Presentation to the Saskatchewan Assessment Appraisers’ Association May 16, 2012

Appeals (2009 to 2011) Regina Decisions 2 Court of Appeal decisions 18 SMB Committee decisions (57 properties) Numerous issues and principles

Appeals (2009 to 2011) Onus Assessor Discretion Presumption of Correctness Information Requests from Owners Adjustments Shortfall Non-Recoverable Expenses Capitalization Rates Notice of Appeal Grounds of Appeal Record of Appeal Expert Witness Evidence Market Data Market Valuation Standard Market Value Handbook Typical v. Actual Mass Appraisal Methodology Authorities Appraisal Practices Units of Comparison Time-Adjusting Sales Weighting Industry Norms

Appeals (2009 to 2011) Onus Assessor Discretion Presumption of Correction Information Requests from Owners Adjustments Shortfall Non-Recoverable Expenses Capitalization Rates Notice of Appeal Grounds of Appeal Record of Appeal Expert Witness Evidence Market Data Market Valuation Standard Market Value Handbook Typical v. Actual Mass Appraisal Methodology Authorities Appraisal Practices Units of Comparison Time-Adjusting Sales Weighting Industry Norms

Appeals (2009 to 2011) Significant Points and Key Principles Market Value Assessment Handbook (31) Onus (23) Assessor Discretion (28) Typical v. Actual (9) Market Data (5)

Market Value Handbook The Canada Life Assurance Company v. Regina (City) (SMB ) [35] The Committee accepts that assessors are not required to follow the methodology in any of these publications for non-regulated properties. However, as SAMA has the mandate to provide the framework for the valuation of real property for property tax purposes, it is reasonable for the public, the reviewing tribunals and the courts to expect that the methodologies identified in the publications will be used as presented. Additionally, the Committee accepts that an assessor may move to other methods at any time, but acting in good faith as a professional with the responsibility of reporting his or her findings to the public, the reviewing tribunals and the court, the Committee expects that the assessor should disclose and be prepared to explain the basis and support for deviation whenever such a move is made.

Market Value Handbook The Canada Life Assurance Company v. Regina (City) (SMB ) [35] The Committee accepts that assessors are not required to follow the methodology …. However … it is reasonable … to expect that the methodologies … will be used as presented …. the Committee expects that the assessor should disclose and be prepared to explain the basis and support for deviation whenever such a move is made.

Market Value Handbook The Canada Life Assurance Company v. Regina (City) (SMB ) [46] The Committee notes the following guidance as provided in the Office Building Section of the Handbook as found at page 26: … In the Committee’s view this direction is clear …

Market Value Handbook Chainlink Enterprises Limited et al v. Regina (City) (SMB ) [24]… the previous Manual was silent on the use of …. This is not so for the current Handbook as the direction provided by it expressly provides for the use of … at page 15 of section 3.3 where it states...

Market Value Handbook Points to remember … Committee views Handbook similar to Manual Assessor must explain and support any deviation from direction in Handbook If no support … must use Handbook

Onus Saskatchewan Ltd. et al v. Regina (City) (SMB ) [ 15] It is up to the appellant to prove that the assessor had erred … not for the assessor to prove that he was correct.

Onus The Canada Life Assurance Company v. Regina (City) (SMB ) [ 52] The onus is on the appellant to draw all important documents to the Board’s attention and to establish relevancy of the documents to the issues at hand.

Onus PR Investments Inc. v. Moose Jaw (City) (SMB ) [ 23] … the Committee sees no evidence in the record that supports maintaining the assessor’s position on this issue. In light of the evidence before the Board, the Committee concludes that the appellant’s approach best reflects the guidance provided from within the Handbook …

Onus RM of Corman Park No. 344 v. Peter and Maureen Coad (SMB ) [20] The Committee notes that [the assessor] maintains a … property sales database in its computer. One would think that … it would take little effort to code … sites and abutting sites so a sales analysis could be completed to determine whether a property … has suffered a loss in value…. Completion of this type of sales analysis would assist all parties … to better understand the impact, if any … on property values.

