Decision and Order
IN THE MATTER OF AN APPEAL PURSUANT TO S. 50 OF THE ASSESSMENT ACT
CONCERNING:
Hilary Fiege
AND
Assessor Of Area #04 - Central Vancouver Island
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Appeal No.: |
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Refer to as: |
Fiege et al. v. Area 04 (2010 PAABBC 20100615) |
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Date of Decision: |
July 29, 2010 |
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Property: |
7323 Walton Road, Duncan Rural |
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Heard: |
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Submissions: |
From the Appellants received June 7, 2010 |
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From the Respondent received June 21, 2010 |
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Board Panel: |
Shiela Toth, Panel Chair |
INTRODUCTION
[1] The property under appeal (the Property) is a vacant 0.42 acre lot with 60 feet of lakefront on Lake Cowichan.
[2] The Appellant, Mr. Fiege contends the assessment is too high and does not reflect the market value. Specifically, he suggests the market value is negatively impacted because the lot cannot support any permanent improvements.
[3] The Respondent, Ms. Bujold, on behalf of the Assessor, submits the current assessment of $258,100 is representative of the market value for the property as of July 1, 2009.
Issue
[4] The issue is whether the assessed value reflects the actual value of the Property. For the 2010 roll, the actual value of the Property is the market value as of July 1, 2009 in its condition as of October 31, 2009.
PRELIMINARY MATTERS
[5] A rebuttal submission from the Appellant dated July 22, 2010 was received on 26 July 2010. In it the Appellant states reasons such as illness, hospitalization and information verification as explanation for the late submission. The Property Assessment Appeal Board Appeal Management Conference (AMC) Order specifies a closing date of June 30, 2010 for all submissions.
[6] I will not accept the late submission. The AMC Order is very clear on specific submission dates. I am prepared to give a few days grace due to unforeseen circumstances such as hospitalization, if agreed to by the other party, but not over 3 weeks past the submission date without a more detailed explanation. I am not prepared to give any grace on verification of information because this raises the issue of fairness to the other party.
[7 ] Finally, I find after a brief review of the content of the late submission that it would not substantially affect my decision making process or my final decision in this appeal.
Evidence and Submissions
[8] Mr. Fiege submits the Property can only be used for recreation purposes because it cannot be built on or support a septic system. He also states that the lot is flooded during the high water season and provides photographs illustrating the fact.
[9] Mr. Fiege includes excerpts from Bylaw 2934 and Bylaw 1490 to establish that development on the Property would be prohibited due to its annual flooding and inability to support a septic system.
[10] Ms. Bujold confirmed with the Cowichan Valley Regional District that these 2 bylaws are not applicable to the Property, but instead it is governed by the Official Community Plan and Zoning Bylaws for Electoral Area F. She states Area F has a Riparian Areas Regulation Development Permit Area which requires a report by a qualified environmental professional prior to any land filling or building construction. It also invokes a 30 meter setback from the Ministry of Environment defined high water mark of 164 meters.
[11] She also states the regional district building inspectors, using their discretion apply the provincial flood construction level of 167.33 meters. She concludes, under these bylaws, a small building envelope at the back of the Property may be possible.
[12] Mr. Fiege includes with his submission a letter from Sean Creally, a waste water practitioner with the Vancouver Island Health Authority. In it, Mr. Creally states that in his opinion, the Property would not be suitable for a sewerage system.
[13] Ms. Bujold also discussed the Property with Mr. Creally. He confirmed the opinion in his letter was restricted to Type 1 and Type 2 systems and that he is not qualified in Type 3 or mechanical sewerage systems. Mr. Creally conceded to Ms. Bujold that it may be possible to design a mechanical sewerage system for the Property.
[14] Mr. Fiege also provides a Flood Level Elevation map. Ms. Bujold adds the regional district description of the elevation lines on the map. She concludes part of the Property is below 164 meters and the balance is between 164 and 164.7 meters.
[15] Lastly Mr. Fiege includes his own sketch of the lot showing typical water levels.
[16] Mr. Fiege uses 7333 Walton Road as a comparable property. He states it is 5 feet higher in elevation, does not flood, and is assessed at $269,000. Ms. Bujold submits the assessment for this property is actually $369,000 (land at $242,000 and improvements at $127,000). She contends it has a similar elevation to the Property, that it is mostly below the 165 meter elevation level, but it has some fill remediation.
[17] Mr. Fiege states the Property has received a 10% adjustment to the assessed value because of no legal road access and an additional 25% because of the flooding issue. He calculates that without these adjustments, the Property would have an assessment at $397,500. He states this value is not reflective of the market value, based on lot prices at the Stin-Qua subdivision. He includes the list price of lots for sale in the Stin-Qua subdivision. The list price range $159,900 - $334,900.
