Joseph Michael Jaroszek and Dianne Elizabeth Millar v. Municipal Property Assessment Corporation Region 19 and City of Hamilton, 2023 CanLII 110302

Tribunals Ontario / Tribunaux décisionnels Ontario

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

ISSUE DATE: November 16, 2023

FILE NO.: WR 185442A

AMENDED DECISION ISSUED: July 10, 2024

Assessed Person(s): Joseph Michael Jaroszek; Dianne Elizabeth Millar

Appellant(s): Joseph Jaroszek; Dianne Millar

Respondent(s): Municipal Property Assessment Corporation Region 19

Respondent(s): City of Hamilton

Property Location(s): 40 Parkside Avenue

Municipality(ies): City of Hamilton

Roll Number(s): 2518-260-200-33000-0000

Appeal Number(s): 3508471, 3508470 and 3513388

Taxation Year(s): 2021, 2022 and 2023

Hearing Event No.: 781767

Legislative Authority: Sections 33 and 40 of the Assessment Act, R.S.O. 1990, c. A.31

APPEARANCES:

Parties	Representative
Joseph Michael Jaroszek; Dianne Elizabeth Millar	Self-represented
Municipal Property Assessment Corporation	Tim Oberle
City of Hamilton	No one appeared

HEARD: October 11, 2023 by telephone conference call

ADJUDICATOR(S): Dan Weagant, Member

AMENDED DECISION

AMENDED DECISION

In accordance with Rule 99 of the Assessment Review Board’s Rules of Practice and Procedure, effective April 1 2021, related to the correction of minor errors and in accordance with section 21.1 of the Statutory Powers and Procedure Act regarding the correction of errors, this Amended Decision is issued to correct error(s) in the Decision at paragraphs 2 and 11 to correct the land value of the property and at paragraph 43 to correct the resulting revisions to the total current value The amendments have been underlined for ease of reference. There are no other changes in this Amended Decision.

OVERVIEW

1The subject property located at 40 Parkside Avenue was improved in 2021 by a 2,675 square foot, single storey dwelling. The Municipal Property Assessment Corporation (“MPAC”) issued a Property Assessment Change Notice (“PACN”) for the added value in the amount of $642,000. This value was added to the assessment roll as an omitted assessment under s. 33 of the Assessment Act, R.S.O. 1990, c. A.31. (“Act”). The effective date of the omitted assessment was December 15, 2021. For the 2022 taxation year the effective date of the omitted assessment was January 1, 2022.

2Prior to the 2021 PACN, the land was assessed at $280,000. The omitted assessment increased the assessment of the subject property to $870,000 for 2023 taxation year.

3Joseph Michael Jaroszek and Dianne Elizabeth Millar, (the “Appellants”) appealed the omitted assessment for the 2021 taxation year and the 2022 taxation year. Subsequently, in accordance with s. 40 (26) of the Act, the 2022 appeal was deemed for the 2023 taxation year.

4The Appellants believed this value was too high and filed an appeal of the omitted assessment and the total assessment. The Appellants believe the correct total assessment should be in the range of $717,000 to $751,000.

Areas of Agreement

5There is no dispute between the parties regarding the effective date of the original s. 33 omitted assessment issued by MPAC. They agree the correct effective date is December 15, 2021.

Issues for the Hearing

6At issue in this proceeding is:

1. A determination of the current value of the subject property;

2. Whether an equity reduction in the current value should be made, when reference is made to the assessments of similar lands in the vicinity: and

3. A determination of the value of the omitted assessment applied to the subject property, effective December 15, 2021.

Result

7The Board finds that the current value of the subject property is $810,000.

8The Board also finds that, when the reference is made to the assessments of similar lands in the vicinity, the current value determined does not require a downward adjustment for it to represent equitable assessment.

ANALYSIS

Description of Subject Property

9The subject property is a 2,675 square foot single storey dwelling on a lot measuring approximately 0.64 acres. Access to the property is by right of way over one or more neighbouring properties, to the nearest public road. A portion of the property is characterized by a pronounced, wooded slope, upwards to the limit of an active railway.

10The sloped area of the subject property is in an open space zone and is not developable or usable except for its current use. The residential zone portion of the lot comprises approximately 0.28 acres.

Issue 1 – What is the current value of the subject property, as improved on December 15, 2021?

11The Appellants do not dispute that the value of the property increased in 2021. Their only issue is the amount of additional assessment that was added to by MPAC to reflect the improvements. The Appellants also accept that the value of the subject property was $280,000, prior to the increased assessment for the improvements in 2021.

MPAC’s Evidence

12MPAC compared the subject property to four other properties in Hamilton. All four were single storey dwellings on lots ranging in size from 1.01 acres to 1.49 acres. The dwellings themselves range in size from 1,566 square feet to 2,747 square feet.

