Do we need to get more active in publicizing the downside of Tax Sales

[OTS Jeff]

I forget the exact quote and I don't feel like looking it up right now but it says basically that the township is responsible for transfering the title and clearing everything off of it exept obviously Crown Interests.

There are two issues here, who registers a tax deed, and 'clearing everything off...'. 

With regard to who registers a tax deed, this is dealt with in both the Municipal Act, 2000 and the Municipal Tax Sale Rules, as follows:

Municipal Act, 2001, section 379,
Conduct of sale
(5) The treasurer, in accordance with the prescribed rules, shall conduct a public sale
and determine whether there is a successful purchaser and,
(a) if there is a successful purchaser, shall prepare and register a tax deed in the name
of the successful purchaser or in such name as the successful purchaser may direct;
or
(b) if there is no successful purchaser, may prepare and register, in the name of the
municipality, a notice of vesting.



Municipal Tax Sales Rules
Registration
23. As soon as possible after a successful purchaser is declared in a sale under the Act, the
treasurer shall prepare and register the necessary documents in accordance with the Act.



With regard to clearing everything off title, here's what the Municipal Act, 2000 says about this:

Section 379
Effect of conveyance
(7) A tax deed, when registered, vests in the person named in it an estate in fee simple in
the land, together with all rights, privileges and appurtenances and free from all estates and
interests, except,
(a) easements and restrictive covenants that run with the land;
(b) any estates and interests of the Crown in right of Canada or in right of Ontario other
than an estate or interest acquired by the Crown in right of Ontario because of an
escheat or forfeiture under the Business Corporations Act or the Corporations Act;
(c) any interest or title acquired by adverse possession by abutting landowners before
the registration of the tax deed.

I hope this is helpful.

Best regards,

Jeff Oberman
President
OntarioTaxSales.ca

[netpred]

I want to be very clear that I do not like what OTS & Realtax do and the impact that they have on the marketplace. I have other issues with them as well. I think that I have always been very clear on this. However, one thing that I do appreciate about Realtax is that they attend to the registration of the tax deed so there is never a suggestion that the bidder retain their own lawyer. In addition, they do this fast; my understanding is that deeds are registered the next day after payment so there is less chance for a redemption.

Still, I continue to have issues with these companies  , but that is another story in another thread.

[Pfm1011]

. In addition, they do this fast; my understanding is that deeds are registered the next day after payment so there is less chance for a redemption.

 this is not the case,  They do not do them the next day, It takes several  days or a week or more just for the prepared forms to get back for signing and then several days from there to be registered. Bet on two weeks

[ErnestBidder]

  Perhaps the members should start querying the municipalities as to the timeline of their registration process for the successful bidder, and, if not within 24 hours, make their unhappiness known. I declined to bid on one offering, a few years ago, when I was told that their lawyer would have to take some time to examine each bid carefully, and he was going to be leaving on holidays a day or two after the bid opening, and so it might take a few weeks, (WHAT?) so I said I'd not bother.

 My first tax sale bid was successful and close to home, so I informed the municipality that I would pay up the next day and would they please be prepared to register the deed immediately, and they did so, for which I will always be thankful. In this day & age, I see no reason for the process not to be completed the same day, if the successful bidder has the balance of the funds available immediately after the end of the opening of the tenders, and this should be pushed by the members. As well, I wonder if the successful bidder would have cause for action should they drag their feet long enough to allow the delinquent taxpayer the opportunity to finally locate sufficient funds to pay the taxes up to date.

[ErnestBidder]

  Sorry, forgot to finish the thought: the municipality should be able to complete the registration the same day, IF given prior notification that they are expected to be able to do so on tender opening day.

[bobs]

I never knew that the municipalities where required to do this the same day.  If I am missing something please let me know.

[Dave2]

As well, I wonder if the successful bidder would have cause for action should they drag their feet long enough to allow the delinquent taxpayer the opportunity to finally locate sufficient funds to pay the taxes up to date.

There are some delay aspects in the process of tax deed registration that are beyond the control of the local Municipality in parts of the province.  In Northern Ontario (not certain of exact boundary, might be French River, but maybe someone more knowledgeable like Frank can clarify) the Municipality must get clearance from the Province before a tax sale deed can be registered (because of possible Mining claim issues.)  This can take 2 -6 extra weeks depending on time of year.

