Saskatchewan Municipal Board Assessment Appeals Committee RESPONDENT: Rural Municipality of Prince Albert No. 461 Appeal: 0310/2005 In the matter of an appeal to the Assessment Appeals Committee, Saskatchewan Municipal Board, by: Can-West Properties Ltd. c/o Grace Muzyka Brunsdon Junor Johnson Appraisals Ltd. #204 640 Broadway Avenue Saskatoon, Saskatchewan S7N 1A9 respecting the assessment of: for the year 2005; Parcel O, Plan CP5069 and Parcel G, Plan 76PA02639 Eastview and Driftwood Mobile Home Parks Alternate Numbers: 505013400 and 505011200 BEFORE: APPEARED FOR THE APPELLANT: APPEARED FOR THE RESPONDENT: APPEARED FOR THE SASKATCHEWAN ASSESSMENT MANAGEMENT AGENCY: Wade Armstrong, Chairman Robert L. Edwards, Member Jenny Lai Yu, Member Grace Muzyka, Harvey Agnew No one appeared Tim Amson This appeal was heard in Room 1.6, Main Floor, McIntosh Mall, 800 Central Avenue, in Prince Albert, Saskatchewan, on March 28, 2006.
APPEAL 0310/2005 [Page 2] This appeal is against the decision of the Saskatoon District Board of Revision (the Board) for the Rural Municipality of Prince Albert No. 461, pursuant to section 316 of The Rural Municipality Act, 1989 (the Act). ISSUE: Did the Board err in its decision by sustaining the land valuation for the year 2005? FACTS: (1) The subject properties are legally described as the Eastview Mobile Home Park, Parcel O, Plan CP5069, Alternate Number 505013400; and the Driftwood Mobile Home Park, Parcel G, Plan 76PA02639, Alternate Number 505011200. (2) The Eastview Mobile Home Park (Eastview) contains 34.03 acres with 104 dwelling sites. The most northerly 22 acres are developed with the mobile home park and the southerly 12.03 acres are undeveloped. This is zoned AR Agricultural Reserve. The Driftwood Mobile Home Park (Driftwood) contains 14.17 acres with 85 dwelling sites. This is zoned C.2 Highway Commercial District. (3) The developed land in both parks is valued at $49,000 per acre, subject to a land size multiplier (LSM) which is the rate for highway commercial land. The undeveloped 12.03 acres of land in the Eastview Park is valued at $2,000 per acre, subject to an LSM, which is the country residential rate. (4) The appealed values were as follows: Eastview (Parcel O) Land Fair Value $486,900 Land Assessed Value $340,830 Improvements $237,300 Improvements $166,110 Total Fair Value $724,200 Total Assessed Value $506,940 Driftwood (Parcel G) Land Fair Value $349,900 Land Assessed Value $244,930 Improvements $177,600 Improvements $124,320 Total Fair Value $527,500 Total Assessed Value $369,250
APPEAL 0310/2005 [Page 3] The Board decided to reduce the improvement values but did not change the land values as set out in the following: Eastview (Parcel O) Land Fair Value $486,900 Land Assessed Value $340,830 Improvements $227,400 Improvements $159,180 Total Fair Value $714,300 Total Assessed Value $500,010 Driftwood (Parcel G) Land Fair Value $349,900 Land Assessed Value $244,930 Improvements $174,100 Improvements $121,870 Total Fair Value $524,000 Total Assessed Value $366,800 As a multi-unit residential property, the assessed value equals 70% of the fair value. The applicable base date for all valuations in Saskatchewan is June 30, 2002. (5) The grounds of appeal to the Board were as follows: IMPROVEMENTS NOT CORRECT/LAND COMPARABLES NOT BEST AVAILABLE IMPROVEMENTS NOT AS BUILT/COMPARABLES BEST FOR OTHER PARCELS (6) The record of the Board includes: a) Notices of appeal dated June 29, 2005; b) An appeal submission prepared by Brunsdon Martin Appraisals on behalf of the owner; g) A separate assessment report for each property from the Saskatchewan Assessment Management Agency (SAMA) dated September 2, 2005 which includes property profile sheets and Appendices C to F; and, h) Decision of the Board dated October 31, 2005. (7) The decision of the Board reads: It is the Board s conclusion, that following the arguments of both the Respondent and the Appellant and other than the above-noted recommendations on the electrical and water rates, the Board is of the view that SAMA has applied all of the formulas, rules and
