Ontario Tax Sale Property Forum
Sheriff Sales / Foreclosures => General Discussion => Topic started by: bobs on August 26, 2010, 01:46:34 AM
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I was told by the township that the tax sale is on hold until the 1st of September waiting for the property owner to "maybe" pay balance. Has anybody ever heard of a township doing such a thing? Has six years opportunity to pay the tax not been enough?? The big question, if the owner does not pay the balance, does the sale go through on Sept 8 or does it have to be re-started??
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Better question
Does anyone know if this property is even worth looking at?
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I was told by the township that the tax sale is on hold until the 1st of September waiting for the property owner to "maybe" pay balance. Has anybody ever heard of a township doing such a thing? Has six years opportunity to pay the tax not been enough?? The big question, if the owner does not pay the balance, does the sale go through on Sept 8 or does it have to be re-started??
I am not quite certain with "on hold" means. They have called for a tax sale and I believe they have to proceed unless the property is redeemed or the tax sale cancelled. As it is outside my territory I am not following through to check quality.
I see three possibilities:
a) This is an attempt to discourage non local people from bidding an attractive piece of property that some one hopes to get hold of ( Putting it more bluntly as alleged by others in the board in other situations the "FIX IS IN SO TO SPEAK). Might be interesting if you are nearby to check status after long holiday weekend.
b) The property is redeemed.
c) The sale is cancelled because of special circumstances. I am aware of one local case to me where this happened with an occupied dwelling of not high value that an old widow was occupying. I believe one of the social service agencies covered the tax because this was felt cheaper then putting her in an old age home.
Hope this helps
Dave
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Dave:
I don't really see this as a fix. The taxpayer has probably contacted the municipality and has indicated that they will redeem. I think that most treasurers would rather see a property redeem than to see the owner lose it to a tax sale. Quite frankly I share the sentiment. I wouldn't want to win a tender only because the owner has fallen on hard times. It is different when the owner dies or has simply walked away from a property.
The old lady case is, I suspect, one of last year's Trent Hills offerings. I went out to see the property, it was quite run down and the area was a bit swampy, but I understood that it was occupied by an eccentric senior. I think that she may have kept cats - not one or two but dozens. I figured that some agency would step in because it would be interesting to see what would have happened had the municipality sold a property out from a mentally unfit person. Lots of legal, moral and public relations issues. Anyways, I'm glad that the old lady held on to the property but I'm sure that others may have been disappointed.
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Dave:
I don't really see this as a fix. The taxpayer has probably contacted the municipality and has indicated that they will redeem.
This is where a treasurer must use their discretion and delay the sale. " A person on whom a discretion is conferred has a duty to exercise that discretion when requested to do so in appropriate circumstances: Toronto Newspaper Guild v. Globe Printing Co
Most likely the taxpayer has a valid reason not to pay prior to sale date .IE Taking bank loan but bank cant process loan prior to sale date. There is a precedent setting case dealing with a treasurer who sold property after property owner told treasurer that they were getting bank loan and the taxpayer won as the court found the treasurer should have stopped the sale . The taxpayer arranged a bank loan and while the loan was being processed the treasurer sold the land.
Cunningham V Front of Yonge http://www.canlii.org/en/on/onca/doc/2004/2004canlii33344/2004canlii33344.html (http://www.canlii.org/en/on/onca/doc/2004/2004canlii33344/2004canlii33344.html)
This is a good case to read as getting a COMPLETE understanding the circumstances may help you out some day if the taxpayer comes to redeem after you win a taxsale. The circumstances and decision in this case are widely misunderstood and misquoted .
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As always my esteemed colleeges put it better then I could. On the off chance that it is a property to die for all I am trying to do is help other deserving members of this wolfpack get fully fed. As a suspicious old bastard I always wonder if an unusual case is really an attempt to restrict competition. >:(
Most likely not and like Netpred I try to avoid those cases where an unfortunate occupant loses
their home.
