Docket LT98009
Order LT99-01IN THE MATTER of an appeal by Margaret C. MacKay against a decision by the Provincial Treasurer with respect to the 1998 assessment of Provincial Property Number 1501642-000, located in Linkletter, P.E.I.
BEFORE THE COMMISSION
on Friday, the 30th day of April, 1999.
Ginger Breedon
Arthur Hudson
James Carragher
Order
ContentsAppearances & Witnesses
Reasons for Order
1. Introduction
2. Background
3. DecisionOrder
Appearances & Witnesses
1. For The Appellant:
Margaret C. MacKay
2. For The Respondent:
Paul Olscamp for the Provincial Treasurer
Reasons for Order
1. Introduction
This is an appeal under Section 22(1) of the Real Property Assessment Act, R.S.P.E.I. 1988, Cap. R-4, (the Act), by Margaret C. MacKay (the Appellant) against a decision by the Provincial Treasurer (the Minister) with respect to the 1998 assessment of Provincial Property Number 1501642-000.
The subject property is a 1972 Bendix Leader mobile home measuring 12 feet x 48 feet for a total of 576 square feet of living area.
The assessment history for the past six years of the subject property is as follows:
1993 $11,100 1993 (revised) $7,800 1994 $7,800 1995 $7,800 1996 $7,800 1997 $7,800 1998 $8,200 1999 (revised) $7,000 The Appellant referred the original 1998 assessment of $8,200 on the subject property to the Provincial Tax Commissioner for review. The Provincial Tax Commissioner subsequently varied the original assessment to $7,000 (Exhibit D1). The Appellant then forwarded a Notice of Appeal dated October 29, 1998 (Exhibit A1) to the Island Regulatory and Appeals Commission (the Commission) seeking a change in the revised assessment.
In her Notice of Appeal, the Appellant indicates that she could not sell the mobile home for $5,000 and that a change of assessment value should be backdated.
Following the Commission's receipt of the Notice of Appeal, the two parties agreed to delay the hearing pending a possible resolution of the matter through further discussions between them. These discussions failed, in the end, to produce a satisfactory resolution.
The Commission heard the appeal on April 20, 1999 in Charlottetown.
2. Background
The Appellant
The Appellant's position may be summarized as follows:
Based on the Notice of Appeal and arguments presented during the hearing, the Appellant takes the position that the assessment of the subject property is more than the property is worth or more than it could be sold for. The Appellant believes that since there has been no work done on the mobile since 1976, and since there is considerable deterioration of the mobile home, the assessment value should be lowered. In support of this position, the Appellant presented a list of deficiencies and associated photographs (Exhibit A4) of the mobile home which provided a very detailed description of the subject property and the deterioration which has taken place.
In further support of her position that the mobile home is over assessed, the Appellant presented an appraisal of the subject property carried out by J. Ulric Gallant, Real Estate Appraiser (Exhibit A5). In his written appraisal of the subject property, Mr. Gallant notes that the mobile home's condition is estimated to be fair, and that it requires a great deal of work, such as replacing roof, windows, ceiling in bathroom and bedroom, flooring repairs etc. In addition, his appraisal notes that there have been very few repairs on the mobile over the past years and that the property has an estimated remaining economic life of 15 years. His report indicates that the market for the subject property in its present condition is not considered good. He concludes that based on his inspection of the property and an assessment of market sales of similar type properties, he determined the fair market value of the subject property as of April 2, 1999 to be $6,000.
The Appellant also indicates that she viewed the exterior of a number of the mobile homes listed in the "Comparable Mobile Home Assessments" table in Exhibit D1 and concluded that many of these mobile homes were not really comparable to hers. She further suggests that it appears to her that many of these units have had significant improvements carried out on them over the years. She also questions, notwithstanding these improvements, whether these units would sell for their 1998 assessment values.
In concluding, the Appellant requests that the Commission adjust the assessment of the subject property to more accurately reflect market conditions. More specifically, the Appellant requests the Commission to lower the assessment on the subject mobile home to $4,500 for the past two years and backdate the missing patio/deck, shown on the Department's assessment, to 1990 as she feels she has been paying for this all along.
The Respondent
The Respondent's position may be summarized as follows:
Paul Olscamp who represented the Respondent, the Provincial Treasurer, submits that the subject property has been assessed using a standard approach in accordance with the provisions of the Act and that the assessment is based on the concept of uniformity and market value. According to the Respondent's submission, identified as Exhibit D1, the 1998 assessment on the subject property was derived using the Cost Approach with market factor adjustments which provides a uniform level of assessment for all properties.
