Docket LT96007
Order LT97-01

IN THE MATTER of an appeal by Vaunda Richard against a decision of the Provincial Treasurer with respect to the 1995 assessment of Provincial Property Number 633602 located at Brooklyn, P.E.I.

BEFORE THE COMMISSION

on Thursday, the 20th day of February, 1997.

Linda Webber, Chair
Clayton Bulpitt, Commissioner
Anne McPhee, Commissioner

Order

Contents

1. Background

2. Evidence & Arguments

3. Decision

Order

Appearances & Witnesses

1. For The Appellant

Witness:
Vaunda Richard

2. For The Department

Witnesses:
Kevin Dingwell, Manager, Residential and Farm Properties
Paul Olscamp, Supervisor, Prince County

Reasons for Order

1. Background

This is an appeal under the Real Property Assessment Act, R.S.P.E.I. 1988, Cap. R-4, by Vaunda Richard (the Appellant) against a decision by the Provincial Treasurer (the Minister) with respect to the 1995 assessment of Provincial Property Number 633602 located at Brooklyn.

The subject property is located in the community of Brooklyn approximately 10 km south of Alberton, on the Ashley Road off Route # 12. The lot and house are accessible via a laneway leading from the Ashley Road, as well as an unpaved right-of-way. This right-of-way passes close by the Appellant's residence and is the only access to the sawmill operation in question. The property consists of approximately 1.9 acres and is improved with an 875 square foot (ground floor area) 1½ storey residence.

The assessment history of the property is as follows:
 

YEAR

ASSESSMENT
 

1993

$30,700
 

1994

$31,400
 

1995

$32,400
(REVISED)

1995

$24,800
(REVISED)

1995

$14,200

The Island Regulatory and Appeals Commission (the Commission) received a Notice of Appeal from the Appellant on May 28, 1996 in connection with the 1995 assessment of the subject property (Exhibit A1). The assessment value under appeal is $14,200.

The Commission heard the appeal on January 17, 1997 in Charlottetown.

At the hearing, the Commission requested that the Department provide further details on residential properties located adjacent to sawmill operations in specifically Prince County and other areas of the province. Subsequent to the hearing, the Commission received the Department's submission and forwarded a copy to the Appellant on February 5, 1997.

2. Evidence & Arguments

The Appellant

The principal arguments for the Appellant may be summarized as follows:

The Appellant takes the position that the subject property in its present location has no value as the dwelling is unfit for human habitation because of the noise, dust and smell generated by a sawmill operation located adjacent to the property.

The subject property was given to the Appellant by her mother in 1995 when the Appellant agreed to live in the dwelling and care for her mother who is legally blind and deaf. The Appellant moved into the dwelling on June 1, 1995 and occupied it with her mother until August 8, 1995. According to the Appellant, she and her mother vacated the premises on approximately August 8, 1995 because the Appellant could no longer tolerate the noise, dust and smell associated with the sawmill operation. The property has not been listed for sale.

The sawmill operation site is shown on page 3.1 of Exhibit D7. It is located on a portion of Provincial Property Number 803502 to the west of the subject property, a distance of approximately 200 feet. The Appellant believes that the mill operators lease the land from the property owner, who is a sister of the Appellant.

The sawmill operation as described by the Appellant, consists of: a post and rail mill; a traditional sawmill; and a firewood cutting operation. Traffic to the sawmill operation accesses the site by way of an unpaved right-of-way. The evidence of the ownership of the right-of-way was not totally clear but suggests that all who own part of the original farm property (Parcel #32482) have an interest in the right-of-way. As well, it was the Department's belief that the Appellant owned the right-of-way. The Appellant expressed some doubt about her legal status in this regard. As the Appellant's property fronts on this right-of-way, all traffic to and from the sawmill operation must pass in front of her dwelling.

During the time that she lived on the subject property, the Appellant was aware of truck traffic on the right-of-way during the day and night, as late as 11:00 p.m. and as early as 4:00 a.m. She states that during the time that she lived on property, the sawmill operated, at times, 7 days a week. The Appellant states that the smell from diesel-fueled trucks idling for half an hour or more while unloading and loading, and the smell from the peeling of cedar logs was overwhelming. The Appellant moved out of the dwelling in August 1995. She states that she does not know whether or not the mill operates on a year round basis.

In a letter to Kevin Dingwell dated July 10, 1996 (Exhibit D5), the Appellant provided the following information concerning the traffic nuisance generated from the sawmill operation:

For example, during the evening of July 1, 1996, a red dump truck was hauling firewood from the mill site using the right-of-way that passes the house (633602). There is no way a window or door in the house could have been opened or anyone could have stayed outside in the yard because of the dust not to mention the noise from loading these blocks into a dump truck.