13Each sale price was time adjusted so that they could be compared to the others in the sample, and the subject property, as though they all sold on the same valuation day of January 1, 2016. The time adjusted sale prices of MPAC’s four proposed comparable properties ranged from $733,595 to $1,111,026. Table A summarizes the attributes of MPAC’s four proposed comparable properties and the subject property.

Table A

	Subject Property	Comparable 1 6 Medwin Drive	Comparable 2 436 Old Brock Road	Comparable 3 3 Cedar Avenue	Comparable 4 21 Sun Avenue
Lot size (acres)	0.64	1.01	1.23	2.0	1.17
Variables	Abuts railway	Proximate to educational institute	Abuts gravel pit
Year Built	2021	2001	2010	1995	2003
Quality of Construction	7	7	7	7	7.5
Storeys	1	1	1	1	1
Living Area (Square Feet)	2,675	2,344	1,591	1,566	2,747
Finished Basement Area (Square Feet)	0	0	1,250	658	1,190
Attached Garage (Square Feet)	1,159	892	566	487	790

14Using this data, MPAC made individual adjustments to each differing point of comparison between the subject property and each of the proposed comparable properties.

15For example, the time adjusted sale price on Old Brock Road was adjusted to consider differences in lot location and proximity to the railway, the presence of an outdoor fireplace at the subject property, the access by right of way to the subject property, lot size differences and use limitations at the subject property. The net effect of these adjustments was an adjusted TAS price of $758,610.

16MPAC undertook the same approach to all four proposed comparable properties and arrived at adjusted sale values of $680,286, $758,610, $664,279, and $1,026,310 for MPAC Comparables 1 through 4, respectively.

17MPAC then determined the per square foot values of the four adjusted TAS values of $427.58, $323.64, $424.19 and $373.61 for MPAC Comparables 1 through 4 respectively.

18From this exercise, MPAC submits that the current value of the subject property should be between $865,737 and $1,143,779, arriving at an opinion of current value of $1,070,000. Having negotiated with the Appellants through the Request for Reconsideration process, MPAC recommended a current value of $870,000 at the hearing, indicating that this value was still within the range determined by its TAS adjustment process.

Appellants’ Evidence

19The Appellants’ case regarding the correct current value of the subject property focused on their perceived weaknesses and inaccuracies of MPAC’s evidence. First, the Appellants point out that the four properties cited by MPAC in its valuation study are in the community of Greensville, and not in the community of Dundas where the subject property lies. The Appellants submit the comparison between two separate communities within the City of Hamilton leads to inaccurate results.

20Secondly, the Appellants submitted that the Greensville lots were all larger than the subject property and were not encumbered by a pronounced slope like the subject property. The Appellants also believe there is no railway near MPAC’s proposed comparable properties, created another opportunity for inaccuracy in MPAC’s findings.

21The Appellants did not adduce any evidence of property sales that could be used for the purposes of determining a current value for the subject property.

Findings on Issue 1

22The 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.” The Board accepts that the best evidence of the current value of a subject property is the value of the sale of the property on or near the valuation day stipulated in the Act for the years under appeal. In this case the valuation day for 2021, 2022 and 2023 is January 1, 2016. There is no sale of the subject property in its present condition, on or near the valuation day.

23Where there is no sale of the subject property, the next best approach is to consider the sales of comparable properties, where reasonable adjustments can be made for the differences between a proposed comparable and the subject property.

24The Board has only the evidence of MPAC to consider in making a finding of current value based on comparable sales. As set out in the definition of current value, the main consideration is what the value of a property is, when sold. The Appellants focused their case on the comparisons of the assessment of the subject property to the assessments of other properties. This is a consideration of equitable assessment and that is addressed below.

MPAC’s Comparable Properties

25The Board disregards two of MPAC’s proposed properties, Comparables 2 and 3. Those dwellings are more than 1,000 square feet smaller than the subject property. By this measure the Board finds that they are not comparable. The Board also disregards MPACs Comparable 4. This property is clearly superior in every category of comparison advanced by MPAC in its analysis.

26The Board is left with MPAC’s proposed Comparable 1 at 6 Medwin Drive (“Medwin”). Medwin sold in 2016, with a time adjusted sale amount of $810,105. It is superior to the subject property in the following comparisons:

1. Lot size (1.01 acres vs. .64 acres at the subject property)

2. It does not abut a Railway.

3. It has 2.5 baths vs. 1.5 at the subject property.

27Medwin is inferior to the subject property in the following ways:

1. The dwelling is 20 years older.

2. The dwelling is 331 square feet smaller.

3. The attached garage is 267 square feet smaller.

28These differences balance to a point where the lot area and site conditions are superior to the subject property, while the built improvements are inferior to the subject property. There is no empirical evidence to make a mathematical adjustment for these differences between the subject property and the best comparable property in evidence.

