Assessment Appeals Committee DETERMINATION OF AN APPEAL UNDER Section 16 of The Municipal Board Act and Section 246 of The Municipalities Act Appeal Number: AAC 2015-0115 Date and Location: February 23, 2016 Regina, SK Zoran Goncin - and - Rural Municipality of Edenwold No. 158 (as represented by the Saskatchewan Assessment Management Agency [SAMA]) Appellant Respondent APPEARED FOR: The Appellant: The Respondent: SAMA: Zoran Goncin No one appeared Vanessa Vaughan, Regional Manager Susanna Hadi, Appraiser HEARD BEFORE: Gordon Hubbard, Panel Chair Lee Fuller, Member Earl Warwick, Member
APPEAL AAC 2015-0115 Page 2 INTRODUCTION: [1] The 2015 assessment for the property under appeal is: Roll Number Legal Description Original Assessed Value 516001250 Lot 6 Block 2 Plan 101958699 Board s Assessed Value $1,030,000 $1,030,000 [2] The property is non-regulated and residential. The Assessor used the cost approach to value the property. The land is 4.89 acres in a country residential subdivision located south of Pilot Butte. The improvements consist of a 2012 one-storey dwelling of 4,566 square feet on a crawl space. There is a 1,766 square foot attached garage and an 864 square foot detached garage. [3] Mr. Goncin appealed to the Board of Revision (Board) on the basis that the assessment was incorrectly carried out (error in law), that the quality of the improvement on the land was not represented correctly in the assessment (error in fact), and that there was a reasonable doubt an error was made in the calculation of the assessment value. [4] The Board upheld the original assessed value. Mr. Goncin asks the Assessment Appeals Committee (Committee) to reduce the value arrived at in the original assessment. PRELIMINARY MATTERS: [5] Mr. Goncin attempted to introduce new evidence that was not before the Board. The new evidence was the description of a neighbourhood house. The Committee chose not to hear the new evidence as it was not before the Board and it could have been obtained prior to the Board s hearing. ISSUES: [6] a) Did the Board make an error of law when it upheld the property valuation? b) Did the Board make an error of fact when it upheld the property valuation? DECISION: [7] Subsection 256(1) of The Municipalities Act, SS 2005, c M-36.1 (the Act) defines the actions the Committee may take after hearing an appeal. The Committee finds the Board made neither an error of law nor an error of fact when it dismissed the appeal. The Committee confirms the Board s Decision.
APPEAL AAC 2015-0115 Page 3 Issue a): Did the Board make an error of law when it upheld the property valuation? POSITIONS OF THE PARTIES: [8] Zoran Goncin: a) Assessor is to follow the Canadian Uniform Standards of Professional Appraisal Practice (CUSPAP) and the Uniform Standards of Professional Appraisal Practice (USPAP) to determine property value. Not doing so is an error in law. b) A physical inspection of the interior of the improvement was not completed by the Assessor prior to initially determining property value. c) Not doing a proper inspection makes the appraisal questionable and it is more likely than not that a mistake has been made. [9] SAMA: a) Assessors are bound by the Act to use the Market Valuation Standard (MVS). A fundamental component of the MVS is Mass Appraisal [s. 193(e.1)(i), the Act]. CUSPAP and USPAP do not speak to the specifics of an inspection. SAMA contends that not only did the assessors follow Mass Appraisal principles, but the assessors also conducted inspections to a standard that meets CUSPAP and USPAP. b) The Assessor completed exterior inspections and used blueprints, permit applications and discussions with the property owner to arrive at assessed value. This is a normal practice and is proper based on the Committee decision in AAC 2013-0138. ANALYSIS: [10] The Act states that equity for non-regulated properties is achieved through the application of the MVS so that assessments are proportionate to the market value of similar properties as of the base date [s. 195(7), the Act]. [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].
APPEAL AAC 2015-0115 Page 4 [12] Further, the definition of Mass Appraisal [s. 193(e.2), the Act] means the process of preparing assessments for a group of properties as of the base date using standard appraisal methods, employing common data and allowing for statistical testing. Also, a non-regulated property assessment shall not be varied on appeal using single property appraisal techniques [s. 256(3), the Act]. This means not only may an assessor not use a single property appraisal technique to value property under a mass appraisal system, but the Board could not vary the assessment completed by the Assessor in the face of evidence regarding a single property appraisal technique. [13] Mr. Goncin contended that CUSPAP and USPAP are the law. In fact, CUSPAP and USPAP are not the law, but are merely guidelines to follow. In no way do they supersede actual law. This is reflected in the Board s decision in paragraph [24], where the Board found no error in law. [14] The cost approach used to value the subject property estimates the replacement cost of improvements less depreciation plus land value. The Assessor applied the same method to all properties in the Rural Municipality of Edenwold. The valuation of similar properties must meet the MVS and be treated the same because property assessment must be equitable [s. 195(5), the Act]. [15] In its decision, the Board completed its analysis of the appeal by addressing the concerns of Mr. Goncin as he outlined them and providing sufficient reasons for the decision. [16] The Committee can find no error with the reasoning and findings of the Board and confirms the Board s decision. Issue b): Did the Board make an error of fact when it upheld the property assessment? POSITIONS OF THE PARTIES: [17] Zoran Goncin: a) Was not convinced the Board understood the evidence before it and took umbrage with the notion that the size of an improvement is a factor in determining the quality rating of an improvement. b) Felt the Board had not correctly factored the lack of a basement, the fact the improvement is a single storey and the quality of the interior appointments in its decision. c) Felt the Board had not factored in that Mr. Goncin had built the improvement himself and the improvement was not generally of a quality as compared to improvements built by a contractor.
