Ontario Tax Sale Property Forum
Tax Sale Forum => Property Information => Topic started by: Ken on February 09, 2007, 01:55:53 PM
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Long time reader, first time posting...
If anyone is interested in the Quinte West tax sale properties, I would like to share my research;
FN 07-01 It is a rough house on a small lot in a rough part of town. Looks to be owner occupied. The registered owner is an older lady.
FN 07-02 An old convenience store that has seen better days in a not so busy location.
FN 07-03 A nice newer house that looks to be owner occupied as well. I suspect this one may be cancelled.
FN 07-04 Vacant land for which the owner has a court order against him from Revenue Canada ("the Crown") for over $580,000. This order will probably survive a tax sale and become liable to the new owner.
As for me, I do not want to kick out a tenant, run a convenience store or buy a piece of vacant land for over half a million dollars!
Thanks for the input from others and good luck in the search for a deal!
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How did you figure about Crown Lien? On the Title Search said about 87 charges of $150K from Bank of Montreal.
Is the Crown Lien listed under the Name Search?
What is the connection between Title & Name Search?
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Thanks Ken for the details. It's members like you who help the long time readers.
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Yes thank you Ken,
Our private conversation was very enlightening for sure. Thumbs up to you.
Rich
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Hey all, thank you for the comments and e-mails!
To answer Ion's questions, specifically in regard to Quinte West listing FN 07-04:
I found out about the Crown lien by doing an execution search on the owners name (I think this is what you refer to as a 'name search').
The property title search shows 5 executions on the actual record of title under the 'Property Description" heading at the top of the report.
A title search of the property and execution search of the owner are related, as far as my understanding goes, as follows: Any real property that you own may be subject to liens and collection enforcement caused by any court ordered award or settlement. This 'lien' lasts with the property under conditions of sale. This is why we almost always use a lawyer to close any real estate transaction. They can legally hold monies in trust until release of all interests in the title are effected.
Under a tax sale, any personal or commercial liens (such as a mortgage or court order) are wiped away while any Gov't ones are not.
What I am sure of: The Government does not loose in any tax sale. Their lien carries forward with the new title. A tax sale may even make the Governments lien a higher priority than before allowing them more leeway in enforcing collection. This means that after you have paid your hard earned $$ to a Municipality, the Federal Gov't could repossess the property right out from under you, legally, and sell it for fair market value. You would have no rights and the owness would be on you for taking title to a 'flawed property'. This is why lawyers earn their fee's. To help you avoid a situation like this from arising.
I am not going to put my hard earned dollars into a fire trap like this one.
Sure, you can negotiate with the Crown, but if their lien is for 800,000 or 1,000,000 million dollars today (after penalty and interest) and they can repossess the property after tax sale and sell it for fair market value (tens of thousands of dollars), why the heck would they take 2,000 from you to release their lien?
My 2 cents for what they are worth. I am disappointed as well as this vacant land looks great and would be worth owning. Just not under these circumstances.
I welcome any feedback if my understanding is incorrect.
Ken
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Ken, thanks for your message and generous feedback, it's much appreciated.
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Thank you Ken.
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Ken
You are 100% correct in your assessment, thanks for the detailed explanation. I've been trying to emphasize the importance of a personal search as well as the property title search, and some have poo-pooed it as being a waste of expense. This is a prime example of where one can lose their shirt - literally.
Frank
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kEN THANKS FOR THE INFO , DID YOU DO SEARCHS ON ALL THE PROPERTIES LISTED?
THANKS AGAIN
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Hi
Roll: 1204.414.015.14932
90 CENTRE STREET, FRANKFORD
Has been redeemed.
JAM
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To any one interested the tenders were opened today and the results are as follows:
07-01 Older house down town..........1st) 32,900 , 2nd) 31,100.
07-02 Old store................................32,100 only tender but didn't didn't meet min. bid of 52,000+/-.
02-03 nice house ............................ AS previously posted redeemed.
02-04 33 acres with crown lien of over 500,000......sold for 1st) 60'001, 2nd)52,356.
I heard the name Ken mentioned a couple of times was that you Ken?
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Sorry, I am new here. May I get confirm from you? For the last deal,
02-04 33 acres with crown lien of over 500,000......sold for 1st) 60'001, 2nd)52,356.
Does that mean: the buyer need to pay 500,000 to clean up the lien or debt?
Thanks
Jenny
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Well, that's a good question.
All I can say with all certainty is that when I called Canada Customs and Revenue (or who ever it was that had the Writ Of Execution against the owner) the gentleman I talked to said that even though this guy owed the Gov. a lot more money then what this lot was worth they would be agreeable to postpone the execution on the lot if it sold for "close to fair market value". He seemed very reasonable and explained that they work for us the "Tax Payer" and that they would be held accountable if they let this property go for a fraction of the "fair market value" but that they didn't want to tie up the property by wanting to get $500,000 for a lot assessed at$55,000. He could only speak for the Bellville office so don't assume this to be Gospel in the future. Do your home work.
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Does anyone know who the successful bidder was on the Quinte West 33 acre parcel?
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Well, that's a good question.
All I can say with all certainty is that when I called Canada Customs and Revenue (or who ever it was that had the Writ Of Execution against the owner) the gentleman I talked to said that even though this guy owed the Gov. a lot more money then what this lot was worth they would be agreeable to postpone the execution on the lot if it sold for "close to fair market value". He seemed very reasonable and explained that they work for us the "Tax Payer" and that they would be held accountable if they let this property go for a fraction of the "fair market value" but that they didn't want to tie up the property by wanting to get $500,000 for a lot assessed at$55,000. He could only speak for the Bellville office so don't assume this to be Gospel in the future. Do your home work.
RichD
That's interesting, thanks. Just so I'm clear, was this gentleman saying Canada Revenue wouldn't exercise the lien if the successful bidder purchased at below market value, which it inevitably was? In that case when would it have been postponed to?
To add to RichD's posting there were 18 bids on the property, have I missed something because I can't imagine they bidded without having execution searches, therefore knowledge of the lien? Was there a legal loophole or agreement in place from Canada Revenue to write off the lien?
Has anyone had experience tackling sizeable liens post purchase?
Thanks
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[I can't imagine they bidded without having execution searches, therefore knowledge of the lien? Was there a legal loophole or agreement in place from Canada Revenue to write off the lien?
It's easy to imagine. I've seen people bid on properties without doing searches, or even a drive-by to check the condition of the property. I Once sold one with a Crown Lien, and the fellow did his search afterwards - realizing the extent of the lien he backed out and forfeited his $16,000 deposit - imagine that.
In this case, if the property is worth $80,000 and the guy bought it or $60,000. The crown still wants $80,000 for it since that is what they could now sell it for. Nice deal, the guy pays $140,000 total, for something that is only worth $80,000 - you do the math. Once the guy pays the tax sale bid amount, the crown will be the only interest in the property, and they won't settle for anything less than market value, why would they - that's what it is now worth.
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Doubt your buyer will take that route again!
33 acre scenario I understand now, thanks. Is it common place for the Crown to negotiate this way as RichD found in his enquiries? Do they provide declarations of such to bidders prior to a tax sale?
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What he told me was that so log as it sold for close to fair market value, and he used the assessed value of 55,000 as an example he said if it goes for 50,000 they wouldn't quibble over a few grand and they will release the property if however it sells for 16,000 they would have a prob. with that and the successful bidder would need to cough up the difference to the Gov. prior to them releasing it.
I bid 42,000 but was out bid by 2 others.