29The Board finds that, on a balance of probabilities, the time adjusted sale price of Medwin is the best evidence of the subject property’s current value.

30The Board finds therefore that the correct current value of the subject property is $810,000.

Issue 2 – Does the current value determined require a downward adjustment for it to reflect equitable assessment when reference is made to the assessments of similar lands in the vicinity?

Appellants’ Evidence

31The Appellants referred to a document produced using MPAC data on 15 residential properties in Hamilton entitled ‘My Neighbourhood – My Favourites’.

32The document summarized the characteristics of those 15 properties in terms of size, age, number of storeys, quality of construction, number of bedrooms and basement characteristics. The Appellants submitted that from this list, three properties emerged as the most like the subject property. Those three properties are 40 Cammay, 17 Renata and 56 Brydale. Table B summarizes the comparative data used by the Appellants to determine the assessment of the subject property.

Table B

	Subject Property	40 Cammay	17 Renata	56 Brydale
Current Value Assessment	$870,000	$798,000	$649,000	$704,000
Lot Area (acres)	.64	.73	.23	.28
Year Built	2021	1997	1990	2003
Storeys	1	1	1	2
Building Area (square feet)	2,675	2,491	2,523	3,048
Finished Basement Area (square feet)	0	0	2,207	0
Quality of Construction	7	7	6.5	6.5
Neighbourhood	D04	D05	D05	D11

33At the hearing, the Appellants submitted the most similar of these properties is 40 Cammay (“Cammay”).

MPAC’s Evidence

34MPAC produced a list of 30 properties, where the assessments of those properties are compared to their respective TAS values. This is a common approach used to determine equitable assessment because it compares the assessments of a sample of properties to what they would have sold for on the legislated valuation day, or their respective current values.

35The resultant comparisons are referred to as the assessment to sale ratios (“ASRs”). MPAC submitted that when the median ASR of a sample of properties like the one it produced here is below 0.95, that indicates similar properties in the vicinity are generally assessed below their respective current values.

36MPAC’s median ASR is slightly above 0.95 in this case, and as a result it submits that no reduction for the purposes of achieving equitable assessment of the subject property in necessary.

Findings on Issue 2

37Downward adjustments in assessment require evidence that shows assessment in the vicinity of the subject property is below the value reflected by the current value. The Board has adopted many different approaches in determining whether a downward adjustment in the current value determined is necessary, depending on the evidence adduced at hearing. These approaches range from the assessment to time adjusted sale ratio, to comparisons with the assessments of individual properties that are deemed to be the most like the subject property.

38The question of the method of determining equitable assessment was clarified in Municipal Property Assessment Corporation v Loblaw Properties Limited, 2017 ONSC 1299, (“Loblaw’), where Justice Nordheimer wrote:

“In my view, the proper approach to be taken to determining what are “similar lands in the vicinity” is that set out by Saunders J. in Trizec, that is, that all points of comparison must be considered…”

39The Board has frequently held that ‘all points of comparison’ as included in Loblaw can be interpreted as all points of comparison in evidence. In this case, the Board disregards MPAC’s ASR study because it lacks the details necessary to use all points of comparison of the 30 properties used in its sample.

40By contrast the Appellants submitted a comparison of similarity in 40 Cammay that is very similar to the subject property. The Board also has MPAC’s Medwin property details that includes the same level of data to consider. It is considered by the Board to be the best indicator of current value because of its comparability and the same can be said of Medwin’s similarity to the subject property for the purposes of determining whether a reduction in the current value found above is necessary.

41Medwin’s assessment is $845,000. Cammay’s assessment is $798,000. The median assessment of these best two examples in evidence of similarity to the subject property is $821,500. The Board finds that this median assessment is the best indication of equitable assessment of the subject property. As this value is above the current value determined by the Board, no adjustment downward is justified.

CONCLUSION

42The Board finds that the current value of the subject property is $810,000. The Board also finds that there is no evidence to support a reduction in this value when reference is made to the assessments of similar lands in the vicinity.

ORDER

43The Board orders that the assessment of the subject property is amended as follows:

Appeal Number	Effective Date	Returned Value	Amended Value
3508471 (Omitted Assessment)	December 15, 2021	$642,000	$530,000
3508470 (Omitted Assessment)	January 1, 2022	$642,000	$530,000
3513388 (Annual Assessment)	January 1, 2023	$870,000	$810,000

"Dan Weagant"

DAN WEAGANT

MEMBER

Assessment Review Board

Website: www.tribunalsontario.ca/arb```