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More On Crown Liens
Chapter: LIENS
Forrouk
Lets say you found out a property you were looking at had a crown lien on it. You bid low taking the lein into consideration. You won the tender and went ahead and purchased the property and then discharged the lien. Is there any way to go after the original owner and put your own lien on his boat car or other property?
He would get some money from the tax sale if the bid was over the minimum? I know its probably a lost cause in most cases but has anyone heard of this situation.
Frank
If there is a crown lien or any other lien, then those would get discharged by way of a distribution of the excess proceeds of sale. If for example, the back taxes were $10,000, and you paid $100,000. then the $90,000 would get paid into court...the crown would have first dibs at it, and if they had a lien of $140,000, then they should get the $90k and you still owe them $50k. You should go out of your way to make sure that they know of the excess, and ask the judge for it, after the Municipality pays it into court, otherwise they will still be looking to you for the full $140, and the old owner (in the event there were no other interested parties would be entitled to the $90k sitting in the courts. In the event that neither of them asked for it, then after the one year waiting period, the Municipality would be entitled to claim the windfall...at your expense.
In fact, you should do your best to get the crown and the municipality to see eye to eye, and do a direct payment to them instead of payment into court. Payment into court, in essence, gives all of the jilted interests an opportunity to go and vie for the funds. The crown on the other hand has first dibs and is still on title, there is no reason to pay it into court in the first place given that fact. However, if the Crown is unaware of the sale, and fails to knock on the door at town hall prior to it being sent to the courts, then they will have to go there...but there is little onus on them (since they've got you by the gonads anyways). The objective is to ensure that the money falls into the proper hands, and ...the squeaky wheel...well you know.
Normally, the town and the crown will already have had discussions in this matter, and it wouldn't hurt to talk to the Treasurer on the matter in advance of the sale. Don't count however on the Municipality even knowing about the crown lien, or that they are prepared to make direct payment.
There is no guarantee on this, and you must still consider the possibility that you will be subject to the full crown lien when it is all over. Take caution when formulating your bid as you could get burned...if, on the other hand, the crown lien is satisfied through the excess proceeds distribution, then you got lucky.