Tribunals Ontario

Tribunaux décisionnels Ontario

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE:

October 7, 2022

FILE NO.:

WR 181744

Assessed Person:

Runfree Aldershot Inc

Appellants:

Runfree Aldershot Inc; Arun Anand

Respondent:

Municipal Property Assessment Corporation Region 15

Respondent:

City of Burlington

Property Location:

1053 Waterdown Road

Municipality:

City of Burlington

Roll Number:

2402-010-106-14200-0000

Appeal Numbers:

3462671 and 3488653

Taxation Years:

2021 and 2022

Hearing Event No.:

775271

Legislative Authority:

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

APPEARANCES:

Parties

Representative

Runfree Aldershot Inc; Arun Anand

Ahmed Refai

Municipal Property Assessment Corporation

Terence Johnston

City of Burlington

No one appeared

HEARD:

September 29, 2022 by telephone conference call

ADJUDICATOR:

Jean-Paul Pilon, Member

DECISION

OVERVIEW

1Runfree Aldershot Inc and Arun Anand (the “Appellants”) are the owners of a property at 1053 Waterdown Road in the City of Burlington (the “Subject Property”), a detached single-family residence.

2The Appellants appealed their assessment for the 2021 taxation year on the basis the assessment 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”).

3The Municipal Property Assessment Corporation (“MPAC”) participated in these appeals but the Town of Burlington did not.

Background

4MPAC returned an assessment of the Subject Property of $535,000 in the residential property class. At the hearing, MPAC argued that the current value of the Subject Property is, in fact, $612,000 and that no adjustment in equity is required. The Appellants’ position was that the current value of the Subject Property is $421,000 after any adjustment in equity.

Issues for the Hearing

5The issues in this proceeding are:

1. The current value of the Subject Property; and

2. Whether an adjustment in equity is required and, if so, to what extent.

Result

6MPAC’s assessment of the Subject Property of $535,000 for the 2021 and 2022 taxation years in the residential property class is confirmed.

ANALYSIS

Description of Subject Property

7The Subject Property includes a 1.5 storey residential single-family dwelling of 1,570 square feet (“sq. ft.”) that was effectively built in 1962, a garage and land of 0.31 acres.

Issue 1 – Current Value

8The Board is first directed to “determine the current value of the land” pursuant to section 44(3)(a) of the Act.

Evidence

9MPAC used the direct comparison approach to arrive at its position of current value at the hearing.

10There was a sale of the Subject Property, which MPAC considered to have been at open-market sale, at a sale price of $673,250 on September 30, 2016 when the valuation date is January 1, 2016. Applying MPAC’s uncontested time adjustments, the sale price of the Subject Property was $612,860. MPAC’s position at the hearing was that this was the best indication of the current value of the Subject Property.

11MPAC relied on the sales prices of two other properties, 267 Plains Road West and 233 Townsend Avenue, to confirm its conclusion of current value. The former sold on April 1, 2015 with a time adjusted sale price of $604,573, and the latter sold on April 17, 2015 with a time adjusted sale price of $587,836. MPAC’s representative at the hearing testified that the median per sq. ft. value of each less any garage space was $390.20 which, when multiplied by the square footage of the Subject Property, also resulted in a value of $612,000 rounded.

12The Appellants’ representative Ahmed Refai testified as to two further sales of properties that the Appellants had purchased for comparison. The first was 1029 Waterdown Road, very close to the Subject Property, which he testified was purchased for an amount between $325,000 and $345,000 sometime in 2017. The second was 1057 Waterdown Road, which MPAC’s representative confirmed had been purchased on September 20, 2016 for $475,000 or, after applying MPAC’s time adjustment, $432,250. MPAC’s representative testified that he had not included this property in his analysis because its total building area was 957 sq. ft. when the Subject Property’s square footage was 1,570 sq. ft.

Analysis

13The Appellants’ representative argued that the sale price of the Subject Property was not indicative of its current value because the Appellants are builders that buy properties to facilitate development and essentially overpay. Section 1(1) of the Act defines “current value” 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.” Overpaying for a property does not necessarily mean that it is not an arm’s length sale. Nevertheless, the Board agrees that it is appropriate to look at other property sales as well as the sale of the Subject Property to ensure the correctness of its determination of current value.

14In addition, the Appellants’ representative argued that some of the properties used by MPAC in its analyses were not comparable because they were located in different neighbourhoods than the Subject Property. The properties in question were not identified, and the Board notes that all of the properties considered in the valuation analysis are within one kilometer (“km”) of the Subject Property. The properties used by MPAC in its equity analysis below are even closer to the Subject Property, within 0.7 km.

15The Appellants’ representative also correctly pointed out that MPAC’s representative had not inspected any of the properties that were used in MPAC’s analyses, arguing that MPAC’s data might be inaccurate. This was disclosed in MPAC’s valuation report where its representative noted he had not inspected the Subject Property, and that he relied on MPAC’s sales and property data on other properties for his analysis. However, none of MPAC’s evidence was refuted at the hearing.