APPEAL AAC 2015-0115 Page 5 d) When the Assessor inspected the interior of the improvement, after the appeal to the Board was made, the Assessor may have simply confirmed their previous opinion rather than looking objectively at the matter as if fresh. This demonstrates Assessor bias. e) Felt the Board did not address the reasonable doubt argument. [18] SAMA: a) Indicated there are many factors that contribute to the quality rating of an improvement. These factors all contributed to the quality rating of AA +10: additional wall construction; many patio doors; wider hallways; mudroom and study were present; coffered ceiling; the square footage of the home; and, the angled construction of the home. These factors are not typical of lower quality, single family dwellings. b) With regard to a lack of basement, a basement is an additional item that would result in a higher assessment per square foot of the improvement. In summary, having a basement is an addition to the base assessment, not having a basement is not a detraction from the base assessment. Having a single storey results in a higher per square foot value as opposed to having the same square footage in a two-storey. It is cheaper to build up than out. c) With respect to quality as a result of Mr. Goncin building the improvement himself, the Assessor mentioned she was unable to tell from the quality of work that a contractor had not constructed and finished the improvement. The comment was a kind one, indicating the quality of the work Mr. Goncin had completed was not inferior to that of contractors, in the opinion of the Assessor. d) With regard to the point of bias, SAMA testified that in this case the interior inspection did not yield any factors missing when compared to the review of blueprints, permit applications and discussions with the homeowner. If anything, SAMA noted there were more fixtures that would have increased the value of the improvement compared to the initial assessment. SAMA also indicated, anecdotally, they have experience with secondary inspections yielding both higher and lower values, along with value confirmation, so do not believe their process lends itself to bias. e) With regard to the argument of reasonable doubt an error was made, the standard of review before the Board was restricted to the Appellant showing there was an error made, not that the Appellant believes an error may have been made. In the absence of other information, the presumption is the Assessor assessed the property correctly. Additional statistical information was not supplied by Mr. Goncin.
APPEAL AAC 2015-0115 Page 6 ANALYSIS: [19] Written reasons provide accountability, procedural fairness, and comply with subsection 210(5) of the Act. Written reasons promote transparency and show people how decision makers made their decisions (Baker v Canada (Minister of Citizenship and Immigration), [1999] 2 SCR 817 (CanLII 699) (SCC) at paras 38-40 and Northwestern Utilities Ltd. v City of Edmonton, [1979] 1 SCR 684 (CanLII 17) (SCC) at 706). [20] Mr. Goncin raised a number of potential errors, but did not provide evidence or proof of errors in a way to convince the Board that a mistake was made. In Estevan Coal Corp. v. Estevan (Rural Municipality No. 5), 2000 SKCA 82 (CanLII) at paragraph 31, it is stated that there is a presumption in favour of the assessment being correct. When an assessment is initially appealed, it makes sense to hold it prima facie correct and place the onus of showing error on the appellant. [21] Similarly, Mr. Goncin raised a number of potential errors, but did not provide evidence or proof to the Committee that the Board made an error. The Municipal Board Act, SS 1988-1989, c M-23.2, subsection 20(1) states, The Board has authority to hear and determine any question of fact or law as to matters within its jurisdiction. The Committee was not convinced by Mr. Goncin that the Board made an error in fact or in law. [22] In the Board s decision, it completed its analysis of the appeal by addressing the concerns of Mr. Goncin as he outlined them and providing sufficient reasons for the decision. Specifically, the Board believed the Respondent acted with due diligence with respect to communication with the Appellant to ensure the assessed value was correct. The Board also accepted that the Respondent used the correct calculations and classification with regard to the assessed value of the subject property. Finally, the Board determined that the Respondent used the correct application of Mass Appraisal and achieved equity for the properties in the neighbourhood. [23] The Committee can find no error with the Board s reasoning and findings based on the facts before it and confirms the Board s decision. The Committee can only overturn the decision of the Board if the Board made a clear error of fact or an incorrect application of the law. Mr. Goncin did not point out how the Board made a mistake. Rather, his case to the Committee consisted of allegations about the inadequacy of the assessment analysis, without adequate proof of a mistake.
APPEAL AAC 2015-0115 Page 7 CONCLUSION: [24] The Committee dismisses the appeal for issue a). The Committee dismisses the appeal for issue b). The Committee finds the Board made neither an error of law nor an error of fact when it dismissed the appeal. The Committee confirms the Board s decision. Dated at REGINA, Saskatchewan this 18 th day of April, 2016. Saskatchewan Municipal Board Assessment Appeals Committee Per: Gordon Hubbard, Panel Chair Per: Lise Gareau, Director