Assessment Appeals Committee

Transcription

1 Assessment Appeals Committee DETERMINATION OF APPEALS UNDER Section 16 of The Municipal Board Act and Section 246 of The Municipalities Act Appeal Numbers: AAC (Lead), , , , , , Date and Location: February 7, 2017 Regina, SK Rural Municipality of Corman Park No. 344 (as represented by the Saskatchewan Assessment Management Agency [SAMA]) - and - Various (as represented by Altus Group Limited [Altus]) Appellant Respondent SUBMISSIONS BY: (No one appeared for either party as per agreement between the parties.) The Appellant: The Respondent: Garry Coleman, Director Brandon Danielson, Assessor HEARD BEFORE: Lorna Cottenden, Panel Chair Holly McFarlane, Member Brandee Murdoch, Member

2 APPEALS AAC et al Page 2 INTRODUCTION: [1] The 2016 assessments for the property improvements under appeal are: AAC Appeal No. Board Appeal No. Assessment Roll No. Legal Description Original Assessed Value (Improvements) Board s Assessed Value (Improvements) W ½ SE W3 $3,243,800 $2,924, Lot B, Plan $746,500 $673, Parcel B, Plan $4,878,200 $4,398, Lot 1, Block 5, Plan 81S40061 Lot 2, Block 1, Plan 73S27744 Parcel A, Plan Parcel E, Plan $831,000 $1,402,000 $348,700 $882,900 $749,300 $1,264,100 $346,900 $796, Lot 5, Block 4, Plan $3,253,200 $2,933, PT SW W3 $19,500 $4,300 [2] The properties are non-regulated and classified as commercial. The Assessor used the cost approach to value the properties. [3] The Rural Municipality of Corman Park No. 344 s (RM) Board of Revision (Board) decreased the Market Adjustment Factor (MAF) leading to a decrease in original assessed values. SAMA asks the Committee to reinstate the original assessed values. ISSUES: [4] a) Did the Board make a mistake when it included two negative MAF sales in the sales pool? b) Did the Board make a mistake when it included two large warehouse sales in the sales pool? DECISION: [5] The Committee finds the Board did not make a mistake when it included two negative MAF sales in the sales pool. The Committee finds the Board did not make a mistake when it included two large warehouse sales in the sales pool.

3 APPEALS AAC et al Page 3 PRELIMINARY MATTERS: Hearing Format [6] The parties agreed to a hearing by written submissions. Improvements [7] The parties indicated this appeal is about the valuations of improvements only, not land. POSITIONS OF THE PARTIES: [8] SAMA: a) The Board made a mistake when it included two negative MAF sales in the sales pool because: SAMA s standard practice is to exclude negative MAF sales from the sales array if the negative MAF remains after investigating the circumstances of the sale and/or the sale is not typical of the population being valued. SAMA has been consistent in the way it treats negative MAF sales in the municipality, which has resulted in equity in assessments in the municipality. b) The Board made a mistake in allowing the appeal because Altus failed to provide evidence, which proved an error in the rationale or assessment practice of the Assessor. c) SAMA uses a standard practice of not including sales in more than one analysis. d) The Board did not consider relevant case law. [9] Altus: a) The Board did not make a mistake because the Board and the Committee already dealt with these issues and there was no new evidence before the Board. b) The Board did not make a mistake because the Assessor never reviewed the population of commercial properties in the RM to know what was typical. He only looked at the seven sales used to develop the MAF and the two large warehouse sales - all of which were in evidence in c) Altus disagrees with SAMA s contention that equity has been met because there are commercial properties with values placed on the 2016 roll that receive the 0.55 MAF with the two large warehouse sales and two negative MAF sales included.

4 APPEALS AAC et al Page 4 ANALYSIS: Property Valuation [10] The Municipalities Act, SS 2005, c M-36.1 [the Act] states the application of the Market Valuation Standard (MVS) achieves equity for non-regulated property assessments when assessments bear a fair and just proportion to the market value of similar properties as of the applicable base date [s. 195(7)]. [11] The application of the MVS occurs when the assessment: i. is prepared using mass appraisal; ii. is an estimate of the market value of the estate in fee simple in the property; iii. reflects typical market conditions for similar properties; and iv. meets quality assurance standards established by order of the agency [SAMA] [s. 193(e.1), the Act]. Issue a): Did the Board make a mistake when it included two negative MAF sales in the sales pool? [12] We agree with Altus that the Board and Committee have dealt with negative MAF sales for the 2015 assessment year. On June 2, 2016, the Committee issued decision AAC , which stated: SAMA s submission to the Board indicates the two negative MAF sales were excluded as the calculated MAF was negative. This occurs when the land value accounts for the majority of the sale price. Sales with negative calculated MAFs should not be used to determine a median MAF so are excluded from analysis (emphasis added). Just because a MAF sale is negative does not automatically mean it is not relevant. For example, a negative MAF sale can indicate that value has increased, so it is important to include it in order to properly study market conditions. Market conditions are important because they are a requirement of meeting the MVS. If the MVS is not met, then equity is not achieved and equity is the dominant and controlling factor in the assessment of property (s. 195(5), the Act). Data analysis requires the use of all relevant sales and the Board s decision reflects this (para 35). The Committee discussed negative MAFs in AAC et al. The Committee stated SAMA often excludes sales that indicate negative MAFs (para 5). The Committee further stated: Negative MAF sales should be reviewed and not removed only because they are negative (para 32) (emphasis added). We note that AAC et al was issued after the Board s hearing for the current appeal and it is currently under appeal to the