Onus Points to remember … Onus still rests (initially) with Appellant Onus on Appellant to show relevancy of supporting documents Onus can shift to Assessor if error proven Onus on Assessor to do proper research and explain assessment

Assessor Discretion Acklands Limited v. Swift Current (City) (SMB ) [11] [ quoting Alberta Inc SKCA 136 ] The Court goes on to point out that an appellate body cannot “overturn an assessor’s discretion merely on the basis that the appellate body considers other factors more relevant, or other properties more comparable, than those determined by the Assessor.”

Assessor Discretion Manitou Springs Hotel Inc. v. Manitou Beach (Resort Village) (SMB ) [49] [ quoting Sasco Developments 2000 SKCA 90 ] “… It is not open to an assessor to interpret or apply one term of the manual … in a way that makes other terms of the manual unworkable, so as to avoid what he sees to be an undesirable result. That is an abuse of discretion, rather than a valid exercise of it.”

Assessor Discretion Manitou Springs Hotel Inc. v. Manitou Beach (Resort Village) (SMB ) [50] The discretionary powers afforded the assessor by the Court, is not absolute. The Court is clear in stating the assessed value resulting from the assessor in applying his discretion can not produce an undesirable result.

Assessor Discretion PR Investments Inc. v. Moose Jaw (City) (SMB ) [25] The Committee recognizes there is a presumption of correctness for the assessment as calculated. In the Committee’s view, however, deference can only be given where there are equally plausible positions.

Assessor Discretion Points to remember … Cannot overturn assessor discretion, even if other factors considered more relevant Assessor cannot use discretion to avoid an undesirable result Discretionary powers of assessor are not absolute Deference given only when there are equally plausible positions

Typical v. Actual Sasco Developments v. Moose Jaw (City) [2012 SKCA 24] [50] … it was not open to the [Assessor] to estimate the market value of the … property based in general on “its own income and expenses.” This would amount, in effect, to single property appraisal, using single property appraisal techniques.

Typical v. Actual Sasco Developments v. Moose Jaw (City) [2012 SKCA 24] [57] Let us be clear as about all of this. We are of the opinion it is not open to assessors in this province, employing the income method of appraisal adapted to mass appraisal, to use single property appraisal techniques that are incompatible with mass appraisal techniques…. Nor is it open to a board of revision to vary an assessment using such techniques.

Typical v. Actual Various c/o Altus Group Limited v. Regina (City) (SMB et al) [29] … the Committee questions whether the use of actual income and expense information being generated by a specific property to develop a capitalization rate which is then used to determine assessed values, would meet the criteria expressed for the “market valuation standard.” Specifically, it appears to the Committee that the requirement that the assessed value reflect the estate in fee simple has been disregarded with this calculation.

Typical v. Actual Points to remember … Cannot value a property using its own rents, income, expenses, etc. – amounts to single property appraisal Assessor cannot use single property appraisal techniques A Board of Revision cannot vary an assessment using single property appraisal techniques

Market Data Saskatchewan Ltd. et al v. Regina (City) (SMB ) [27] Any further adjustment must be supported by market derived data that is statistically significant and single point comparisons from a subset of the data do not present that significance.

Market Data The Canada Life Assurance Company v. Regina (City) (SMB ) [37] The Committee accepts the assessor’s calculation … on the basis that the evidence heard by the Board was that the calculation of this adjustment was based upon income and expense analysis completed by the assessor in conjunction with interviews and discussions with local property owners. The Committee agrees with the assessor that this is the most appropriate process to follow in order to establish and support an adjustment..

Market Data Points to remember … Adjustments must be supported by statistically significant market data Speaking with property owners substantiates an appropriate process to follow in supporting adjustments

Court of Appeal Court of Appeal decisions made prior to 2009 have been upheld in recent Court (and Committee) decisions Sasco [2012] decision referred to Laing [1995] and Estevan Coal [2000] decisions Direction provided by the Court prior to 2009 is still valid today Exercise caution in using decisions outside of Saskatchewan

Court of Appeal Sasco Developments v. Moose Jaw (City) [2012 SKCA 24] [56] Decisions from other jurisdictions can be helpful to a better understanding of things, but assessment schemes vary from province to province in one respect or another, making it imperative to pay close attention to the legislation underlying these decisions so as not to import ideas that are incompatible with the assessment scheme in place in this province.