Surplus Funds

[David1010]

So I've been reading the Execution Act.

http://www.e-laws.gov.on.ca/html/statutes/english/elaws_statutes_90e24_e.htm#BK17

I have a couple of question that I haven't been able to figure out the answers.

If at a Sheriff's auction the sale of the property is in excess of the dept, what happens to the surplus?

If at a Sheriff's auction the sale of the property is less than the dept, does the writ (crown) carry forward on the title the same way it does in a tax sale?

The act is so not plain English that I could not find any answers to either.

[netpred]

So I've been reading the Execution Act.

http://www.e-laws.gov.on.ca/html/statutes/english/elaws_statutes_90e24_e.htm#BK17

I have a couple of question that I haven't been able to figure out the answers.

If at a Sheriff's auction the sale of the property is in excess of the dept, what happens to the surplus?

If at a Sheriff's auction the sale of the property is less than the dept, does the writ (crown) carry forward on the title the same way it does in a tax sale?

The act is so not plain English that I could not find any answers to either.

[g2020]

Netpred once again does a wonderful job of claifying the issues. Yes, most importantly you need to have a very competent lawyer working with you. It is my experience that if the bids have not reached the amount owing to the creditor that has initiated the sale then the sherriff and the creditor will have a little huddle. The creditor may at that point accept the highest bid. However, the bidding is often reopened and they try to get more. The bidding may be reopened several times. If the creditor is still not satisfied then the sale is cancelled.
Back to Netpred's point about a good lawyer. The most dangerous thing about a sherriff's sale is that the sherriff may only be selling a partial interest in a property as in the case of a property owned by a husband and wife. Do you really want to own a half interest in a home with someone elses wife? I stopped going to Sheriff's sales because I was bidding against those who either did not understand that they were only buying a partial interest, or that other liens of mortgages would remain against the property, as do crown liens, crown mortgages, liens of crown corporations, and mortgages of crown corporations such as the Business Development Bank (BDB) and CMHC in Tax Sales. I suspect that most of the readers of this blog have no idea what a tax deed is subject to based upon the ridiculously high Tax Sale bids that I saw last year on properties with remnant crown interests and restrictive covenants.
Tax sales have become a lot like sherriff's sales - you cannot make money any more because you will be bidding against inexperienced bidders that just do not understand.
One more point dave1010. I appreciate the clues that you gave me as I try to learn more about mapping tools and I suspect that you are a very bright young person, but pick either Sherriff's sales or Treasure's sales, not both. If you decide to start with Sherriff's sales since it is not such a crowded field then always ask the Sherriff for a mortgage statement, or lien statement, from the creditors whose interests will remain. The Sherriff will often not volunteer this information. If the sherriff does not have this information then get the hell out of there and find another sale. You will soon find the counties to avoid.

[Dave2]

Netpred once again does a wonderful job of claifying the issues. Yes, most importantly you need to have a very competent lawyer working with you.

I suspect that most of the readers of this blog have no idea what a tax deed is subject to based upon the ridiculously high Tax Sale bids that I saw last year on properties with remnant crown interests and restrictive covenants.
Tax sales have become a lot like sherriff's sales - you cannot make money any more because you will be bidding against inexperienced bidders that just do not understand.

One more point dave1010. I appreciate the clues that you gave me as I try to learn more about mapping tools and I suspect that you are a very bright young person, but pick either Sherriff's sales or Treasure's sales, not both.

G2020:

I would like to support your post about risk by relating an event which happened to me yesterday.  You said it best in an earlier post that people have to realize that there is a reason for a property to be on a tax sale," There is a problem with the property or the owner"

In my case we have the continuing saga of what I referred to in earlier posts of buying a tax sale property with a "contaminated title."  This has been the saga of earlier posts and the subject of much dialogue via private messenger at senior level most of which I canot post in the public domain.  Quoting Netpred in one of the PM's he said it best as is typical with the high quality of his posts both private and public:

"Very complicated. More complicated that any other legal tax issue that I have ever heard of or researched"  

I even posted a picture to illustrate the situation I felt I was  in (see below) earlier last fall. While since that picture things have got (much ) worse.