The Respondent indicates that mobile homes are classified according to their condition (i.e. when they were constructed, what building materials were used etc.) and their size. The subject mobile home falls into the category of 12 feet x 40-65 feet or use code 13 and is identified as a poor grade.
The Respondent presented an analysis of comparable properties to support that the subject property is not over assessed in comparison to other similar mobile homes (Exhibit D1, p.6). The Respondent also presented a list of comparable Real Estate Listings (Exhibit D3) and selected 13 mobile homes, which are similar in age to the subject mobile home to again show that the assessment on the subject property is at the bottom end of mobile homes of similar age. In doing this, the Respondent notes that this type of information is not used in establishing assessments for real property but can be instructive in establishing some sense of the overall market. He also agreed, in response to an observation of the Appellant, that nearly all the identified mobile homes in the Real Estate Listings (Exhibit D3) are not located in the Summerside Area.
The Respondent referred to the comparable sales booklet (Exhibit D2) which he suggests again shows that the assessment of the subject property is very much at the bottom end of actual sales results of similarly aged mobile homes.
The Respondent also outlined the process that had been used in arriving at the initial 1998 assessment on the subject property ($8,200) and the subsequent adjustment of this on referral to $7,000. He points out that the original assessment was based on the application of an adjustment multiplier which was applied to the assessment of all mobile homes in the Province. This multiplier is intended to reflect a general increase in the market value of all mobile homes.
The Respondent further explains that based on the Applicant's real property assessment referral requesting a review of the original 1998 assessment of the subject property, the property was reassessed with a resultant lowering of the assessment to $7,000. In providing more detail on the revision of the 1998 assessment, the Respondent notes that the mobile home has not had much renovation over the years except for the installation of a new furnace ten or so years ago and does show signs of deterioration and disrepair. As a result, the Respondent indicates that the 53% depreciation factor which was established, for the subject property in the original assessment was adjusted upward to 60%, and the associated assessment lowered to $7,000.
The Respondent also refers to the Depreciation Guidelines table (Exhibit D4) in the Real Property Assessment Manual used by the Provincial Treasury in establishing assessments. This table indicates that 26-year-old mobile homes have a base depreciation factor of something more than 63%. This figure is, in turn, adjusted depending on whether renovations have been carried out over the years. In the case of the subject property, the Respondent indicated that the installation of the new furnace 10 years ago would be expected to reduce this factor to the 60% depreciation range.
In concluding, the Respondent states that the subject property has been assessed in a uniform manner in relation to other assessments, that the subject property is not over assessed in comparison to similar aged, size and graded units and that the subject property is not over assessed in terms of what it could command on the open market given the proper exposure to potential purchasers.
3. Decision
The Commission has given full consideration to the evidence submitted by both parties and has decided to deny this appeal. The reasons for this decision are as follows:
The issues before the Commission are whether or not the assessment under appeal is uniform in relation to other assessments and whether the assessment is at market value.
The issue of uniformity has been canvassed before the Commission on a number of occasions. In previous decisions (Commission Order LT93-2 and LT96-03), the Commission found that a key feature of real property assessment is uniformity. That is, no matter what other principles are to be applied, if the end result cannot be said to assess the property in question in a uniform manner in relation to other assessments, then the assessment will be found to be invalid.
The importance of the principle of uniformity is evident in Section 28(1) of the Act.
Section 28. (1)
Subject to subsection (2), in any appeal to the Commission, the Minister shall demonstrate the uniformity of the assessment in relation to other assessments. (emphasis added)
This section of the Act places the onus upon the Minister to demonstrate that the assessment on appeal meets the test of uniformity.
The issue here, then, is whether or not the Minister has demonstrated the uniformity of the assessment in relation to other assessments, pursuant to the provisions of Section 28. (1).
The Respondent presented information and data on properties (Exhibit D1) to support the contention that the property was assessed in uniformity with other assessments. In doing so, he acknowledged that the Appellant's property is in a poor state of repair. He further noted that the depreciation factor has been adjusted accordingly resulting in the subject property receiving the lowest overall assessment and assessment per square foot among the comparable properties. The Respondent also submitted to the Commission and Appellant a copy of the Depreciation Guidelines table from the Real Property Assessment Manual (Exhibit D4) which provides a consistent and uniform starting point for the level of depreciation factor to be applied to different types of residential properties.