16Returning to the Board’s valuation analysis, the building at 267 Plains Road West is substantially similar to the Subject Property but has more land than the Subject Property, 0.49 acres to the Subject Property’s 0.31 acres. For that reason, the Board considers it to be superior to the Subject Property.

17233 Townsend Avenue is relatively comparable to the Subject Property because it includes slightly less land (0.24 acres) but is also slightly older than the Subject Property, built in 1953.

18The Appellants’ property at 1057 Waterdown Road is inferior to the Subject Property because it has less floor space but is similar in other respects.

19MPAC’s representative was unable to find any reference in its records to a sale of 1029 Waterdown Road, and the evidence of the Appellants’ representative was vague as to its sale price and the date it transacted. For that reason, it is not considered in this analysis.

20With substantial differences in quantities of land and interior square footage in these properties, the Board finds the most logical approach in determining the current value is to calculate the mean or average adjusted sale price of all four comparable properties. The Board often uses median values in its calculations instead of means. However, with so few comparable properties available, use of a mean value is more appropriate in this instance because it is “the strongest and most reliable metric of central tendency in a data set” (Jay Patry Enterprises Inc. v Municipal Property Assessment Corporation, Region 05, 2019 CanLII 39629 (ON ARB), 2018 CanLII 70338 at para. 112). These adjusted sale prices are as follows:

a. the Subject Property at $612,860;

b. the relatively comparable property at 233 Townsend Avenue at $587,836;

c. the superior property at 267 Plains Road West at $604,573; and

d. The inferior property at 1057 Waterdown Road at $432,250.

21The mean of these four is $559,379 or $559,000 rounded which the Board finds is the current value of the Subject Property.

Finding on Issue 1

22The current value of the Subject Property is $559,000.

Issue 2 - Equity

23After determining the current value of the Subject Property, the Board is 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 that of similar lands in the vicinity if such an adjustment would result in a reduction of the assessment of the land” pursuant to section 44(3)(b) of the Act.

Evidence

24MPAC used time-adjusted sale prices of 30 detached single family-residential homes within 0.7 km of the Subject Property transacting in 2016 and 2017 against their assessments to arrive at assessment-to-sale ratios (“ASRs”) in its equity analysis. It determined a median ASR of 0.96 in this instance which would not warrant any adjustment to current value.

25The Appellants’ representative again made reference to 1057 Waterdown Road, which had an assessed value of $394,000, an adjusted purchase price of $432,250, and an ASR of 0.91. He also made reference to 1029 Waterdown Road but, as noted above, there were uncertainties as to the sale date and sale price.

Analysis

26It is again noted that the Appellants’ representative testified that some of MPAC’s properties are in different neighbourhoods than the Subject Property without describing which or in which parts of MPAC’s analyses these properties were referred to. The Act requires reference to similar lands in the vicinity, and the properties used by MPAC in its analysis were 0.7 km from the Subject Property and were similar in all other available points of comparison. The Board therefore accepts all 30 of MPAC’s properties in its equity analysis.

27The Board adds a 31st property to its analysis, 1057 Waterdown Road, with its ASR of 0.91. The result is that it does not change the overall median or mean ASR of 0.96.

28The Board finds that it would not be appropriate to essentially guess the ASR for 1029 Waterdown Road. MPAC’s representative testified that it had an assessed value of $333,000 but it was unclear when any sale in 2017 might have taken place and at what price. Moreover, that sale, which was contested, took place outside of the shoulder years to the valuation date unlike the 31 other properties used in the equity analysis.

29Sales are not always necessary to determine equity unlike in the direct comparison approach used to determine value. However, as the Board determined in its review decision Menard v Municipal Property Assessment Corporation, Region 28, 2021 CanLII 59499 at para. 29, 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.”

30There was a significant difference between the assessment of the Subject Property and the assessment of 1029 Waterdown Road at $333,000. However, the evidence before the Board is that the two properties are substantially dissimilar in both floor area, where it has 957 sq. ft and the Subject Property has 1,570 sq. ft., and 1029 Waterdown Road has a site area of 0.21 acres compared to the Subject Property’s 0.31 acres. The Board therefore finds they are not suitable for comparison in an equity analysis in the absence of any sale.

Finding on Issue 2

31No adjustment for equity is necessary.

CONCLUSION

32The Board finds that the current value of the Subject Property is $559,000 for the 2021 and 2022 taxation years.

33No reduction in the current value of the Subject Property is necessary to make it equitable with similar lands in the vicinity, and the Board finds that MPAC’s returned assessment is essentially correct.

34The Board therefore confirms the assessment of the Subject Property for the 2021 and 2022 taxation years.

ORDER

35The Board orders that the assessment of the Subject Property at 1053 Waterdown Road is confirmed at $535,000 in the residential property class for the 2021 and 2022 taxation years.