The legal research has gone back to the founding of the township in 1819 and I believe the underlying problem dates from that era.  Could I have protected myself against this; not that I could see.  I mean who would have thought of a problem of a boundary issue next to a road allowance.  Things first went off the rails when I lost a bet with my neighbour that cost me a bottle of Glennfidich scotch (Netpred don't get ideas; even if Rabbie Burns day is coming up.)

It culminated in a meeting with my lawyer yesterday in which we reviewed this situation among others.  My boss was with me although she reminds me that this was MY purchase and unlike this guy   I am not smart enough to avoid these problems with my significant other.  Most of the discussion is obviously private but one sentence says it all, " Do I write it off "  

And yes there has been discussion about whom I should ...... to recover my losses but next time read VERY carefully the legal disclaimers with a tax sale.  Good luck.  Bottom line there is real risk here and you ignore it at your peril.  If you are not prepared to stomach it you don't belong here.

On the other hand if you play it right things might also work out.  It has been a wild last month with swings of good and bad for me and that is how I tried to handle it with my boss, "Do you want the good news or the bad news?"

I mean who has heard of a Revenue Canada audit where if you lose you save more then $10,000?  go figure  

[David1010]

Thanks guys for the input.

G2020, I was more curious than interested when it comes to Sheriff's sales.  Just for the shadowy nature that appears to be attached to a Sheriff sale I wasn't planning on going there.  I'm just trying to understand the basic rules.

I don't know if anyone looked at that link to the Execution Act, but wow, even though there are 2010 amendments pending, it still reads like some strange old English Shakespearian script.  (Or maybe something from Robin Hood, Sheriff of Nottingham?)

Interesting that the auction price may not be binding on the seller.  Netpred I get that a lot of ugly ooze survives after the auction.  I still don't get what happens with a surplus.

Let's use a really clean example, the property has no mortgages, no liens etc., free and clear, except for the one exception, the execution writ (right term?).  The property sells at auction for $175K, but the debtor only owed $100K.  What happens to the surplus $75K?

Dave2 my sympathies go out to you, I've only caught a bit of the storyline.  I hope I never find myself in that kind of position.  Perhaps a judicial decision is required to void the sale?

These stories beg the question of who is ultimately is responsible.  I looked at a beautiful cottaging property a year ago.  All the naysayers reasons didn't bother me, isolation, no electricity, future water levels, age and condition, etc.  What stopped me was the parcel was inside a provincial park (freehold), MNR showed the lot lines in a different place than the township showed the lot lines (by almost 100%), the cabin itself appeared to be further out of bounds in another direction, but mostly with the township. A copy of the original survey placed it (the land, more or less) with the MNR.  I learned from the MNR in this case, unlike crown land, with a provincial park there is no mechanism to allow the purchase of the overlap.  I was told, bluntly, that if that cabin (or dock) is on park property its part of the park.  In the end it would have been my money gone, well mostly gone.  Would the original owner or the realtor have been responsible, probably not as they're hiding behind the "as-is, where-is" statement.  What about the lawyers, probably not as they're hiding behind the "to the best of my knowledge" statement.  Though a township wasn't involved, their use of blanket disclaimers in tax sales, to relieve them from any responsibility is questionable at the minimum.
   
Anyway I'm ranting again.

[David1010]

I'm certainly listening to everyones advice, and paying attention to their situations.

As yet I haven't spent anything more than the money for title searches, and my own time.  I may never actually get involved, but I'm learning a lot about properties, sales, valuations and legal situations.  I consider this valuable, because being able to recognize and understand situations, I'm less at the mercy of chance.

For me this still an educational process, so I need to ask questions.