Ontario Tax Sale Property Forum
Sheriff Sales / Foreclosures => General Discussion => Topic started by: bobs on August 14, 2010, 05:30:10 PM
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Does anyone know the exact legal rules of when full payment is due for the first bidder? Once it goes past this time it goes to the 2nd bidder. Basically is it fourteen days including up to the end of the final day or is it fourteen days from the exact minute the notice was mailed?
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(1) If, after complying with section 9, two tenders remain, the treasurer shall immediately
notify the higher tenderer, by ordinary mail sent to the address shown in the tender, that the
tenderer will be declared to be the successful purchaser if, within 14 days of the mailing of the
notice, the balance of the amount tendered, the applicable land transfer tax and the
accumulated taxes are paid, in cash, to the treasurer. O. Reg. 181/03, s. 11 (1).
(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).
(3) If the higher tenderer does not make the payment as set out in subsection (1), the
tenderer?s deposit shall be immediately forfeited to the municipality and the treasurer shall offer
the parcel of land to the lower tenderer in accordance with section 12. O. Reg. 181/03, s. 11 (3).
Probably more a Frank question but my take is
that allot has to do with the treasurers wishes, since it is regular mail and not registered , I am betting the mailing day would not be counted , So it would be the end of business on the 14Th day following . I would not want to be a second place person who is fighting over minutes . however once you have a clear 14 days the treasurer has no choice but to declare you the winner IN THEORY
Of course the 14Th day must be a normal business day.
HOWEVER You have to be careful trying to force a treasurer to void a first as a judge would likely extend a treasurers discretion to allow the treasurer to grant and an extension to the first bidder for extenuating circumstances. Since you are not party to the communications between the Treasurer and winner, They would not have to provide you a reason for the extension if they didn't want to other then saying "By mutual agreement "
The court would allow the treasurer to give the high bidder a fair bit of latitude before taking their deposit and kicking to second. However if the high bidder just cant come up with the money and the treasurer is displeased, the same court would support the treasurer slamming the door 14 days to the minute it was mailed.
So as with all law, it would be the wishes of the treasurer for how the law is twisted.
Additionally if the is any suspicious activity or the second is being a douchebag , the clock would be stopped and the treasurer could not be forced to declare the second a winner. I had someone show up a few days after I won and claimed to be a family member and promised to pay. Treasurer told me not to pay for the land but I did and these people never showed again. I am sure it was the number 2 playing a game hoping I would follow the treasurers instructions and walk and then scoop the land
(his name has appeared in two court cases as a frivolous litigant ( Douchebag for short)
Let us know more details and we could provide a more accurate answer.
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It was the Mattawan township property. I was the second bid at less than half of the first. I contemplated the morality of selling the second bid but did not. The first place bidders paid in full at around 5pm on the fourteenth day. I completely agree if it was the next day it is very clear it would be mine. I too would not want to fight the "minutes" legal battle. I was just wondering if anyone experienced a successful fight of being the second bidder and winning the property because the first was only a couple of hours late on the fourteenth day.
I did find out that in this case the first place bidder had an interest in the property as they are adjacent landowners. They are inexperienced in tax sales and probably would have paid much more. Their deposit cheque was for 10000- so they obviously were prepared to bid up to 50000-. Extremely too much for this property.
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I received a letter from the township lawyer concerning this matter. They said "The legislation Act provides that a period of time described as beginning or ending on, at, or with a specified day includes that day."
I can't seem to find this quote in any legislation. Has anyone come across it?
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You must accept that the people paid and the treasurer accepted the payment , does not matter if it was 14 days or 15 days .. ....no voiding the deal at that point. You would have no leg to stand on in an attempt to bump them.
And if the land isnt worth 50K , who needs the headaches . Any potential legals would greatly exceed any profit potential
..and if you did get the land..I suspect you may have zoning problems in the future..since you screwed the neighbour
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While I have come second a number of times I have never won one as the second place bidder. The worst case that made me mad was one where the treasurer held up mailing the letter to the first place bidder so he or she could return from vacation.
Needless to so first place bidder was a local. >:(
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the treasurer held up mailing the letter to the first place bidder so he or she could return from vacation.
So much for .....the treasurer shall immediately notify the higher tenderer, by ordinary mail
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the treasurer held up mailing the letter to the first place bidder so he or she could return from vacation.
So much for .....the treasurer shall immediately notify the higher tenderer, by ordinary mail
I found out when I phoned after 14 days had elapsed and did a follow-up inquiry which is when I found out that the notification had not been mailed out yet. Unfortunately like many of the smaller rural properties the value was not worth a court fight particularly as you are dependent on municipality for rezoning.
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Win this battle and lose the war...sounds like a wise choice not to fight that one
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I wonder when you win (or did'nt win), are they supposed to call you ???...saying something like that "congratulations, you have won the bid and thanks for helping us.... we will be mailing you an official letter on so and so date...?"
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I wonder when you win (or did'nt win), are they supposed to call you ???...saying something like that "congratulations, you have won the bid and thanks for helping us.... we will be mailing you an official letter on so and so date...?"