APPEAL 0310/2005 [Page 4] principles and concurs with SAMA s recommendations as noted in reports filed for both Parcel O and Parcel G. (8) In the grounds of appeal to the Committee, the appellant complained that the Board made no decision regarding the base land rate, but if the outcome to uphold the value was considered a decision, then the Board failed to give reasons for its decision. (9) The Committee received written arguments from the appellant prior to the hearing. (10) By way of an undertaking, the Committee on April 10, 2006, received a summary of the neighbourhoods and particulars about the land rates applied to each. The appellant acknowledged receipt of this information on April 24, 2006 and clarified her arguments related to a noted error in interpreting the above data. LEGISLATION: The Rural Municipality Act, 1989: 283(1) All land and improvements in a municipality are subject to assessment. 284(1) Land is to be assessed at its fair value as of the applicable base date exclusive of the value of any improvements. (1.1) Notwithstanding subsection (1), land may be assessed together with the improvements on it for the purpose of using a valuation technique or method of appraisal set out in the assessment manual that requires that land and improvements be assessed together. (1.2) If land and improvements are assessed together pursuant to subsection (1.1), the provisions of this section apply, with any necessary modification, to that assessment. (2) The dominant and controlling factor in the assessment of land is equity. (3) The value at which land is assessed is to bear a fair and just proportion to the value at which all similar lands are assessed: (a) in the municipality; and (b) in any school division situated wholly or partly in the municipality or in which the municipality is wholly or partly situated. (4) In determining the fair value of land, the assessor shall take into consideration and be guided by:
APPEAL 0310/2005 [Page 5] (a) the present use of the land and any other condition or circumstance affecting its value; and (b) any applicable formula, rule or principle set out in the assessment manual. (4.1) For the purposes of subsection (4), the assessor shall apply all the facts, conditions and circumstances required to be taken into account as if they had existed on the applicable base date. 285.1(1) In determining the value of land, improvements or land and improvements, none of the assessor, the board of revision or the appeal board shall use or take into consideration any valuation technique or method of appraisal based on income or benefits unless the formulas, rules and principles respecting that valuation technique or method of appraisal are set out in the assessment manual. (2) For the purposes of subsection (1), the assessor, the board of revision or the appeal board shall only use or take into consideration a valuation technique or method of appraisal based on income or benefits in the manner permitted by and set out in the assessment manual. 311 Notwithstanding that the value at which any specified land or improvement has been assessed appears to be more or less than its fair value, the amount of the assessment may not be varied on appeal if the value at which it is assessed bears a fair and just proportion to the value at which all similar lands and improvements are assessed: (a) in the municipality; and (b) in any school division situated wholly or partly in the municipality or in which the municipality is wholly or partly situated. 316 An assessor, any appellant to the board of revision or any other person aggrieved by a decision of the board of revision has a right of appeal to the appeal board in accordance with the procedures set out in sections 317 to 321 against a decision of a board of revision on an appeal and against the omission, neglect or refusal of that board to hear or decide an appeal to it. 322.1(1) The appeal board shall not allow new evidence to be called on an appeal except where it is satisfied that: (a) except by his or her failure to make a request pursuant to section 308.3, through no fault of the person seeking to call the new evidence, the written materials and transcript mentioned in section 317.2 are incomplete, unclear or do not exist; (b) the board of revision has omitted, neglected or refused to make a decision; or (c) the appellant has established that relevant information has come to the appellant s attention and that the information was not obtainable or discoverable by the appellant through the exercise of due diligence at the time of the board of revision hearing.