5 APPEALS AAC et al Page 5 Court of Appeal; however, the matter before the Court is not about negative MAFs. We find the Board did not make a mistake when it included two negative MAF sales in the sales pool (paras 12-15). [13] SAMA did not appeal AAC [14] We reviewed the evidence that was before the Board for this appeal and see nothing new compared to what was before the Board for the 2015 assessment year. Therefore, our decision is the same as it was for the 2015 assessment year. [15] We find the Board did not make a mistake when it included two negative MAF sales in the sales pool. Issue b): Did the Board make a mistake when it included two large warehouse sales in the sales pool? [16] We agree with Altus that the Board and Committee have dealt with large warehouse sales for the 2015 assessment year. On June 2, 2016, the Committee issued decision AAC , which stated: The Board agreed with Altus that two large warehouse sales were removed from the sales array but the Board did not view this as a mistake. SAMA believes the Board should not have used two of the four large warehouse sales in the MAF calculation for its decision. The Board believed it needed additional information in order to make a decision, so it asked for an undertaking and SAMA included information in the undertaking about large warehouse sales. SAMA told us this information was not before the Board at its hearing and appeared to question its relevance. Similar to when the Committee issues a Request for Information, the Board is free to use information received from an undertaking if it is relevant to the appeal for which it made the request. SAMA explained to us that two of the four large warehouse sales were used in the general commercial sales stratification for the province and cannot also be used for the RM. The Board s decision reflects this explanation: The Respondent indicated that the two large warehouse sales had been removed from the sales array because they were in use as part of a province-wide stratification for large warehouse properties. They suggest it would be an error to use the same property in two different stratifications used for different sales analysis (para 24).

6 APPEALS AAC et al Page 6 Altus disagreed with SAMA and told us there were examples of when the same property had been used in two different stratifications for different sales analyses, but Altus could not provide specifics to the Board. Our understanding of assessment practice is that an Assessor can use the general commercial sales stratification for the province for warehouses, but the Assessor should indicate why. Sometimes it is acceptable to apply the provincial large warehouse stratification and sometimes it is not. For example, one reason an Assessor might use the provincial stratification is that a subject property is unusual and data is required; however, without an explanation as to why, the Board or other parties cannot assess accuracy, fairness, or equity, which is required under the Act. The Board s decision shows its reasoning was all available data should be used for the purpose of analysis the Board sees no reason why these properties cannot be used to develop a provincial warehouse MAF while also not being used to develop an appropriate commercial MAF for the RM (paras 27, 37, 38) [paras 16-21]. [17] SAMA did not appeal AAC [18] Although the Board ruled in favour of Altus in 2016, some of the Board s reasoning was different than in The 2016 Board stated: The matter of one or more sales used in two different arrays was discussed in 2015 and is not a new argument. The Board specifically requested and received evidence through an undertaking from the Appellant following the 2015 appeals. This undertaking confirmed that, in 2015, this practice is in use and has been accepted by the Appraiser. The Board has further evidence that this practice continues to be used by the Appraiser in The Board fails to understand why, if this practice is incorrect, the Appraiser would continue to assess other properties in Saskatchewan in this manner over a period of two years The Board has considered the matter of one or more properties being used in two different sales arrays for the purpose of analysis. The Board agrees with both parties that this is not a recommended practice. The Appellant did not claim this was an acceptable practice. Rather, the Appellant established that the Appraiser is currently utilizing this practice and has proven this through the evidence provided (paras 12-17). [19] SAMA s position is that it does not use different sales arrays for the purpose of analysis. The Board s 2015 and 2016 decisions indicate Altus provided evidence that SAMA was using two different sales arrays as a result of an administrative decision at SAMA. We find it is reasonable the Board believed the evidence before it was inconsistent with SAMA s position.

7 APPEALS AAC et al Page 7 [20] The Board determines the admissibility, relevance and weight of any evidence [s. 233(1), the Act]. We will not interfere with the Board s findings because the evidence adequately supported its decision. [21] We find the Board did not make a mistake when it included two large warehouse sales in the sales pool. CONCLUSION: [22] SAMA has the onus, on a balance of probabilities, of showing the Board made an error of fact or law. We find that SAMA did not meet its onus. [23] The Committee dismisses the appeal for both issues. The Committee upholds the Board s property valuations as indicated in paragraph [1] of this decision. Dated at REGINA, Saskatchewan this 17 th day of April, Saskatchewan Municipal Board Assessment Appeals Committee Per: Lorna Cottenden, Panel Chair Per: Lise Gareau, Director