 | 18.7 | 18.91 |
| Analysis | ||||
| Time adjusted Sale Amount per sq. ft. | $142.89 | $124.23 | $122.53 |
Average Time adjusted Sale Amount per square foot: $129.88
15MPAC submits that the three comparable properties are very similar and therefore calculated the average time-adjusted rate per square foot for the three properties resulting in a value of $129.88. Applying the average rate per square foot to the Subject Property’s building area of 27,066 square feet, MPAC determined a current value of $3,515,332 rounded to $3,515,000.
16MPAC requests that the Board find the correct current value of the Subject Property to be $3,515,000 and therefore increase the CVA from $3,090,000 to $3,515,000.
The Appellant’s Evidence
17While the Appellant did not appear, they had submitted Exhibit 3 into evidence that includes four comparable property sales and their respective photographs.
18The first page of the Appellant’s submission contains the following chart of the four comparable properties resulting in an average sale value per square foot of $103.57. Applying this value to the Subject Property’s building area, which the Appellant claims is 26,066 square feet, results in a current value of the Subject Property of $2,700,000 (rounded).
| Address | SQ FT | HGT | Acres | Sale Price $ | Sale Date | Rate/S.F. $ |
|---|---|---|---|---|---|---|
| Subject Property 287 Deerhurst Drive |
26,066 | 21 | 1.31 | CVA $3,090,000 | 114.17 | |
| 25 Sun Pac Boulevard | 26,550 | 18 | 2.00 | 2,500,000 | 2016/04 | 94.16 |
| 153 Rutherford Road South | 22,452 | 26 | 1.15 | 2,100,000 | 2015/04 | 93.53 |
| 7 Selby Road | 23,500 | 18 | 2,666,000 | 2016/04 | 113.44 | |
| 43 Wentworth Court | 23,719 | 18 | 1.34 | 2,700,000 | 2015/08 | 113.83 |
19MPAC submits that the comparable property sales submitted by the Appellant are not similar to the Subject Property and should not be considered for the following reasons:
a. Date of Sale of 25 Sun Pac Boulevard was July 2016 and not April 2016.
b. Appellant has not provided the lot size for 7 Selby Road.
c. The building areas of each of the properties is incorrect and the correct square footage should be as follow, 25 Sun Pac Boulevard 26,540, 153 Rutherford Road South 22,784, 7 Selby Road 23,892 and 43 Wentworth Court 22,767.
d. 25 Sun Pac Boulevard has a property code of 580 which indicates an industrial mall with three or more units. In this case the property has six income units and MPAC submits that this property is not similar to the Subject Property which is coded 520 with only two units.
e. 153 Rutherford Road is 0.28 acres smaller and built in 1981 which is eight years older than the Subject Property. MPAC submits this property is not comparable as it is inferior in lot size, age and building area to the Subject Property.
f. 7 Selby Road has a smaller lot by 0.31 acres, built in 1978 and the building area is 3,150 square feet smaller than the Subject Property. MPAC submits this property is also not comparable to the Subject Property.
g. 43 Wentworth Court is also property coded 580, has three or more tenants and was a purpose-built property and therefore, not comparable to the Subject Property.
In respect to the Appellant’s evidence, the Board also notes that the building area of the Subject Property is listed as 26,066 square feet versus MPAC’s 27,066 square feet and furthermore, that the sale values of the comparable properties are not time-adjusted.
Findings on Issue 1 - Current Value of the Subject Property
20To establish a current value for the Subject Property, the Board has analysed the evidence submitted by both parties and concludes that the best evidence in support of the current value is the three comparable property sales provided by MPAC, 241 Deerhurst Drive, 25 Devon Road and 90 Hedgedale Road.
21The Board finds that the time-adjusted sale value range of these three properties is between $2,725,010 and $3,806,329 and that the correct current value of the Subject Property will fall within that range.