APPEAL 0310/2005 [Page 6] (2) Where the appeal board allows new evidence to be called pursuant to subsection (1), the appeal board may make use of any powers it possesses pursuant to The Municipal Board Act to seek and obtain further information. 322.2 On an appeal from a decision of the board of revision with respect to the assessment or classification of land or improvements, the appeal board may adjust, either up or down, the assessment of or change the classification of the land or improvements in order that: (a) errors in and omissions from the assessment roll may be corrected; and (b) an accurate, fair and equitable entry of assessment for the land or improvements may be placed on the assessment roll. THE SASKATCHEWAN ASSESSMENT MANUAL (the Manual): Volume 1, Chapter 1, Document Number 1.1.3, page 1 (Date: 03/11/14) Volume 1, Chapter 1, Document Number 1.1.3, page 2 (Date: 03/01/22) Volume 1, Chapter 2, Document Number 2.1.2, pages 1 to 3 (Date: 03/11/14) CONCLUSIONS AND REASONS: [1] The Committee has received an appeal against the decision of the Saskatoon District Board of Revision acting for the Rural Municipality of Prince Albert No. 461, and on the basis of the presentations of the appellant and respondent, must decide if the record shows that an error has occurred. The role of the Committee is not to redo the hearing, nor to substitute its view for that of the Board. Rather, the Committee is to review the evidence from that hearing and determine whether the Board came to the proper conclusion in rendering its decision. Should the Committee conclude that the Board did not come to the proper conclusion based upon the evidence before it, the Committee is then required to do what the Board ought to have done. The onus is upon the appellant to demonstrate to the Committee where the Board has erred. [2] The agent for the appellant argued that the decision of the Board was deficient. Either there was no decision regarding the land values, or the decision to uphold the roll values was not supported by reasons. In either case, the Board erred. The agent proceeded on the basis that the Board had decided to uphold the
APPEAL 0310/2005 [Page 7] value but had given no reasons and petitioned the Committee to do what the Board should have done. [3] The selection of the highway commercial land value for the two properties is in error on a number of counts. The use is multi-unit residential and not commercial, but the parks existence predates the bylaw, making them legally nonconforming. It appears that the commercial land value has been applied to reflect the C.2 zoned property initially and then carried to the AR zoned property on an equity basis. [4] Neither site should be considered highway commercial. The only access to the street, which is no longer a highway, is a 55 foot roadway into the Driftwood Park. Under the C.2 zoning, this frontage is not large enough for the land to be used commercially, should the present use change and redevelopment be contemplated. The Eastview Park is accessed from 48 th Street, which is a gravel road running perpendicular to the old highway. South and east of these parcels, the use is predominantly agricultural. There is industrial land to the north of the subject properties, but there is no access to this subdivision from the parks. [5] The sales used in the sales array are small properties fronting onto the present highway and are developed for commercial use. The parcel sizes of 34 and 14 acres are much larger than the base lot size derived from the sales in this neighbourhood. The size and use of the subjects is therefore not comparable to those lots used to establish the base land rate. [6] Given the present residential use, this land should have been rated as residential land with rates from the subject municipality of approximately $2,000 per acre (subject to an LSM). This is the neighbourhood designated as residential land parcels within ten miles of city limits. In the alternative, the mobile home park value from the rural municipality on the north limit of the city should be used for these parks located on the south limit of the city. The mobile home parks in the Rural
APPEAL 0310/2005 [Page 8] Municipality of Buckland No. 491 (Buckland) are assessed at $8,266 per acre (subject to an LSM). These are in the same school division as the subjects and therefore a similar base land rate is equitable. [7] In response to SAMA s argument that the present value is supported by the 1990 sale of the property for $850,000, the agent countered that this sale was secured with a number of other properties and the 1999 mortgage amount shown is for that aggregate. [8] SAMA s position is that the selection of this neighbourhood is the best fit. There are a number of sales available in the area and these parks fit in well with that population. The Manual does not say that mobile home parks should be valued from single property (non multi-unit) residential rates and no potential purchaser would use this land for a single residence or acreage. [9] The other residential neighbourhoods in the municipality are too far from the city and the sizes are dissimilar from the subjects. A comparative calculation submitted with the noted undertaking showed the subject properties valued prospectively by way of the other neighbourhood rates. One neighbourhood leads to a similar value, but when compared to the other seven, the assessed value of Parcel G is seven to 50 times that of the other possible valuations. [10] SAMA cautioned the Committee not to give much weight to the $49,000 base rate as the LSM adjusts these large parcels to effective land rates less than one half of that amount. [11] In comparison to the Buckland mobile home parks, SAMA had little detail available. However, it was known that the multi-family and commercial sales were all grouped into one neighbourhood. There was a sale of a mobile home park in that municipality, but that sale was not used in the analysis as it was already improved.
