Ontario Tax Sale Property Forum
Tax Sale Forum => Questions and Answers => Topic started by: Dave2 on June 14, 2012, 12:20:57 AM
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I have heard from some of the more successful members of the board that in certain cases where they were the winning bidder they met the someone at a bid opening who wanted to buy the property.
In some cases it has been claimed that the property was directly sold to the buyer without registering it in the winning bidders name but into the buyers directly by directing the selling municipality to register it in the other buyers name.
While I agree that this is a great way to save money (you avoid land transfer costs hopefully and you have no or minimal legal costs), my question is how do you do it and avoid risks of non performance. (E.g. the owner shows up to redeem).
While we all agree this is a great idea I don't see how to do it safely unless you have a property that there is no legal owner on title. (i.e. it is not in land titles which of course could lead to a quit claim.) heaven forbid?
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Dave:
There are two ways to do this as I see it. The first is when the high bidder sells to the second bidder. In that case, all the first bidder has to do is walk away leaving the property to the second bidder. I would use a lawyer and have funds held in trust to ensure compliance.
The second situation would be a third party sale (not necessarily to the second bidder). In that case, the high bidder would direct the municipality to register the tax deed in the name of the buyer, thereby bypassing title going into the name of the high bidder. Again, you would need to use a lawyer to hold funds in trust. Actually, each party would need a lawyer, but I think that it can be done.
I hope this helps.
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Obviously, anything is doable, but these types of deals are frought with little things that can trip you up...get a lawyer and hold funds in trust is the only way to go. All the while you are tinkering around the edges on these types of deals, the previous owner is hovering and possibly coming in the to scoop it back on you,,,,you lose, because you were playing games, just pay your money and close on the thing as quickly as possible. 8)
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Obviously, anything is doable, but these types of deals are frought with little things that can trip you up...get a lawyer and hold funds in trust is the only way to go. All the while you are tinkering around the edges on these types of deals, the previous owner is hovering and possibly coming in the to scoop it back on you,,,,you lose, because you were playing games, just pay your money and close on the thing as quickly as possible. 8)
Agreed!
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Obviously, anything is doable, but these types of deals are frought with little things that can trip you up...get a lawyer and hold funds in trust is the only way to go. All the while you are tinkering around the edges on these types of deals, the previous owner is hovering and possibly coming in the to scoop it back on you,,,,you lose, because you were playing games, just pay your money and close on the thing as quickly as possible. 8)
Basically can't agree with you more but:
1) We country boys are not fast like you city guys but I can say Municipality was paid in full by bank draft within 20 minutes after bid(s) opening concluded. Is that fast enough for you???
2) This property may not be legally redeemable. (talking with my lawyer on that one) and fundamentally more worried about my boss on this one; given what was bought, then redemption.
3) Have to advise municipality by tomorrow whether they use existing title instructions on file.
Still confused about one thing. From a legal perspective what are you selling other party because you do not own the property ????
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[ Still confused about one thing. From a legal perspective what are you selling other party because you do not own the property ????
An assignment of your rights.
This sounds like trading futures on a stock where by you are selling the right to purchase even though you don't own the thing you are selling... for me this is too heavy on the 'non-real' as it's all just paper and nothing physically in hand, or underfoot in this case. Your situation is different as you have 'purchased by way of tender' the property but you have not registered it... but at any rate as a newbie, I'm out, as the complications would like rear up and bite me - why not negotiate your LTTax into the sellers purchase agreement?
As a point of interest to some a similiar situation now exisits in the Ontario solar developement world under the FIT program; existing contracts that have higher rates then current offerings but are not yet built are being bought and sold for as much a $1/Watt... crazy times we live in
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Advise your lawyer of your somewhat unique arrangement and do not let him complicate this simple transaction. Have the buyer send the funds to your lawyer "in trust". Direct the title transfer into the other parties name. Frank is right. Something could arise prior to the transfer however that can happen on any transaction. Your lawyers fees should be minimal but it may provide you with some comfort.