Sooner or later when I return to the marketplace I hope that all members of this board are so full and happy they are content to lie in the warm sunshine and let me face my preferred number of bids which stands at one (only mine). ;D
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PFM's technical brillance always continues to astound me. Well deserving of an additional applaude to give a him few more salutes he richly deserves. Love to meet him in person. I am a such an incompetent in these technical knowledge things. That is why he is #1.
Cunningham V Front of Yonge http://www.canlii.org/en/on/onca/doc/2004/2004canlii33344/2004canlii33344.html (http://www.canlii.org/en/on/onca/doc/2004/2004canlii33344/2004canlii33344.html)
This is a good case to read as getting a COMPLETE understanding the circumstances may help you out some day if the taxpayer comes to redeem after you win a taxsale. The circumstances and decision in this case are widely misunderstood and misquoted .
Quoting directly from the case there is an interesting lesson to be learned here. Bottom line by waiting for second bid to save less then $20,000 it may have cost the family that won the bids the farm. Look at dates closely and imagine if the first bidder had paid up promptly and deed registered prior to the legal notice being served. Might have been a whole different legal ballgame if deed had been registered by time legal notice was served.
Bottom line is get your deed registered fast. Also shows buying second bid is not without risk when you have bought one of real value.
When the tenders were opened on June 4, Leonard and Casey Roth were declared to be the successful tenderers, for a price of $80,000. They were advised that they had fourteen days to pay the balance of the purchase price owing after being credited with their deposit. Leonard and Casey Roth did not pay the balance owing, however. Instead, on July 3, 2003 ? fourteen days after the Cunninghams? application had been commenced, and thirteen days after a certificate of pending litigation had been registered against the property ? the Mallettes and Cory and Elisabeth Roth, who had been the second highest bidders at $61,055.43, were awarded the successful purchase. The record does not indicate whether there is any relationship between the two Roth groups. The application judge noted that the township had not made any effort to forfeit the $16,000 deposit of the first group, as it is obliged to do under the Act
Later on there are some telling words.
However, I do not see the continuing existence of the discretion to cancel a tax sale "pending registration of the tax deed"
Sorry for long post but we know that the members of this board will not have the same favourable treatment as locals.
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Quoting directly from the case there is an interesting lesson to be learned here. Bottom line by waiting for second bid to save less then $20,000 it may have cost the family that won the bids the farm. Look at dates closely and imagine if the first bidder had paid up promptly and deed registered prior to the legal notice being served. Might have been a whole different legal ballgame if deed had been registered by time legal notice was served.
Bottom line is get your deed registered fast. Also shows buying second bid is not without risk when you have bought one of real value.
When the tenders were opened on June 4, Leonard and Casey Roth were declared to be the successful tenderers, for a price of $80,000. They were advised that they had fourteen days to pay the balance of the purchase price owing after being credited with their deposit. Leonard and Casey Roth did not pay the balance owing, however. Instead, on July 3, 2003 ? fourteen days after the Cunninghams? application had been commenced, and thirteen days after a certificate of pending litigation had been registered against the property ? the Mallettes and Cory and Elisabeth Roth, who had been the second highest bidders at $61,055.43, were awarded the successful purchase. The record does not indicate whether there is any relationship between the two Roth groups. The application judge noted that the township had not made any effort to forfeit the $16,000 deposit of the first group, as it is obliged to do under the Act
Later on there are some telling words.
However, I do not see the continuing existence of the discretion to cancel a tax sale "pending registration of the tax deed"
Sorry for long post but we know that the members of this board will not have the same favourable treatment as locals.