APPEAL 0310/2005 [Page 9] [12] The appellant is correct that an appeal should be answered in the decision. A person has the right to know on what basis the appeal has been measured. Likewise, upon further appeal, the second reviewing body is given some basis by which a decision can be measured. It is important to know what facts the Board found relevant and which law it applied. When such is known, the first tribunal is in a better position to have its decision upheld by the second tribunal. All appellate bodies, including the Supreme Court of Canada, have held to this rationale. [13] The failure to give reasons does not completely set aside the decision in all instances, but it leaves the appeal open to full review because the second tribunal has no other foundation on which to focus its proceedings. [14] SAMA s description of a best fit is not explained and this puts the appellant and the Committee in the same vacuum as a Board decision with no reasons. Until the criteria for a best fit valuation are explained, the defence can be given very little weight. The reliance on a 1990 sale of one of the subjects is of no assistance to the Committee as it is a sale from another market period with different sales influences than those experienced in the present cycle. The sale of the Buckland Park is of no assistance because it was not used in the analysis and is not applied to the affected property. Therefore, if a property s value is not measured by its own sale, it is unreasonable for that sale to influence another value. [15] The Committee has held in the past that it cannot be assumed that the land value from one present use can be applied to another use without some sales indicators. In Appeal 0088/2001, Pinto Structures Inc. (Pinto) and the Town of Bienfait the Committee found the following: The Committee sees that the main issue here is that the assessor has assumed that the commercial land should be of the same value as residential land and has therefore considered the entire town as a neighbourhood with one land rate.
APPEAL 0310/2005 [Page 10] In the Saskatchewan Assessment Manual (the Manual), Volume 1, Document Number 2.1.2, Page 1, the valuation of urban land is discussed as follows: The sales comparison method shall be used to determine the base land rate of residential land; commercial land; industrial land; transportation, communication and utilities land; recreational and cultural land; and institutional land, with the exceptions of primary industrial land and railway roadway. As the rest of the section unfolds, there are separate instructions for the valuation of each urban land category. At no place is the assessor directed to assume that the base land rate for one category of land is the same as another category of land. An exception is found when discussing the valuation procedures for Transportation, Communication and Utility Land in Document Number 2.3.6, Page 1, when the Manual says: With the exception of railway roadway and airport land, separate transportation, communication and utility land neighbourhoods may be difficult to distinguish from commercial or industrial neighbourhoods. Upon review of the record and the instructions in the Manual, the Committee determined that the assessor has not followed the Manual when it was assumed that one land value could be applied to all urban land without any sales indicators. [16] The wording of the current Manual is not unlike that of the earlier version. [17] In the current version of the Manual, Volume 1, Document Number 1.1.3, the discussion of present uses clearly sets out that multi-unit residential land used for a mobile home park is a residential use and not a commercial use. Residential Use (1000) A Residential Use property is land or improvements designed, used, or intended to be used, as a person's residence or dwelling, typically containing cooking, eating, living, sleeping, and sanitary facilities; such as: (a) single-family residences, multi-family residences, apartments, residential condominiums, mobile homes, summer cottages and seasonal dwellings, and dormitories or other group living accommodations; and