Taking a municipality to court requires a really worthwhile property.  In this case baring fraud
I think it will be difficult to prove.  In the only similar case I was personally involved in, the first place bidder was allowed more then the 14 days to come up with the funds and as the second place bidder I was not pleased to put it mildly.  The property was not worthwhile enough to get into a legal court battle over.    

Personally I think we should keep quiet and work it on an individual basis.  Not all properties have a significant risk of registration (E.g. if the former owner is no longer in existance). and for some of the delay issues I do not disclose publically how I get around the problem.  

There are also some cases post tax sale where I can see that I might want to contact the owner and buy his rights and pay the tax sale penalty prior to registration; (Shock of shocks; PFM is getting out his shotgun now and loading both barrels. ) Admitted if you don't do it right it might be a suicidal situation because if you don't do it right you could buy a property you lose to the winnng bidder.  

I have one now where I am going to work on it.  (It does not involve a member of this board so you can all relax.)  

[netpred]

As well, I wonder if the successful bidder would have cause for action should they drag their feet long enough to allow the delinquent taxpayer the opportunity to finally locate sufficient funds to pay the taxes up to date.

There are some delay aspects in the process of tax deed registration that are beyond the control of the local Municipality in parts of the province.  In Northern Ontario (not certain of exact boundary, might be French River, but maybe someone more knowledgeable like Frank can clarify) the Municipality must get clearance from the Province before a tax sale deed can be registered (because of possible Mining claim issues.)  This can take 2 -6 extra weeks depending on time of year.

Taking a municipality to court requires a really worthwhile property.  In this case baring fraud
I think it will be difficult to prove.  In the only similar case I was personally involved in, the first place bidder was allowed more then the 14 days to come up with the funds and as the second place bidder I was not pleased to put it mildly.  The property was not worthwhile enough to get into a legal court battle over.    

Personally I think we should keep quiet and work it on an individual basis.  Not all properties have a significant risk of registration (E.g. if the former owner is no longer in existance). and for some of the delay issues I do not disclose publically how I get around the problem.  

There are also some cases post tax sale where I can see that I might want to contact the owner and buy his rights and pay the tax sale penalty prior to registration; (Shock of shocks; PFM is getting out his shotgun now and loading both barrels. ) Admitted if you don't do it right it might be a suicidal situation because if you don't do it right you could buy a property you lose to the winnng bidder.  

I have one now where I am going to work on it.  (It does not involve a member of this board so you can all relax.)  

Well Dave, we disagree on this one. In my book this is not fair play. When I lose, I accept it and do not look for an underhanded way to subvert the process. A more likely result of your suggestion is that the owner will end up redeeming and selling to somebody else at an even higher price. Winning tenders is difficult enough without having to deal with that tactic. I like to play hard, but I also like to play fair.

[ErnestBidder]

  Perhaps the Municipality should get clearance from the Province 2 -6 weeks before the tax sale is held; why should we have to sit & twiddle appendages?

  You are telling us that you have a way to beat the winning bidder, so how do you know the winning bidder is not a member of this board? For that matter, how do we know that, if the deal is big enough, we wouldn't get screwed by you anyway? I agree with Netpred, I like to win fair and to lose fair. If I were to find that I was  shafted by someone by what I consider an underhanded move, I would be right onto my lawyer to find out what my chances were of suing everyone involved. Again, if all bidders were to voice their desire for closing within 24 hours, and have the funds right there at the bid opening, what choice would the municipalities have but to comply?

  I'm disappointed.

[Dave2]

Netpred/ Ernest Bidder:

Figured I would get a reaction on this one. You are both ignoring one key situation.

I should make a bet on this one but don't like to shoot fish in a barrel.

The answer to both your concerns is simple.  How about a case that NO bids were received?

Ergo no winning bidder and thus I can say with 100% certainty that no one on this board is at risk.  I would never recommend someone take the risks of trying to supplant a winning bidder, post tax sale because it is too risky.  If there is no winner dynamics are very different.

[netpred]

Dave:

No problem in approaching a municipality if no tenders and property vests in the municipality. However, in fairness, in your post you made reference to losing to the winning bidder.

[Dave2]

Dave:

No problem in approaching a municipality if no tenders and property vests in the municipality. However, in fairness, in your post you made reference to losing to the winning bidder.

