A Langley property owner got a stern warning from B.C.’s Property Assessment appeal board, after he tried to argue a case with fake citations made up by artificial intelligence software.
The assessment appeal concerned a five-acre site on Fraser Highway, which hosts a boat and RV storage, repair, and sales business. Because property taxes are based on assessed values, changing the value up or down can mean a significant change in an owner’s annual tax bill.
In 2025, the property’s official assessed value was $14.6 million, up from $12.5 million the year before. But BC Assessment, which issues valuations for all B.C. properties annually, said the actual market value was higher still, at more than $15.9 million.
The owners of the property – listed as two numbered B.C. companies – argued to the appeal board that the value was inflated by speculative buying in the area, since the site and its neighbours are within Langley Township’s Fraser Highway Employment Lands Area.
But before getting down to ruling on the actual or assessed value of the site, appeal panel chair Howard Mak had to rule on whether the property owner would face a financial penalty for using fake, AI-generated legal arguments.
According to Mak’s Nov. 19 ruling, the landowner’s original submission to the appeal board “includes references and summaries of legal cases that do not exist.”
On Oct. 2, the board asked for a copy of the cases being referenced, and the landowner sent a summary of another legal case “that was also unverifiable by the board.”
On Oct. 20, the owner confirmed that the summaries “were produced with the assistance of artificial intelligence” and admitted they don’t match up with any known B.C. court decisions.
“The applicant took full responsibility for the oversight and accordingly, withdrew both case references and the related summaries,” Mak wrote.
However, the panel threw out all arguments linked to the fake court citations, and then issued a warning to the landowner.
“The board cautions the appellant to ensure full compliance with the Code [of Conduct] should they appear before the board in future proceedings,” Mak wrote.
Using AI to prepare documents for the appeal board violates its written rules, and the board has the authority to penalize someone who does this by making them pay some of the costs of the legal process.
In this case, Mak and the appeal board found that an award of costs was not warranted, so the owner did not have to pay for their AI errors.
The use of generative artificial intelligence platforms has caused problems for legal cases in B.C. and around the world. Lawyers, judges, and people representing themselves have relied on AI to prepare legal documents and summarize previous rulings to support their arguments, only to find out that the cases they’re citing don’t exist, and were made up entirely by the AI software.
There is a well-known tendency for generative AI to make up convincing-sounding facts and even whole documents, in a phenomenon known as “hallucinating.”
Having dealt with the AI issue, Mak and the board found that the actual market value of the property was higher than its assessed value, but the assessed value will remain the same this year, and stays at $14.6 million for property tax purposes.