There is several key points in this case. The taxpayer contacted the treasurer several days PRIOR to the sale. There is no reason to doubt the taxpayers story about the wife hiding the spending. The treasurer should have recontacted the taxpayer prior to the sale to confirm the requirements to pay prior to the sale or arranged a reasonable extension. One simple phone call would have saved alot of trouble
The Roth group 1 did not pay
If the Roth's had paid immediately then common law would have kicked in and the property would have been theirs. The taxpayers excuse about the wife , although believable , is not a legal defence. The true legal position is that he can later sue his wife for the loss but he still loses the land .
Sidenote: he went to his lawyer . His lawyer was negligent as he should have called the town to confirm that Mr Cunningham had arranged a loan and would be paying. If Cunningham had lost the case LPIC( lawyer insurance) would be liable ( but they would never pay unless he aggressively sued as they LPIC are complete douchebags who fight every and all claims then would wear him down until he took 30 cents on the dollar)
This is where the confusion lies. Everyone now presumes automatically that a taxpayer can redeem up till the deed is registered. Under the law , the registration of the deed simple ensures NOTHING ( except fraud) can reverse the sale. This is a hard stop to prevent frivolous lawsuits or taxpayers coming back years later.
Under the rules, the redemption RIGHT ends at advertisement but it is now accepted that the taxpayer can redeem up until tender opening. The taxpayer has no right to redeem after the sale and this case does not grant that right. This clarifies the right of the treasurer to exercise discretion and cancel the sale.
However:
Section 11.2) If the higher tenderer makes the payment as set out in subsection (1), the treasurer SHALL declare the tenderer to be the successful purchaser. O. Reg. 181/03, s. 11 (2).
My take is as follows : Firstly : you are sent a letter that clearly states if you pay X dollars you own the land . Therefore if you pay , you win by common law. You have fulfilled your responsibility under the tender terms.
Secondly the rule 11.2 clearly removes any discretion from the treasurer and he/she MUST declare you the winner and register the deed .
As far as I'm concerned, the minute you pay in full this deal is done and if push came to shove the courts will support this position
If the Roth's had not screwed around and simply paid in full immediately then the farm would have been theirs and this would have never made it to court and cunningham would be suing his wife or the lawyer
Any other takes ?? I can find no case where the amount was paid in full and the taxpayer redeemed .( if someone has a case I will backpeddle accordingly)
Can someone please provide the full "Deverell v. Anson" decision
This is of course is " free advice worth every penny you paid"
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Quote from PFM
As far as I'm concerned, the minute you pay in full this deal is done and if push came to shove the courts will support this position
If the Roth's had not screwed around and simply paid in full immediately then the farm would have been theirs and this would have never made it to court and cunningham would be suing his wife or the lawyer
Any other takes ?? I can find no case where the amount was paid in full and the taxpayer redeemed .( if someone has a case I will backpeddle accordingly)
As illustrated in the case I have always been worried about high legal costs: For Trial Loser paid $45,000 to winners and for appeal again a $20,000 added cost plus their own. Until the deed has been registered I am always worried that with my wierd luck I would end up setting the legal precedent.
One thing on registration I have encountered is a possible delay because treasurer needs to talk to Revenue Canada about split between residence and non residence portion of property for GST / now HST. As this case shows don't delay hustle your buns. In one case where this happened to me on Georgian Bay I arranced with treasurer to pay maximum GST with understanding that once the right figures were available I would have a credit on my tax account. (Treasurers don't mind being overpaid).
PFM I look forward to your visit up there second week of September along with another individual 8) Just a caution his pet gator Rocco has grown a little and I understand Rocco maybe in attendance. (see attachment) You will note I have taken care not to expose his secret identity in accordance with your wishes
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Township has informed me that the Montague tax sale will not be proceeding.