In a letter to Kevin Dingwell dated July 10, 1996 (Exhibit D5), the Appellant argued that if a shore lot was assessed with a 50% location allowance,

….then the house must rate a much greater reduction because it is very close to the milling operations plus all traffic to and from must pass the house.

In conclusion, the Appellant requests that the revised 1995 assessment be reduced to zero because the dwelling in its present situation has no value.

The Minister

The principal arguments for the Minister may be summarized as follows:

In the submission to the Commission, identified as Exhibit D7, the Minister states that the revised 1995 assessment of $24,800 was implemented after a site inspection based on the original referral and that Standard Policy adjustments were applied. The 1995 Referral Disposition of Assessment (Exhibit D2) states that such decision was made for the following reasons:

Following an inspection of the property, it is recommended that the assessment be varied to reflect an additional allowance due to the property's location immediately adjacent to an operational sawmill.

The Department's policy concerning locational factors is contained in Section O, Instruction Number 20 of the Department's Policy and Assessment Manual:

In the case of residential properties, proximity (exposure) to Commercial or Industrial establishments, dilapidated properties, undesirable neighbours or any other circumstances reduce the value of the subject property. In all cases, the assessor must be satisfied that any such condition does, in fact, reduce the value of the property.

Any unusual condition found by the assessor in the field will be treated on its merits.

The Department states that in its review, the location of the subject property in relation to the mill was considered when it applied Standard Policy location factors of 10% for noise and 10% for dust, traffic and unsightliness (Exhibit B.1 in Exhibit D7).

The second revised assessment of $14,200 resulted from further discussions with the Appellant, and the application of a 50% allowance, consistent with that applied to the adjacent shore lots located to the west of the subject parcel which were part of the original farm property and mostly in the possession of relatives of the Appellant.

The Department contends that a 50% allowance is more than reasonable and in fact may overcompensate the Appellant. However, because a 50% allowance was applied to the shore lots, the Department agreed to extend the same to all aspects of the subject property.

During the hearing, the Department was asked why a 50% allowance had been applied to the shore lots. The Department representative states that the allowance was applied because it was a family subdivision, the lots most likely would not be on the local market, and the lots were located in close proximity to the sawmill operation. Mr. Olscamp states that he did not support the 50% allowance in the case of the shore lots and that in his view, the assessment of these lots should be reviewed. During the hearing, Mr. Olscamp stated:

…rightly or wrongly, it is there and that is why 50% is applied also to the subject property.

The Department contends that an allowance has been applied to both the land and building calculations to recognize the negative influence of the mill operation and to be consistent with that allowance given to neighbouring recreational lots.

The Department requests that the appeal be denied.

3. Decision

The Commission has given full consideration to the evidence submitted by both parties and has decided to vary the assessment. The reasons for this decision are as follows:

The thrust of the Appellant's appeal is that the sawmill operation next door makes her home unlivable. Therefore she expects the property to be assessed at zero — essentially valueless.

The Department applied its standard assessment approach to the value of the property and there has been no objection raised to the calculations made in that way. Nor has there been any objection to the depreciation applied to the property. The objections raised relate to the Department's application of the neighborhood location factor.

As described by the Department, the usual procedure — as set out in the Prince Edward Island Real Property Assessment Manual — is to apply a percentage in accordance with the guidelines in the manual. These percentages range from 5 to 10 percent. In a case such as this, the highest adjustment — 10% — would be used, and then an additional 10% — from applying another adjustment factor — would be added. The Commission was told that this is the normal procedure for residences adjacent to sawmill operations.

After the hearing, the Department supplied evidence of assessments of other residential properties adjacent to sawmill operations throughout the province. The information provided indicates that only one residential property adjacent to a sawmill operation received a 5% neighbourhood location factor.

This Commission has, in the past, made every effort to both understand and respect the processes set up by the Department to deal with real property appraisals on a large scale. The use of general guidelines and tables is accepted as a method of ensuring consistency in the application of adjustment factors. The Commission's only qualification has been that each case is unique and, as such, must have its unique characteristics considered on appeal.

In this case, there is also such a unique aspect. In particular, the Commission has evidence that the cottage lots located to the west of the sawmill operation have received a neighbourhood location factor of 50% because of their location adjacent to the sawmill. There are a number of cottage lots and apparently almost all have received this adjustment.

The Department suggests that this was done in error but the Commission is at this point in time faced with the adjustments as a matter of fact. Since the Act requires uniformity in assessments, the use of this adjustment in this area has to influence what can be considered a fair assessment in the Appellant's case.

