Tax Sale Property Articles

[Rob]

Tax Sale Property Articles are now added.  Visit http://www.taxsaleproperty.org/Articles.html

If you wish to submit an article or know of an article then post the link in this forum thread or send a message to myself.

[Frank]

Hi Rob

Here is the full text of the Globe and Mail article regarding the 1 cent law suit that I told you about previously.  It highlights the importance of ensuring that your bid deposit is a full 20% of your tender amount - and nothing less.

Frank



The Globe and Mail
 
            A penny saved . . . is a cottage lost
            Math skills don't always seem important, but as a recent dispute
            over a vacation property shows, some battles are won by fractions



            By PAUL WALDIE


            UPDATED AT 9:02 AM EDT Saturday, Jun 5, 2004




                   
                    Advertisement


            Anyone who thinks a penny isn't worth much any more should meet
            Frank Carrocci.
            Mr. Carrocci has just won a legal battle over a vacation property
            near Parry Sound, Ont., that centred on one cent and whether
            fractions of a cent can be considered legal tender. His victory
            could set a precedent for municipalities everywhere and force people
            to do their math a little differently when they draw up tender and
            sale documents.
            "They tangled with the wrong guy. I'm stubborn and I know the law,"
            said Mr. Carrocci, who retired as director of revenue for the City
            of Hamilton last year. "I'm going to put up a sign there that says,
            'Frank's One-Penny Paradise.' "
            The saga started last January when the Municipality of McDougall,
            just north of Parry Sound, put the vacant lot up for sale because of
            tax arrears. It was a prime location, three-quarters of an acre of
            land along the shores of a small lake where cottages go for as much
            as $400,000.
            Mr. Carrocci, 52, sold his family's cottage last summer and was
            looking for a new vacation spot. He came across the auction and
            submitted a bid of $21,000 (the municipality had assessed the land
            at about $19,000).
            All bidders had to submit a deposit worth at least 20 per cent of
            their offer, and Mr. Carrocci sent in $5,000.
            The auction attracted about two dozen offers, and Mr. Carrocci
            discovered his was second-highest. The top bidder, whom the
            municipality won't name, offered $22,100.99 and put up a deposit of
            $4,420.19.
            Mr. Carrocci got out his calculator and discovered that his rival's
            deposit was one cent off the required 20 per cent. In fact, 20 per
            cent of $22,100.99 is $4,420.198. So he argued that under Ontario
            law, McDougall officials should have rounded that up to $4,420.20
            and disqualified the bid.
            Garfield Eaton, the treasurer of McDougall, disagreed. "I looked at
            the issue and I felt that the purpose of a deposit is to ensure that
            the person completes the transaction," Mr. Eaton recalled. "I didn't
            think that the difference of a .002 of a cent would have resulted in
            the highest bid defaulting on completing the transaction. So I
            accepted the highest bid."
            Mr. Carrocci took the town to court. "They decided that I'd probably
            walk away from it, I guess. But they hadn't met me before," he said.
            Mr. Carrocci's lawyer, Nicholas Roche, argued that the tax-sale
            rules under Ontario's Municipal Act are clear and "whether you are a
            penny short or a million short, it's still short."
            Martin James, a lawyer representing the township, argued that the
            deposit did not have to be rounded up because the Currency Act,
            which governs legal tender in Canada, recognizes only one-one
            hundredth of a dollar. The deposit technically should have been
            $4,420.198, but the town could recognize only $4,420.19 because the
            "8" is not part of the definition of legal tender.
            Mr. James also argued that "when you have two reasonable
            interpretations before you, you should opt for the one that
            maximizes the recovery in a forced-sale situation."
            But an Ontario Superior Court judge disagreed and threw out the
            higher bid. Under the Currency Act, "it was impossible for the
            person who submitted the highest tender to submit a deposit equal to
            20 per cent, given that that amount equals $4,420.198, a currency
            not recognized in law," Mr. Justice J. Stephen O'Neill said in his
            ruling. "Accordingly, in order to meet the mandatory provisions of
            [the Municipal Act regulations], the bid deposit had to be in the
            amount of at least $4,420.20, even if this meant that
            arithmetically, the bid deposit exceeded the sum of 20 per cent."
            Mr. Eaton said the municipality won't appeal and he is already
            preparing to hand over the land to Mr. Carrocci. But he said he "was
            disappointed that [the issue] wasn't looked at in a more logical
            position. I don't think the rules are that clear-cut that somebody
            should be saying, 'Well, if it's not 20 per cent you throw it out.'
            I think you need to look at it in terms of the purpose intended for
            the deposit."
            As for Mr. Carrocci, he hopes to have a cottage on the property
            soon, but he does have one concern. "I know when I go in for
            building permits, they are going to hassle me to death," he said
            with a laugh. "Especially when I have that sign out front."
            Paul Waldie is a Globe and Mail feature writer.


       
       © 2004 Bell Globemedia Publishing Inc. All Rights Reserved.

[Rob]

Thanks Frank for the article.  I put on the main site into the article rotation so people who don't come visit the forums have the option of seeing it.

It goes to show, always include the 20% tender amount.  And, if you come second or third in bidding for a property, you may still have a chance.