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"Any other takes ?? I can find no case where the amount was paid in full and the taxpayer redeemed .( if someone has a case I will backpeddle accordingly)"
G2020 did correct me ... ( my ego is substantially bruised ;D)
In the "Deverell v. Anson" decision the property was paid for but the courts reversed the sale I still cant find details but what I do have is ... The owners tried to pay PRIOR to the sale but the treasurer refused to accept payment. Sale proceeded and the owner went to court and reversed the sale. This was based on treasurer not using her/his discretion to cancel the sale after advertisement but prior to sale. Despite wording of the act, It is now standard practice to allow redemption up to the tender opening which is entirely reasonable
I could still use the actual decision for my records as I can only find the appeal decision .This is the appeal decision
[1] For purposes of our disposition of this appeal we are prepared to assume, but do not decide, that the appellant complied with the substantive (including notice) provisions of the Municipal Tax Sales Act. We thus accept that the appellant municipality was entitled to register a tax arrears certificate (s. 31) and proceed with the sale of the respondents' property by public sale, auction or tender (s. 9(2)).
[2] It is common ground that the respondents sought relief from forfeiture under the provisions of s. 12(6) of the Act which, in the treasurer's discretion, permits the issuance and registration of a cancellation certificate if the treasurer forms the opinion that:
12. (6) (a) it is not in the financial interests of the municipality to continue with proceedings under this Act; or
(b) because of some neglect, error or omission, it is not practical or desirable to continue proceedings under this Act,
the treasurer may register a cancellation certificate in the prescribed form, but this subsection does not apply so as to prevent the treasurer from registering a new tax arrears certificate and proceeding under this Act.
[3] The tax arrears on the property purchased by the respondents for $85,000 were $884.09. The respondents tendered payment of those tax arrears after hearing of the proposed sale but before the sale was completed. The appellant municipality chose not to accept the tendered payment. The incomplete tax sale purchase price is apparently $20,777. The appellant has no obligation in law to complete that sale.
[4] Neither the treasurer's affidavit nor her cross-examination on it refers to the respondents' application for relief under s. 12(6) or to the treasurer's disposition of that application. Thus, we know only that the application was refused. We do not know why the treasurer formed the opinion that she did or whether, as the section requires, she took into account the factors set out in s. 12(6)(a) and (b). In our view, had the treasurer considered the relevant factors, the cancellation certificate that the respondents sought should have issued. No other conclusion would be reasonable in the context of the relieving provisions of s. 12(6). There is nothing in the evidence or the appellants' submissions that would suggest that if the treasurer reasonably took into account the factors set out in s. 12(6)(a) and (b) there was a basis upon which she could form the opinion that the cancellation certificate should not issue.
[5] Accordingly, the appeal is dismissed with costs payable by the appellant municipality to both respondents.
So I shall backpeddle but stand by my previous post providing that the treasurer did not refuse payment or negotiate payment prior to the sale ( cunnningham) . In the deverall case , the sale should have never occured as the treasurer was clearly unreasonable by refusing the payment prior to sale.
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Pfm, I find this interesting, as I was the successful bidder on a residential property, where the owner sat in the audience, the bids were opened, and he then went and paid up the taxes in full. I've been told that the owner can pay the amount owing right up to the very instant the deed is registered, but it seems to me that, now, as soon as you pay the total amount owing on your bid, you are the new owner. This is why I take the balance with me to the bid openings. Some municipal staff will try to delay, saying their lawyer has to examine all the bids (usually tomorrow or the day after), but you have to fight it.
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The law on this point is clear as far as I am concerned - the treasurer has the discretion to accept payment and cancel the tax sale at any time before the tax deed is registered. Discretion means that they can accept payment if they wish.
Thats the whole point of this thread..My interpretation is that the minute you pay, its a done deal and the treasurers descretion is removed by section 11.2..
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The law on this point is clear as far as I am concerned - the treasurer has the discretion to accept payment and cancel the tax sale at any time before the tax deed is registered. Discretion means that they can accept payment if they wish.
Thats the whole point of this thread..My interpretation is that the minute you pay, its a done deal and the treasurers descretion is removed by section 11.2..