22Analyzing each of the comparable properties the Board makes the following observations and findings:
a. 241 Deerhurst Drive has a larger site area by 10%, 23% greater height and 428 square feet smaller building area as compared to the Subject Property. The Board concludes that based on the larger site area and substantially higher building height this property is superior to the Subject Property. It is therefore likely that the selling price of the Subject Property would be less than the time-adjusted sale value of 241 Deerhurst Drive of $3,806,329.
b. 90 Hedgedale Road has a lot which is almost 14% larger than the Subject Property, with a building area 4,827 square feet smaller than the Subject Property. The Board finds that the substantially smaller building area results in this property being inferior to the Subject Property. It is therefore likely that the selling price of the Subject Property would be higher than the time-adjusted selling price of 90 Hedgedale Road of $2,725,010.
c. This leaves us 25 Devon Road which the Board believes is the best comparable property sale to the Subject Property. 25 Devon Road is 1.71 kilometers away from the Subject Property and therefore, in the same vicinity as the Subject Property, it has a 10% greater site area, 9% greater height and 225 square feet larger building area than the Subject Property. The Board therefore finds that 25 Devon Road is slightly superior to the Subject Property and that the likely selling price of the Subject Property would be within the range of 5% to 10% less than the time-adjusted selling price of 25 Devon Road of $3,390,326.
23The 5% to 10% lower likely sale range of the Subject Property in comparison to the time-adjusted sale value of 25 Devon Road is $3,051,293 on the low end to $3,220,809 on the high end. Based on this finding the Board concludes that the returned value of $3,090,000 is within the range of reasonable values in comparison to the sale value of 25 Devon Road which is the best comparable property to the Subject Property.
24The Board rejects MPAC’s approach to establishing the current value of the Subject Property. MPAC utilized the average time-adjusted sale value per square foot of $129.88 for the three comparable properties submitted into evidence. The Board has found that two of the three comparable properties are superior to the Subject Property resulting in the average square foot value for the three properties being higher than reasonable for the Subject Property therefore producing an inflated current value.
25The Board also analysed the comparable sales evidence submitted by the Appellant and concludes that in the absence of any representation on behalf of the Subject Property to clarify the discrepancies identified by MPAC and the Board in the data presented the Board will give no weight to the Appellant’s evidence in its determination of the correct current value of the Subject Property.
26Based on the best available evidence the Board finds the correct current value of the Subject Property to be the returned value of $3,090,000 for the 2017 to the 2022 taxation years.
Issue 2 – Whether an equity reduction in the current value should be made to compensate for the assessment of similar lands in the vicinity
27Section 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.”
Findings on Issue 2 - Equitable Reduction in Assessed Value
28Neither party has advanced any evidence is support of an equity argument and therefore, the Board will make no further downward adjustment to the correct current value to compensate for the assessment of similar lands in the vicinity.
29The Board requested MPAC disclose the returned assessed CVA values for the three comparable properties it submitted in support of current value. These values are $2,552,000 for 90 Hedgedale Road, $3,068,000 for 25 Devon Road and $3,359,000 for 241 Deerhurst Drive. It is clear from the range of values that the returned assessment value for the Subject Property of $3,090,000 is reasonable and falls within the CVA range of the three comparable properties submitted by MPAC in support of current value. This further supports that no downward adjustment is required to the correct current value to compensate for the assessments of similar properties in the vicinity.
CONCLUSION
30The Board finds that the correct current value of the Subject Property to be $3,090,000 for the 2017 through 2022 taxation years. Furthermore, the Board finds that no equity reduction is required under s. 44(3)(b) of the Act.
ORDER
31The Board orders that the current value assessment of the Subject Property be confirmed at $3,090,000 for the 2017, 2018, 2019, 2020, 2021 and 2022 taxation years.
“Anthony LaRegina”
ANTHONY LaREGINA MEMBER Assessment Review Board Website: www.tribunalsontario.ca/arb