APPEAL 0310/2005 [Page 11] (b) ancillary improvements used or reasonably capable of being used in conjunction with a residential purpose; but does not include rented accommodations such as hotels and motels, other than the portion of the improvement used or reasonably capable of being used as a residence by the owner or occupant, under lease, licence, permit or contract. Commercial Use (3000) Commercial use property shall include land and improvements used or reasonably capable of being used for commercial purposes, such as: (a) (b) (c) (d) (e) (f) (g) (h) (i) general retail or wholesale services; banking and financial services; automotive services; office buildings; food and beverage services; rented accommodation services not used or reasonably capable of being used as a residence by the owner or occupant, under lease, licence, permit or contract; entertainment services; agri-business services; and other commercial services. [18] Therefore, it would be an easy decision to rate this land as residential and use the within a ten mile radius neighbourhood rate. However, the Committee finds the equity argument with the Buckland mobile home parks to be compelling. [19] It is true that neither this Committee nor the Courts have enforced equity between municipalities, but the test for equity within the school district has never been tested. It appears that the similar uses in municipalities, which fringe the city, should be treated alike, barring evidence to the contrary. [20] In Buckland, SAMA found no difference between commercial and residential lands, so in the neighbourhood in question there is only one land value and therefore the mobile home parks are included. This does not contradict the findings
APPEAL 0310/2005 [Page 12] in Pinto in Appeal 0088/2001, because like the subject appeal, in Pinto there were no sales for the present use and an assumption was made without considering a comparable neighbourhood of similar uses. In Buckland, there are no assumptions, but a finding that the same value carries from one use to the other. [21] In that way, the Committee finds that the mobile home park land value from the Rural Municipality of Buckland No. 491 to be the most comparable neighbourhood for the subject properties. The record shows that the particulars for the land value calculation are as follows: Base land rate: $8,266 Standard parcel: 2.48 acres LSM curve 175% [22] The Committee finds that the Board erred when it did not apply the above criteria to the developed portions of the two subject mobile home parks. The appeal is only against those portions valued at the $49,000 base land rate, so the undeveloped land in the Eastview Park will remain unchanged. [23] Therefore, the land value is indicated as follows: Eastview (Parcel O) Plot 1-22 acres * $8,266 * 0.195 LSM = $35,378 Plot 2 12.03 acres = $21,140 Total $ 56,518 Driftwood (Parcel G) Plot 1 14.17 acres * $8,266 * 0.271 LSM = $31,693 [24] The Committee appreciates that each computer system will have its own rounding rules, so the finding will set an upper limit for the values on the above basis, with some rounding to account for the internal calculation differences. SAMA will set the final value on its own calculations, but use the above parameters.
APPEAL 0310/2005 [Page 13] [25] The Committee notes that agent s choice to structure the appeal presentation on an error in the decision was prompted when the Chairman asked the agent to choose one issue or the other so the conduct of the hearing could be properly focused. If the Committee left the impression with the agent that one must be selected and the other ground abandoned, then the Committee erred in its instruction. A failure to decide and an error in a decision are two separate issues and there are limitations placed on the hearing proceeding that fit each situation. In this case, the agent should have been instructed to pick a primary position, carry that through, and then make the case for the second position as both were set out in the notice of appeal. However, the position focused on by the agent leads to a result, so even if the hearing had been conducted under proper instruction, the failure to decide issue would not have been considered because the matter was resolved in any case. DECISION: The appeal is sustained. For 2005, the land values shall be calculated as set out above and for Parcel O, the value shall be no more than $58,000 fair value, $40,600 assessed value and for Parcel G the land value shall be no more than $33,000 fair value, $23,100 assessed value. The filing fee will be refunded.
APPEAL 0310/2005 [Page 14] DATED AT REGINA, Saskatchewan this 8 th day of September, 2006. SASKATCHEWAN MUNICIPAL BOARD Assessment Appeals Committee I concur: Per: Wade Armstrong, Chairman Per: Cynthia J. Schwindt, Secretary Jenny Lai Yu, Member Robert L. Edwards, Member