They will call if you print your phone number on the tender. There is no room for a phone number but treasurers do appreciate it if you put it after your address. So if you work or not at home when they call, which will be the next morning, the message will be "... this is a message for ......... I am calling from the Municipality of ....... Please call me back at ......"
Magic words for those luckier than me ;D
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I found out when I phoned after 14 days had elapsed and did a follow-up inquiry which is when I found out that the notification had not been mailed out yet. Unfortunately like many of the smaller rural properties the value was not worth a court fight particularly as you are dependent on municipality for rezoning.
That goes beyond any discretion and a vacation is not extenuating circumstances, Too bad you had to play nice as that treasurer needed a good slap from the legal department . The problem is if you tried to force the sale, which you could have very easily. The treasurer would be screwed as both winners have very legitimate claims. Since they didnt get the letter , they hadnt failed in their responsibilities.
It would end up as the town lawyers voiding the entire sale and redoing it. A simple email would have forced the voiding of the whole sale
however You would not get the land and would have made an enemy for life and although councillors and Mayors change, the staff last forever
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can someone tell me please what exactly you pay when you win a tender? 20% down + tender + HST or 20% + tender + back taxes + HST? I don't understand the legal jargin!
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can someone tell me please what exactly you pay when you win a tender? 20% down + tender + HST or 20% + tender + back taxes + HST? I don't understand the legal jargin!
HST is, I believe, only payable on new construction and on commercial property. So you would pay the full amount of the tender less the deposit paid, plus any property taxes from the date of the tender to the date the deed is registered plus land transfer tax.
Of course if you have done your homework you would have paid out a couple of hundered bucks doing your searches etc.
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Thank you, I just wasn't sure if you paid the tender plus all taxes owing on the property. ;D
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You've already paid the downstroke, so you pay the balance of the tender, any accumulated taxes (since the date of advertisement, I think) plus land transfer tax plus registration fee. The accumulated taxes will amount to a few pennies up to some dollars, depending on the value of the property & location.
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My understanding is that you can only avoid the GST- now read HST on property transactions, if there is an existing residential unit on the property, or if it is a 'personal use property'...unfortunately the latter would require certification from the former owner, and Revenue Canada deems that in a forteiture the property is coming from the Municipality (I have this in writing), so that won't be available. All other properties (vacant land, commercial, industrial) is subject to HST, unless you vest it in the name of a Corporation that can purchase property with a exemption.
Silver lining in all of this is that if you purchase vacant land, and then build a house on it you will be able to include this cost in your total for the GST rebate (only available if your total cost is less than $450,000), and similarly it becomes part of your total cost bundle if you build for the recapture of 6% of the former PST (up to $24,000 available...up to $400,000 in total cost, nothing after that - they presume you can afford it).
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Frank, what you say may be correct but I can tell you for a fact that at least some municipalities are not charging HST on vacant land ;). As an aside, I believe that the municipality is responsible for registration of the tax deed so the purchaser does not have to pay the registration fee.
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Frank, what you say may be correct but I can tell you for a fact that at least some municipalities are not charging HST on vacant land ;). As an aside, I believe that the municipality is responsible for registration of the tax deed so the purchaser does not have to pay the registration fee.
I can confirm your assertion, and I have experienced it both ways (on vacant land), some municipalities are unaware that they are required (by Revenue Canada) to charge GST (now HST), and they don't do it. They will suffer the slings and arrows if they ever have a visit from a Receiver General auditor. I found out that it is in fact a requirement when I contested a prior sale in which a municipality was charging me.
Generally, for example, if you sell a cottage lot...let's say an acre, on which you planned to some day build a family cottage, and you camped on it twice each summer, and did some fishing, and put in a tool shed (otherwise known as a hard-tent), then you could declare this property to be a PUP (personal use property), and you could get away with not charging GST.
This was in fact the type of property I was purchasing through a tax sale, however the Municipality refused to accept that it was PUP by the delinquent tax-payer. Rev. Can. confirmed that in their view, even though the Municipality never became the formal owner, I was getting the property from them by way of a deed they were issuing (a forteiture sale, it is the same for forclosures), and therefore the Municipality was 'deemed' to be the owner and couldn't declare a PUP.
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Thanks for the information Frank. The source of your information, as well as your logic and reasoning, appears to be flawless. It is always a good day when I learn something new.
So bidders, to be on the safe side you should factor in another 13% on your bids to cover any HST.
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Frank, what you say may be correct but I can tell you for a fact that at least some municipalities are not charging HST on vacant land ;). As an aside, I believe that the municipality is responsible for registration of the tax deed so the purchaser does not have to pay the registration fee.
Generally, for example, if you sell a cottage lot...let's say an acre, on which you planned to some day build a family cottage, and you camped on it twice each summer, and did some fishing, and put in a tool shed (otherwise known as a hard-tent), then you could declare this property to be a PUP (personal use property), and you could get away with not charging GST.
A couple of exceptions. 1) if you have the fortune to buy a big piece of property the personal use is limited to I think it is about 1 hectare around the residence. You will pay HST on the remainder.
2) If you hare really successful like Frank you are deemed to be in the business of buying and selling land and have to charge HST. There is some debate if about how many properties you are allowed to sell before you are deemed to be in the land selling business. Some people say 2 and some 3.
Of course you can write off imput taxes.