Decision and Order
IN THE MATTER OF AN APPEAL PURSUANT TO S. 50 OF THE ASSESSMENT ACT
CONCERNING:
AND
Assessor Of Area #04 - Central Vancouver Island
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Appeal No.: |
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Refer to as: |
Anderson v. Area 04 (2010 PAABBC 20100566) |
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Date of Decision: |
July 20, 2010 |
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Property: |
49-2785 Wallbank Road, Duncan Rural |
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Heard: |
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Submissions: |
From the Appellant received June 16 & June 30, 2010 |
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From the Respondent received June 17 & June 30, 2010 |
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Board Panel: |
Jack Hall, Panel Chair |
INTRODUCTION
[1] Mildred Anderson, the Appellant, owns a mobile home located within a mobile home park near Shawnigan Lake on southern Vancouver Island and is appealing the decision of the Property Assessment Review Panel (PARP) with respect to the 2010 assessment of her home. The Review panel established a value of $42,000 for the improvement, which is a reduction of $5,000 from the value initially established by BC Assessment. Ms. Anderson asserts that the value is too high. Larry Jorginson has co authored the Appellant’s submissions to the Property Assessment Appeal Board.
[2] Shandra McInnes and Julia Schlieman, Appraisers with the BC Assessment (the Assessor), submit that the value established by PARP should be confirmed.
ISSUES
[3] The Board must determine whether the property is assessed at market value and whether the assessment is equitable in relation to other similar properties. The valuation date for the 2010 assessment roll is July 1, 2009.
DESCRIPTION OF THE PROPERTY
[4] The subject property, constructed in 1969, is a 540 square foot manufactured home with a 212 square foot addition. The roof is in need of repair or replacement. The home is sited within a 70 unit manufactured home park (the park) on a no through street, and is across from a boat and recreational storage site for residents of the park. A utility shed for park users abuts the back yard of the property. The property also has its own small gardening shed.
EVIDENCE AND ANALYSIS
Actual Value
[5] Ms Anderson submits that her manufactured home is small, poorly located, has oil heat and a small back yard and is, therefore, worth less than units that are newer, larger, in better condition, have electric heat, and back onto greenbelts. She states that age, size, utilities, and condition are the primary factors that influence the value of manufactured homes.
[6] In her June 24th submission, Ms Anderson provides evidence about the financial circumstances surrounding her 2008 purchase of her home and submits that the price was inflated as a result. As the 2008 price does not appear to have been used as evidence for establishing the value on the valuation date, I do not place much weight on this evidence.
[7] In attachments to her submission, Ms Anderson provides the assessments of 9 other homes within the same park and includes photographs of them. Based on sizes established by visual, actual, or owner supplied information, she has calculated prices per square foot ranging from $49 to $61, ( excluding the highest value for unit #48) to arrive at an average value of $54 per square foot. Applying this to her home, she submits that the value should be 600 square feet x $54 which equals $32,400. This does not appear to include a value for the addition.
[8] To determine values using a market comparison approach, the properties selected should be as similar as possible to the subject, and adjustments should then be applied to reflect specific differences. The evidence provided by Ms. Anderson relies only on estimates of size and comparisons based on exterior photographs. It is not clear why the 8 properties were selected. I find that this is not sufficient to enable me to reach a reliable conclusion of value and I, therefore, give it little weight.
[9] Ms. Anderson provides a MLS sales summary from the Vancouver Island Real Estate Board that shows the average sale price for single family residences in the Cowichan Valley zone, decreased 15% between July 2008 and July 2009. As her assessment has increased, she submits this as further evidence that it is excessive. Her calculation of the rental increase is based on the value prior to the reduction established by PARP.
[10] While the evidence shows the general market trend in a specific geographic area and may be a helpful indication of value in the absence of any recent sales, it does not reflect circumstances that may be unique to a specific property and is not, therefore, generally a reliable way to establish values. I, therefore, give it little weight.
[11] The Assessor has provided a narrative appraisal using the direct market comparison approach to establish market value. This is the generally accepted approach for residential properties.
[12] The appraisal lists four comparable properties located within the same park as the subject. Adjustments have been made to reflect differences in building type, age, interior and exterior quality, overall size and living area, and the size and nature of additions. No time adjustments have been applied, although all sales occurred within 3 months of the valuation date. Adjustments are subjective rather that specific percentages based on market evidence, and are, therefore, more useful in establishing a value range as opposed to a specific value.
[13] None of the comparables listed are the same as those used for the property assessment comparisons provided by Ms Anderson to support her suggested value of $34,400.
[14] The most similar comparables are sales number 1 and 2, units #31 and #12. They sold respectively in July and March, 2009 for $37,500, and $28,900. The Assessor describes unit #31 as having an inferior external quality to the subject, a superior enclosed porch, and a similar total living area. The actual manufactured home without the addition is 80 square feet less. All other features are described as similar. In examining the photos, the difference in exterior quality does not appear to be significant.
[15] Unit #12 is described as having an inferior exterior quality, an inferior addition (porch not enclosed), smaller total living area, no shed and the actual manufactured home is 132 square feet larger without the addition.
[16] Sales comparables 3 and 4, units # 28 and # 41, sold respectively for $76,000 and $70,500. The Assessor describes them as superior in several features and gives them less weight than the other comparables. They are described as similar in some features and are used primarily to establish an upper value of a range.
[17] The Assessor states that “on balance, sales 1 and 2 were considered the most comparable, yet slightly inferior to the subject, primarily due to the exterior finish “. I accept this conclusion. I further conclude that sales 3 and 4 are superior in several areas and, therefore, establish an upper value for the range that is high. At the least, it would appear reasonable to establish the value of $28,900, sales comparable 2, as the lower end of the range, rather than sale 1 at $37,500.
[18] A range of value from $28,900 to $70,000 for a 40 year old manufactured home seems large, and determining a value within this range seems somewhat arbitrary. I prefer, therefore, to base a value on the most similar comparables. In this instance, sale number 1 has the most similar features to the subject and I find, therefore, that a value of $38,000 (rounded) is the appropriate actual value.
Equity
[19] The evidence on equity provided by Ms Anderson is included as the same evidence provided to support a reduced value. All of the 9 assessments for homes of similar or larger size than the subject, are assessed at higher values than her property,
[20] Similarly, the Assessor has provided evidence that the assessment of the subject at $42,000 is one of the 4 lowest assessments within the 70 unit park.
[21] As properties are to be assessed at the lower of either market value or an equitable value compared to the assessment of similar properties, it is clear that there is no evidence to support reducing the value further, based on an argument of equity.
CONCLUSION
[22] Ms Anderson submits that the value for her manufactured home should be between $30,800, and $34,000, based on square foot values determined from assessments of 8 other homes within the same park. For reasons outlined above, I have placed little weight on this evidence. Rather, I have relied on sales comparables provided by the Assessor, and in particular a sale of the most similar property to the subject in determining an actual value of $38,000.
[23] I have concluded that as the value of $38,000 falls within the 4 lowest valued properties in the park, there is no justification for adjusting the value further based on equity.
ORDER
[24] The Board orders the Assessor to amend the 2010 assessment roll as follows:
Roll No. 04-79-765-70351.490:
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FROM |
TO |
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Improvements: |
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38,000 |
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Total Assessed Value: |
$ |
$ |
38,000 |