Part 33 published on 01/02/11
Non-common element recreation centre assessed at nominal value of $1.00
This case dealt with the realty assessment and taxation of a recreation centre which was to be shared by five condominium corporations surrounding a golf course. [The golf course was separately owned by the developer.] The recreation centre was an asset of the condominium corporations and had been assessed at $1,460,000 for the 2005 taxation year and $1,740,000 for the 2006 and 2007 taxation years. The recreation centre contained an indoor salt water pool, whirlpool, sauna, games rooms, fitness room and party room for social activities, as well as an outside patio and tennis courts.
The Assessment Review Board (ARB) reduced the assessed value of the recreation centre to the nominal amount of $1.00, for the following reasons:
- Each of the unit owners had an easement over the recreation centre. In other words, each unit interest included the right to use the recreation centre. The ARB’s task, then, was to determine the “added value” of this right (included in the value of the residential units). Then, the assessed value of the recreation centre had to be reduced by the amount of that “added value”. [The idea was to avoid double taxation.]
- The ARB then found that the “added value” was the full value of the recreation centre.
In summary, the Assessment Review Board decided that the value of the recreation centre was already contained in the value of the residential units.
The ARB’s decision included the following:
Some evidence that the RC value is within the residential unit values is the simple fact that Schickedanz is transferring the RC to the five condominium corporations for zero consideration. Having no evidence that Schickedanz is a charitable corporation, the Board deduces only two possibilities. One is that the RC is being given away because it has no market value; or second that the RC has already been paid for through the sale of the residential units. Either one leads to the conclusion that the assessment of the RC should be zero.
[Editorial Note: There was no appeal. This decision is final.]