Sorry if I confused the board by mixing apples and oranges.  If there is no bid there are only two possible parties you can approach to purchase a property you might still have interest in.  One is the municipality either to retender or purchase from once they vest and the owner.  Given that the municipality often does not hurry to vest property, looking at ownership more closely may make sense but as always it is high risk.   

[ErnestBidder]

  I just read Dave2's reply (Admitted if you don't do it right it might be a suicidal situation because if you don't do it right you could buy a property you lose to the winning bidder) and I think that, as I have a number of times, he lost track of his own train of thought. As long as someone is not trying to scoop the property out from under the winner, all's fair in love & war. You must admit Dave2, that that sentence was totally confusing, and I re-read it 6 or 7 times.

[Dave2]

 I just read Dave2's reply  and I think that, as I have a number of times, he lost track of his own train of thought. As long as someone is not trying to scoop the property out from under the winner, all's fair in love & war. You must admit Dave2, that that sentence was totally confusing, and I re-read it 6 or 7 times.  

I guess I should confess my sins and move on.  The underlying issue is if a property does not sell at at tax sale what can we do to get it post tax sale.  Like others I am not pleased that
people want to commercialize the process (which I knew nothing about by the way) as I would prefer to work below the radar. Getting back to the fundamentals.

In my limited experience municipalities are not in a rush to vest or subsequently dispose of property.  My first question to Frank or other less confusing people then myself is how long do they have; I have been told both 1 year and 2 years by municipal officials in different townships for vesting.  If any one has the information and the appropriate reference I will donate a cold one or two; whatever your legal safe capacity is.
 
While waiting for the muncipality the other alternative in theory is to approach the owner and purchase it and clear the aoutstanding taxes at the deal closing.(it is difficult but my lawyer knows how to do it because we had a regular property sale) that the owner used the municipality and his tenants to supply financing).   My belief is for properties that do not sell at tax sale is this can be potentially a very difficult process.  

Why because most properties today that do not sell, have limited value.  Municipal tax people in some cases have not been collecting the taxes for years. (In one case I know for 40 years).  The owner is no longer alive and we are dealing with a long closed estate.  In that case how does one purchase the property.  

Another one I have come across is a corporation that the province has disolved.

[Frank]

Glad you asked Davey

Used to be one year in which the Municipality had to vest, and if it didn't it had to de-register the property and go through the whole process all over again, to put it back up for sale.  Now (as of 2006), they have extended the vesting timeline to 2 years:

(15)  If a notice of vesting is not registered within two years after a public sale is conducted at which there is no successful purchaser, the tax arrears certificate with respect to the land shall be deemed to be cancelled. 2001, c. 25, s. 379 (15); 2006, c. 32, Sched. A, s. 156 (5).

and they have also given the treasurer the option to conduct the sale over again, within that two year time-line:

380.1  (1)  If the treasurer conducts a public sale and there is no successful purchaser, the treasurer may, within two years after the date of the public sale, offer the land for public sale by public auction or public tender, as the treasurer decides, a second time in accordance with the prescribed rules. 2006, c. 32, Sched. A, s. 157.

So, if you look at some of the older posts on the board, you will notice that one year was referred to as the vesting time-line...however, this has been changed as above.   Never too old to get an education..... ...yet another tall cold one that you owe me.

Also, I have seen properties that had forty years of tax arrears as well.  The reasons for not registering and selling them for the back taxes varied, from having handicapped residents, to having handicapped properties....the attitude towards the latter changed with the introduction of brownfields programs, and the attitude towards the former rests with social services.

[
quote author=Dave2 link=topic=1830.msg7565#msg7565 date=1302200204]
[  My first question to Frank or other less confusing people then myself is how long do they have; I have been told both 1 year and 2 years by municipal officials in different townships for vesting.  If any one has the information and the appropriate reference I will donate a cold one or two; whatever your legal safe capacity is.
 
While waiting for the muncipality the other alternative in theory is to approach the owner and purchase it and clear the aoutstanding taxes at the deal closing.(it is difficult but my lawyer knows how to do it because we had a reuglar property sale) that the owner used the municipality and his tenants to supply financing).   My belief is for properties that do not sell at tax sale is this can be potentially a very difficult process. 

Why because most properties today that do not sell, have limited value.  Municipaly tax people in some cases have not been collecting the taxes for years. (In one case I know for 40 years).
[/quote]