Multi-million-dollar Vancouver property owner may have used AI to argue for a lower tax assessment

The owner of a piece of Vancouver real estate that was assessed at over $19 million managed to knock nearly a million dollars off the amount used to calculate property taxes, but the Property Assessment Appeal Board of British Columbia says Fu D. Ren breached its code of conduct and may have used artificial intelligence to make his argument.

The code forbids submissions that are inaccurate, misleading, or manipulated, according to a recent decision from the board.

“The appellant’s submission includes quotations from legal case citations that do not exist,” John Bridal, the panel’s chair, wrote in a recent decision.

“It is possible that these may be ‘hallucinations’ from using generative artificial intelligence to assist with developing the appellant’s submission. If so, this might indicate a lack of care and attention to detail. A worse alternative is that the submission has been purposely falsified with knowledge and intent.”

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Ren argued his submission was presented in “good faith,” Bridal said, “but it is troubling that he did not take the opportunity to respond to these criticisms in a rebuttal submission.”

Whether the submission in question was “accidental from the poor use of artificial intelligence or a purposeful falsification,” didn’t make a difference to Bridal.

“I find in either case (Ren) has breached the board’s code of conduct,” he said, noting the same code “also requires any reliance on artificial intelligence to be disclosed, which was not done here. Finally, the appellant also violated the code’s duty to correct once he became aware of his inaccurate and misleading submission.”

In making his arguments for a lower assessment, Ren quoted three decisions from the board and B.C. Courts “that support a 20 per cent downward adjustment based on market resistance,” said the decision. “However, the assessor points out that none of the cited cases can be found on the (Canadian Legal Information Institute) or board websites.”

Ren calculated his property’s market value “by applying this 20 per cent discount to the salesperson’s suggested $12 million list price, to calculate a $9.6 million market value,” said the decision.

The AI matter came to light when Ren appealed the 2025 assessment of his 18,312-square-foot lot in Vancouver’s Mount Pleasant neighbourhood.

Ren argued the $19,082,000 assessment was “too high,” and he recommended it be reduced to the property’s “estimated $10,000,000 market value.”

The panel heard the building that used to be on the land “had a series of fires in 2023 and 2024. On Aug. 9, 2024, the city enforced a demolition order for the building. The demolition was complete on Nov. 20, 2024, with the underground parkade foundation the only remaining improvements.”

Ren has been billed “for this statutory enforced demolition,” but he hasn’t paid up yet, said the decision.

“The appellant provides five overdue invoices to the City of Vancouver totalling $2,030,287.14. These are not fully detailed, but they outline a combination of demolition costs and security and maintenance costs incurred between August 2024 and March 2025.”

Ren suggested that the $2 million cost “for demolition, clean-up, and maintenance and preservation should be deducted in calculating its market value.”

According to Ren, the market value of “‘disaster-affected land’ is properly valued as the bare land value less clean-up and demolition costs,” said the decision.

Ren “quotes from two B.C. Court decisions in support of this ‘Demolition and Restoration Method,’ where ‘disaster clean-up costs already incurred must be fully deducted from the assessed land value,’” it said.

“The assessor explains that these quoted cases also do not exist.”

Ren “has not presented a reasonable basis to support the subject’s market value,” Bridal said.

“The supporting case citations and references to appraisal standards are incorrect and possibly falsified.”

Bridal notes the board has the authority to award costs.

“If indeed the appellant has knowingly provided false cases and a misleading submission, I find this conduct would represent a breach of the board’s rules,” Bridal said.

“The unraveling of these falsehoods has required investigation and research by both the assessor and the board. I find an order for costs may be warranted, reflecting the additional time of both the board and the assessor in addressing this matter.”

Bridal ordered the property’s assessment drop to $18,144,000.

“Furthermore, regarding the apparent fabrications in the appellant’s submissions to the board, I also invite further submissions regarding the potential for ordering costs against the appellant in favour of the assessor, the board, or both, which I will decide in a subsequent decision,” he said.

Anyone who uses artificial intelligence to generate legal arguments should state it up front, and check to make sure that references to previous cases are accurate, according to Wayne MacKay, a professor emeritus at Dalhousie University’s Schulich School of Law.

“You can use it at your peril in the sense that you’re ultimately responsible for anything it says, both the content and its sourcing, and if you’re wrong about that, then, basically, you’re going to lose all credibility,” MacKay said Wednesday.

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