[18] Ms. Bujold acknowledges the Stin-Qua properties are similar to the Property in relation to location only. She states they are bare-land strata lots built on reclaimed industrial land and bordered by industrial zoned lands. She also states the waterfront of these lots are encumbered by a restrictive covenant.
[19] Mr. Fiege summarizes that the assessed value of the Property is too high because the assessment increased 6.6% from the 2009 roll while the Lake Cowichan average assessment change from the 2009 to the 2010 roll was a negative 17%.
[20] Ms. Bujold submits 4 comparison property sales to establish a range of market value for the Property. The first at 11436 North Shore Road sold for $347,500 in August of 2009. It is also a 0.42 acre property with no legal road access or services, a smaller (50 foot) waterfront and improved with a recreational cabin.
[21] The other three property sales are fully serviced building lots in a new subdivision. They have 80 -87 foot waterfront widths and two of the three are over 0.5 of an acre. The sales occurred in June and July of 2009 for $467,250, $430,500 and $420,000.
[22] Ms. Bujold states these three lots represent the high end of the range of value for vacant lots on Lake Cowichan and that the 11436 North Shore Road property is the most similar to the Property. Ms. Bujold concludes the assessment of the Property is reasonable based on the range indicated by these sales.
Analysis
[23] Actual value for the Property is based on market value. Therefore, I give little weight to the assessment data from 7333 Walton Road and the percentage increase in assessment values because this data is not market based. The sales data before me from which a market value for the Property can be estimated includes the four property sales submitted by Ms. Bujold and the list prices of the lots for the Stin-Qua subdivision.
[24] The range represented by the list prices may give a general indication of value but they do not represent an actual sale or market value, only a proposed value. Also, the list prices need adjustments to be comparable to the Property for the facts that they are strata lots in an inferior (reclaimed industrial land) location with restrictive covenant on the waterfront. Evidence to support these adjustments is not provided, however. Therefore, I place little weight on these lots because they are unadjusted list prices.
[25] Three of the four property sales are vacant but superior lots because they have a longer waterfront and they are fully serviced with access and with an elevation suitable for building. A 10% adjustment for no road access and a 25% adjustment for the flooding issue is used by the Assessor and is not contested by the Appellant. This 35% adjustment on the three sale prices results in a range of $273,000 - $303,712. This range still represents a range superior to the Property because it has not been adjusted for the cost of services and the longer water frontages (80 feet plus compared to the Property at 60 feet).
[26] I have no evidence of a reasonable adjustment for the cost of services and differences in water frontage. I give the three superior property sales little weight because they have not been fully adjusted to become truly comparable to the Property.
[27] The remaining sale at 11436 North Shore Road has no legal road access and no services. It has a smaller water frontage (50 feet), however, it has superior improvements. It is improved with a smaller cabin assessed at $25,000. Although the market does not distinguish between land and improvement value, Ms. Bujold has suggested subtracting the assessed value for the cabin to establish a residual land value. Having no other contrary evidence, I accept Ms. Bujold`s suggestion as reasonable. The residual land value becomes $322,500.
[28] A further adjustment of 25% for the flooding issue, results in an adjusted sales price of $241,875 (rounded to $242,000).
[29] The adjusted value for 11436 North Shore Road should be upwardly adjusted because it has less water frontage than the Property. However, it has a small building site on it because it has an existing cabin. This would make it superior to the Property and cause a downward adjustment. There is no evidence as to the sewage system potential on this comparable site. I have insufficient evidence before me to make any specific adjustments for these items.
[30] I prefer the 11436 North Shore Road as the best indication of market value for the Property because the sale occurred close to the valuation date, it is the same size as the Property and it also has no services or road access.
[31] I acknowledge from the evidence that the Property has significant issues as to the possibility of further development. However, there is insufficient expert evidence to decide whether the Property can support any type of sewage system and if a building site is possible on it. The Assessor allows a 25% adjustment for the flooding issue but does not make any further adjustment for the cost to investigate and overcome the development issues on the Property. My preferred comparable has similar issues because it has no services, including the lack of a sewerage system but it has less flooding issues because it has a building site given the existing small cabin.
CONCLUSION
[32] I find the adjusted sale price of my preferred comparable sale is the best indication of the land value for the Property. I find $242,100 a reasonable estimate of market value for the Property as of July 1, 2009.
ORDER
[33] The Board orders the Assessor to amend the 2010 assessment roll as follows:
Roll No. 04-79-766-02478.060:
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FROM |
TO |
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Land: |
Class 1 - Residential |
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242,000 |
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Improvements: |
$ |
$ |
100 |
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Total Assessed Value: |
$ |
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242,100 |