In fact, the location of the Appellant's property is such that it will be negatively affected to a greater degree than any of the cottage lots. This was admitted by the Department representatives at the hearing. The trucks hauling lumber in and out of the sawmill operation drive in front of the Appellant's property but not in front of the cottage lots. Since the access road is unpaved, the dust is significant, as testified to by the Appellant. Therefore, if the cottage lots received a 50% adjustment, then the Appellant's property should receive an even greater adjustment of its assessed value.

At the same time, the Commission is of the view that the 20% adjustment suggested as the norm by the Department is unrealistic. In the first place, the schedule of the Real Property Assessment Manual used by the Department, strictly interpreted would limit any adjustment to 10%. That is the maximum allowed for the location of a residence immediately adjacent to any type of industrial site or commercial operation.

Common sense, as well as the Commission's experience with other assessment appeals, tells us that this adjustment factor is unrealistically low.

The effective date given for this schedule of the Manual is 1979. Perhaps in 1979 less concern was expressed by the public over the impact of an industrial plant adjacent to a residence. Today, however, the public is very averse to the encroachment of either commercial or industrial activity in a residential area and housing prices are directly affected by these activities in the vicinity of a residence. For example, to suggest that the operation of a service station, with the attendant environmental and fire risks as well as increased traffic and noise, would only justify a 10% adjustment to the purchase price of a home next door, is simply unacceptable.

The Appellant has testified to the presence of truck traffic to and from the mill seven days a week and as early as 4 a.m. and as late as 11 p.m. She also testifies that the dust is severe and requires the shutting of all windows when the trucks go by. Even the smell of the peeling of cedar logs is complained of because of its intensity. Whether or not these activities are greater or lesser than similar activities at other sawmill operations is not at present the issue. In the opinion of the Commission, the tables and the variables applied by the Department to recognize the impact of such activities on the value of residential property, are unrealistic and do not stand up to scrutiny. They will need to be revised before any reliance can be placed upon them.

The evidence supplied by the Department of its treatment of other properties adjacent to sawmills is not relevant at this time because of the cottage lot adjustments in the present case. However, should alterations be made to the cottage lot adjustments in the future, it would be appropriate to revisit the property that is the subject of this appeal to ensure that uniformity is maintained with the respect to the assessments in this area.

In these circumstances, the Commission finds that the adjustment of 50% allowed to the Appellant's property is insufficient because of the additional nuisance to which her property is subject. However, the Commission cannot agree that the property is valueless. An argument that the property is valueless might be made if the subject property was subject to excessive disturbances by the sawmill operation being in production 24 hours a day, 365 days a year. However, the Appellant has provided little evidence on the extent of the operation adjacent to the subject property, so there is no basis upon which the Commission could find an impact of this type alleged by the Appellant.

With the evidence now before the Commission, the Commission determines that the subject property should receive a neighborhood location factor of 20% more than the location factor applied to the nearby cottage lots, i.e. 70% in the present case.

As stated above, this decision is driven by the actions of the Department with respect to the nearby cottage lots. Should an overall reassessment of the properties in this area occur, there might be a reason to readjust the percentage applicable to the Appellant's property as well.

IN THE MATTER of an appeal by Vaunda Richard against a decision of the Provincial Treasurer with respect to the 1995 assessment of Provincial Property Number 633602 located at Brooklyn, P.E.I.

Order

WHEREAS the Appellant, Vaunda Richard has appealed the 1995 Assessment of Provincial Property Number 633602;

AND WHEREAS the Commission heard the appeal at a public hearing conducted in Charlottetown on January 17th, 1997 after due public notice;

AND WHEREAS the Commission has issued its findings in this matter in accordance with the Reasons for Order issued with this Order;

NOW THEREFORE, pursuant to the Island Regulatory and Appeals Commission Act and the Real Property Assessment Act,

IT IS ORDERED THAT

1. The assessment be varied and the subject property receive a neighbourhood location factor of 70%.

DATED at Charlottetown, Prince Edward Island, this 20th day of February, 1997.

BY THE COMMISSION:

Linda Webber, Chair

Clayton Bulpitt, Commissioner

Anne McPhee, Commissioner

NOTICE

Section 12 of the Island Regulatory and Appeals Commission Act reads as follows:

12. The Commission may, in its absolute discretion, review, rescind or vary any order or decision made by it or rehear any application before deciding it.

Parties to this proceeding seeking a review of the Commission's decision or order in this matter may do so by filing with the Commission, at the earliest date, a written Request for Review, which clearly states the reasons for the review and the nature of the relief sought.

Sections 33 and 34 of the Real Property Assessment Act provide as follows:

33. Notwithstanding anything in any public or private Act, an appeal lies to the Supreme Court of the province from any order, decision, or award of the Commission, if notice of the appeal is given the other parties within forty-five days after the making of the order, or decisions sought to be appealed from.

34. The rules and practices of the Supreme Court respecting appeals apply with the necessary changes to any appeal.