It's only a done deal that your name will be the one that the Treasurer will on the new deed...provided that he gets a chance to register your name on title. If the old owner comes in before that minute of registration....you are cooked (according to the courts)
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Further to above however
Nonetheless, I am satisfied that the treasurer would have been entitled to resort to subsection 12(6)(b) for the exercise of her discretion in the circumstances of this case. I do not read the words ?some neglect, error or omission? in that provision as being limited to conduct on the part of the municipality, as the appellants contend. The neglect, error or omission may be on the part of the municipality or the taxpayer, because subsection 12(6) is in the nature of a general provision for relief from forfeiture in the circumstances indicated. It makes no sense to have a relief from forfeiture provision that does not respond to neglect, error or omission on the part of the person seeking the relief.
[37] The scope of the conduct is not unlimited, however. It clearly must relate to ?proceedings for the sale of land under [the] Act?, as the opening words of s. 12, setting the stage for voidable proceedings, indicate. In Inter-Fund Mortgage Corporation v. Welland (City), [2003] O.J. No. 1738, this court upheld a Superior Court decision concluding that subsection 12(6)(b) pertains to conduct that has occurred ?in the tax sale process itself? [emphasis added] (August 24, 2000), 11573/00 at para. 29 (Ont. S.C.J.).
[38] The appellants argued that Elliott stands for the proposition that the neglect, error or omission must be that of the municipality and must involve ?a departure from the statutory requirements relating to a tax sale proceeding?: see Elliott at para. 35. In that case, however, Morden A.C.J.O. made it very clear that he was not determining the full reach of ? ?error or omission? in s. 12(2)(b)? and acknowledged that it may not be restricted to an error or omission in which the municipality is implicated. Moreover, he was expressly not dealing with the treasurer?s discretion under subsection 12(6).
[39] The language of subsection 12(6), in my view, is broader and less limited than that of subsection 12(2)(b). Subsection 12(2) states:
Subject to subsection (4) and to section 13,[5]
(a) a failure on the part of the treasurer to substantially comply with section 4 or subsection 9(1); or
(b) an error or omission in the registration or sale of the land, other than an error or omission mentioned in subsection (5),
renders the proceedings under this Act voidable.
[40] Thus, the error or omission contemplated in subsection 12(2)(b) must relate to something in connection with ?the registration or sale of the land?. In that context, Morden A.C.J.O. held in Elliott that the failure of one of the appellants in that case to read the notices that had been received, and her decision to leave such matters to her husband ? a situation analogous to that of Mr. Cunningham here ? could not fall within the scope of ?error? or ?omission? in subsection 12(2)(b).
[41] I am fortified in my view of this by the scheme of the legislation in section 12 of the Act, which distinguishes between the voidability of subsection 12(2) failures, errors or omissions, on the one hand, and the voidability of subsection 12(6) acts of neglect or errors or omissions, on the other. The disposition of subsection 12(2) situations is governed by subsection 12(3), which requires the treasurer to register a tax arrears cancellation certificate if he or she becomes aware of such a failure, error or omission before the registration of a tax deed or notice of vesting. Subsection 12(6) is a self-contained discretion, however, with no express limitation attaching to the ?neglect, error or omission? triggering the exercise of that discretion under paragraph 12(6)(b). Thus, I see no reason for limiting the discretion to some neglect, error or omission on the part of the municipality. I would limit it, as indicated, to some neglect, error or omission on the part of either the municipality or the taxpayer, but within the proceedings for the sale of land themselves, or ? in the language of Inter-Fund ? in the tax sale process itself.
"If the old owner comes in before that minute of registration....you are cooked (according to the courts"
Im still looking for that "cut and dry" and have successfully "argued" my point with a city ..
Much of a towns behaviour is also based on who is more likely to proceed against a town.. A broke home owner who has lost his house or an investor who has no true losses , only lost opportunity. So should you ever end up in this situation follow Netpred "if any of you face this issue, you should speak to your own lawyer and do as you wish"