The Appellant's position on the issue of uniformity of assessment focuses on the condition of her property, and the contention that based on the comparable properties that the Respondent has identified, hers is in much worse condition. Her further contention is that the condition of her mobile home is so much poorer than the properties identified by the Respondent, that it is not possible to properly compare it with these properties.
In considering the evidence and arguments presented by both parties in this case, the Commission has given full consideration to the submission (Exhibit D1), including the comparables presented by the Respondent. In so doing, the Commission recognizes the poor condition of the Appellant's mobile home but believes this has been properly taken into account when compared with the information provided on units of similar age and size. That is, the Appellant's unit has received a high depreciation factor compared to these other units. The Commission is, therefore, satisfied that the Respondent has carried out the assessment in the manner established for that process and has demonstrated uniformity of assessment in this case.
On the issue of the reasonableness of the assessment of the Appellant's unit in terms of its market value, the Commission accepts the Appellant's position that the unit is in poor condition. The Respondent has also acknowledged this fact.
The Commission has reviewed the Comparable Sales Booklet (Exhibit D2) provided by the Respondent and has found that sales results for mobile homes of similar age, size and depreciation factor have been somewhat, to substantially higher than the revised assessment for the Appellant's unit. The Commission views these results as strong evidence that the assessment on the subject property is at or below market value.
The Commission has also taken into consideration the appraisal carried out on the Appellant's mobile home by Mr. Gallant. In so doing, the Commission recognizes that Mr. Gallant's report must be weighed carefully in view of the fact that he was not available at the hearing to answer questions from the Respondent and the Commission. However, while accepting this limitation, the Commission notes that Mr. Gallant estimated a remaining economic life for the mobile home of 15 years and provided an opinion that the market value of the unit as of April 2, 1999 is $6,000. While this figure is somewhat lower than the 1998 assessment of $7,000, the Commission believes it lends further support to the Respondent's position that their assessment of the subject unit is reasonably in line with its market value.
The Commission is aware that the process involved in assessing a residential property is not an exact science and, as such, different opinions can and do exist over what is an appropriate market value. In the case of the subject property, the Commission believes the revised 1998 assessment of $7,000 is reasonable in terms of a market value assessment.
In reaching this conclusion, the Commission notes that the revised assessment which is the subject of this appeal was completed in October 1998 and is, therefore, based on the condition of the property at that time. The Appellant presented testimony during the hearing relating to the condition of her mobile home as of April 1999. From that evidence, it may be possible that further deterioration of the mobile home has taken place over the winter season.
The Commission also notes that the Appellant indicated during the hearing that her ability to obtain and analyze information in the possession of the Provincial Treasury was hindered by the confidentiality of the information. She further indicated that this adversely affected her ability to present her case.
The Commission finds that Section 14 of the Real Property Assessment Act Regulations limits the communication of individual selling prices, obtained from affidavits, and other assessment information to selected parties which do not include the general public, including appellants. The Commission, as is the Respondent, is aware of this situation and understands the limitation it places on an appellant. The Commission is, however, required to apply the law as it now exists.
The Appellant also stated during the hearing that her appeal has cost her approximately $500 and considerable time in order to do it well. She requested that she be reimbursed for these costs from this hearing. The Commission does not have the legislative power to consider possible awards of costs.
For the reasons given above, the Commission finds that the Respondent has demonstrated uniformity of assessment in this case and that the revised 1998 assessment is reasonable on a market value basis. The appeal is therefore denied.
IN THE MATTER of an appeal by Margaret C. MacKay against a decision by the Provincial Treasurer with respect to the 1998 assessment of Provincial Property Number 1501642-000, located in Linkletter, P.E.I.
Order
WHEREAS
Margaret C. MacKay has appealed a decision by the Provincial Treasurer with respect to the 1998 assessment of Provincial Property Number 1501642-000, located in Linkletter, P.E.I.AND WHEREAS
the Commission heard the appeal at a public hearing conducted in Charlottetown on April 20, 1999;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 THAT1. The appeal is denied.
BY THE COMMISSION:
Ginger Breedon
Arthur Hudson
James Carragher
NOTICE
Section 12 of the Island Regulatory and Appeals Commission Act reads as follows:
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:
34. The rules and practices of the Supreme Court respecting appeals apply with the necessary changes to any appeal.