Cranberry Island final tender prices

[twinn]

Here is an excerpt from the local wiarton paper about the cranberry island lot sale.  These lots went for really cheap, if anyone on this board bid and won, congrats.  I did not bid on these properties, but they might have been a good deal for the right buyer.

Most of these lots were zoned SR shoreline residentiual and a few were Enviromentally protected.




Island lots go cheap


Wednesday June 07, 2006

Wiarton Echo — The sale of some lots on Cranberry Island off Oliphant has some councillors upset over the prices.
Councillor Pat Varley told the Echo the lots are worth far more than the town is selling them for.
In a vote of 5-4, council accepted a recommendation for Manager of Financial Services Pat Stock that council accept the following tenders for nine lots on Cranberry Island.
Plan 294 Lot 6
-One tender received for $2,500.
Plan 294 Lot 7
-One tender received for $1655.
Plan 294 Lot 8
-No tenders received.
Plan 294 Lot 9
-No tenders received.
Plan 294 Lot 18
-One tender received for $2,797.99.
Plan 294 Lot 20
-Four tenders received ranging from $1,600 to $2,505.
Plan 294 Lot 21
-Four tenders received ranging from $1,600. to $2,205
Plan 294 Lot 23
-Three tenders received ranging from $2,151 to $4,200.
Plan 294 Lot 24
-Three tenders received ranging from $2,151 to $4,200.
“I would recommend that Council accept the foregoing highest tender on each property. It may not be anywhere close to what we expected but the process was fair and competitive. It will yield $20,062 in revenue immediately and will also place seven properties back on the tax roll immediately. A couple of the properties may be built on very soon which could lead to additional tax revenue” Stock wrote in his recommendation.
The lots were advertised in area and Toronto newspapers and while unofficial estimates value them up to $30,000 each, (they are not shore lots) the actual appraisal price was not released to the public.
Councillors Pat Varley, Gwen Gilbert, Mark Wunderlich and Brian Fulford voted against accepting the highest tenders.

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[Frank]

Very interesting, I know that some small town municipal Council's will try to control the process, however it is really beyond their pervue. 

The act only requires that the minimum bid (back taxes) be obtained through the tax sale process.  If the Council was to try to cancel the sale because they don't think they got the best price, then a law suit will (should) follow.  They can only cancel the sale if it is not in the best interests of the Municipality.  Since they are not entitled to the excess proceeds, then the quantum of the sale is none of their business.  Surely they can't expect market value since this is not a normal market sale on which they (the town) can offer guarantees as to the condition of the property. 

On the other hand if there were no bids and the municipality was to assume ownership of the property, then the process becomes very different.  Following the vesting to the municipality they can declare it surplus and advertise it for sale as a piece of surplus municipal property and they can command a market value for it - with all the guarantees, etc.. that go along with it. 

The tax sale process is strictly buyer beware.   These guys need an education, I ran into the same kind of mentality in Parry Sound (MacDougal Township) two years ago and I won.

[Frank]

Ps.  If you had bid say $2,500 (and the minimum bid was to be $2,000), and they thought the property was worth $30,000 so they cancelled the sale cause they thought you were getting a steal.  You'd sue them for the difference between your bid and their own market value appraisal (subpoena it into court).  They would have to prove that it was in the Municipality's financial best interest to cancel the sale - which they can't, and they would lose.  You'd also sue for court costs, which would cover 60 to 70 % of your legal fees. You are now ahead about $25,000 which I don't believe would be subject to capital gains so it is actually better than if they did the correct thing in the first place.