Decision and Order
IN THE MATTER OF AN APPEAL PURSUANT TO S. 50 OF THE ASSESSMENT ACT
CONCERNING:
AND
Assessor Of Area #09 - Vancouver Sea To Sky Region
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Appeal No.: |
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Refer to as: |
Li v. Area 09 (2010 PAABBC 20100569) |
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Date of Decision: |
August 10, 2010 |
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Property: |
1170 Semlin Drive, City of Vancouver |
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Heard: |
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Submissions: |
From the Appellant received June 23, 2010 |
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From the Respondent received June 24 & July 22, 2010 |
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Board Panel: |
John Collins, Panel Chair |
INTRODUCTION AND ISSUE
[1] The property that is the subject of this appeal is comprised of two 25 ft. x 108 ft lots located on Semlin Drive in the Grandview area of Vancouver. The lots have road frontage at each end. There is a 2 ½ story house with a total floor area of 3,265 square feet on a 1,148 square foot basement. The house is in fair to average condition. It was built in 1912 and has been converted to four legal rental units and one unapproved rental unit.
[2] The issue is to determine whether the assessed value of $1,057,000 reflects the market value of the property as of July 1, 2009.
EVIDENCE AND ANALYSIS
[3] Ms. Li provides a written submission that includes a copy of the listing of the subject property commencing May 5, 2009 and expiring July 5, 2009 and a copy of the Contract of Purchase and Sale with three addenda, dated May 13 through 15, 2009. The agreed sale price for the property was $960,000.
[4] Ms. Li states in her submission that: “the property was listed on the MLS; there were multiple offers and it was a bona fide arm’s length’s (sic) sale; therefore, the sale price represents the best evidence of the fair market value.”
[5] BC Assessment provides a written submission authored by Frank Zhang. Mr Zhang concludes that the highest and best use of the property is as two vacant 25 foot x 108 foot residential lots. He gives a nominal value to the house to recognize the fact that it provides some income until a decision is made to tear down the existing structure and build two new dwellings.
[6] Mr. Zhang advises that the sale of the subject property was a court ordered sale, as the former owners had declared bankruptcy and assigned the property to a trustee. The listing agreement included the statement: “PRICED RIGHT FOR QUICK SALE BY THE TRUSTEE”. Mr. Zhang contends that the fact that the property sold in ten days suggests there was a degree of duress involved in the sale. He notes that the listing agreement does not state there are two legal 25 ft. lots. Instead it describes the property as a 50 ft. x 108 ft. lot. As a result, he contends the property did not get adequate market exposure. He says that a reasonable exposure time in the market to achieve a fair price would have been 30 – 90 days.
[7] Mr. Zhang also adjusts the selling price of the property for market movement between the May 2009 sale date and the July 1, 2009 valuation date. Using a +5% time adjustment, the selling price is adjusted to $1,010,000 which yields a 104.65% assessment to sale ratio. Mr. Zhang says that this is within reasonable tolerances but chooses to give this sale little weight in his analysis.
[8] Mr. Zhang provides evidence of three sales of properties that are similar in size to the subject and located in the Grandview area of Vancouver. They are 25 ft. x 100 ft, 24.4 ft. x 122 ft. and 24.3 ft. x 122.1 ft., respectively. Each has an existing residence.
[9] Sale #1 occurred in August 2009 and Mr. Zhang adjusts it for time as he says the market was rising from July 1, 2009. The other two sales occurred in June and July of 2009 and require no adjustment for time. After adjusting the selling prices for size, lack of lane access in sale #1 and existing site preparation in Sales 2 and 3, Mr Zhang subtracts the improvement values to derive land values that range from $518,000 to $528,000 for each of the two lots. He concludes a value of $525,000 per lot and adds $10,000 for the improvements for a total of $1,060,000.
[10] Mr. Zhang also addresses the issue of equity in an addendum to his appraisal brief. He advises that the assessment to sales ratio in the Grandview area is 97% and the coefficient of dispersion is 6.4%. He says these figures are well within the limits set in international standards.
[11] He concludes from his evidence that the assessed value for the property of $1,057,000 is a fair, as well as equitable, result.
[12] Ms. Li’s evidence is limited to the fact that she paid $960,000 for the property. The sale was court ordered and the property was listed at a price that would, and did, yield a quick sale. I agree with Mr Zhang’s position that, in these circumstances, the court ordered sale is not the best evidence of market value.
[13] I accept Mr. Zhang’s evidence of sales of properties similar to the subject and conclude that the assessed value of the property reflects its market value as of July 1, 2009.
ORDER
[14] The Board confirms the decision of the 2010 Property Assessment Review Panel as follows:
Roll No. 09-39-200-014-255-604-70-0000:
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Land: |
$ |
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Improvements: |
$ |
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Total Assessed Value: |
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$ |