Tax Sale property Experiences

[Rob]

This forum is for members to share their experiences purchasing a tax sale property

[TLCCanada]

I have been very successfully investing in Tax liens/Tax deeds in USA. Now I want to enter Canada opportunities to startwith.
I have theoritically studied the Canadian system. Need assistance and partner for mutual benefit.
ROGER

[kivi]

First time experience with a tax sale property:  I entered a bid for a property that I found here [url]http://www.taxsaleproperty.org/Tax-Sale-Ontario-14-May-2005.html

I attended the bid opening and there were 65 bids for the property with a winning bid of $100,001.00 (my bid was not even close ) . Reserve was about $11,000. Many bids below $25,000. Perhaps a dozen or so between 25-60K. Two bids above that ..one for 86K, and the winning bid for 100K.

I happened to sit close to the folks opening the bids..so that is how I managed to hear many of the amounts bid.

[danielmryan]

I found this out recently. The municipality to which I had sent a bid informed me just recently that they cancelled the sale of the property in question because it was "not in the financial interest of the municipality to continue with the proceedings of the tax sale." The underlying authorization of and for this decision, as stated in the cancellation letter from the municipality, came from Section 382, subsection 6 of the Municipal Act.



Voidable proceedings

382...


Treasurer may halt proceedings

      (6)  The treasurer may register a cancellation certificate if, in his or her opinion,

         (a)    it is not in the financial interests of the municipality to continue with proceedings under this Part;


 
This is what is says, folks - so if you're hoping to snap up a property at a ridiculously low price relative to its present assessed value, be aware that the deal is voidable by the selling municipality right up to the point where a formal offer to the winning bidder is extended, on the grounds specified above. That right is part of the Municipal Act, and the way it is worded makes "a high bid which is too low" an entirely legitimate reason for refusing to proceed with the sale.

[Frank]

That is not quite right.  A Treasurer is under no obligation to obtain the highest or best price for a property, and providing that he receives bids that meet the minimum bid price, then he must award the sale to the highest biddeer - even if it only meets the minimum bid.  He does not have the discretion to cancel the sale because he feels that the successful bidder has obtain too much of a winfall. 

Section 382 of the act is usually used when the previous owner comes forward with the amount of taxes outstanding and wishes to redeem the property.  In the past Treasurers have interpreted that this can be done any-time up to the point of opening the bids at a tax sale.  However, in a recent court case between Cunningham and the Township of Front of Yonge the judge declared that the Treasurer actually had an obligation to use this discretion up to the point that the new tax deed is actually registered to the successful bidder at tax sale.

http://www.canlii.org/on/cas/onca/2004/2004onca11393.html

The outcome of all of this is essentially that if you are the successful bidder on a tax sale, then you should make it your job to get the balance of money owing over to the Treasurer ASAP after the sale to ensure that there is no delay in the process - since this would provide a larger window of opportunity for the previous owner to wake up to their predicament and take action to thwart your purchase of his property.


note:  to be politically correct, wherever I have used he, his, or him above, you can also insert she, her or hers.

[mushroom]

Hello all. Interesting web site. This can be a valuable resource for the beginner and experienced tax arrears purchaser. I'm hoping to gain some advice and learn from other peoples experiences. Firstly searching for title and liens on a property is relatively easy and is inexpensive. I have attempted a few tenders on my own, with out any results.  I have made tender bids on properties in Gravenhurst, Township of Georgian Bay,  Township Of Minden Hills and township of Mcmurrich/Montieth. I am a conservative bider, a few properties I have made a more serious bid, my strategy is hoping to "luck out" and win a tender.  Seams that I'm way off! One instance of a property in Gravenhurst tendered out for $93037! The next highest bid was $92000. The property was only assessed at $42000! Minimum tender amount was $6860. My question is what did I miss? mind you I have bid-ed with out visiting the property, it was vacant land, not even on a lake. Another example one property in the Township Of Georgian Bay was tendered out for $15002!  Do we have "teams" of people, lawyers and re-estate agents out there making bids? Tenders are in sealed envelopes, whats going on with these winning tender amounts? Forgive me people for my spelling I'm a slave to spell check. Any advice and previous experiences I'd love to hear from you.
Robert aka mushroom

[sloth]

Robert,

The property in Gravenhurst that went for $93,037 was vacant land, but it had a view of the water and was also deeded part of a 'common area', with a large dock and tennis courts.  Below is a link to a cottage for rent that is about 3 properties over from the one that was sold.  I had bid on the property, but was a fair bit below the 93k mark.  nice property, high and dry with a fairly good view

http://www.cottageholidays.ca/cottage-397.html


Do you know what the properties in McMurrich went for?  I was interested in the 100acres with road frontage, but it got redeemend.

Tim

[mushroom]

Robert,

The property in Gravenhurst that went for $93,037 was vacant land, but it had a view of the water and was also deeded part of a 'common area', with a large dock and tennis courts.  Below is a link to a cottage for rent that is about 3 properties over from the one that was sold.  I had bid on the property, but was a fair bit below the 93k mark.  nice property, high and dry with a fairly good view

http://www.cottageholidays.ca/cottage-397.html


Do you know what the properties in McMurrich went for?  I was interested in the 100acres with road frontage, but it got redeemend.

Tim

Hi Tim Thanks for the reply to my posting.  I placed a bid on the two 100 ac properties in Mcmurrich. The Property on the year-round road was canceled before the tender date. It was actually a "corner lot" bounded by Fourth Ave and Yearly Road. And it was Assessed for $28000. The second 100 ac property was tendered out for $40500 with about fifty tenders submitted, the Township told me the property was assessed for $48500. It is located at the end of seasonal Appleyard Road. Interesty the second property was purchased way back in 1917 for tax arrears of $26.17! I remember driving on highway 518 to Sprucedale from Parry Sound, the highway was completely snowcovered, thank goodness I had 4 wheel drive, the highway was very twisty, it was a fun drive, the only wildlife I seen was two hunters. Very nice country up there and if I was to win one of those tenders I was tempted just to keep the land for my self rather than sell it for profit. Those were the only properties that I bid on, there were two other smaller properties that I didn't bid on and and I don't have any thing to tell you about.
Tim Thanks for the link on your reply. In the aerial photo, was the property that was tendered. Very nice, It makes more since now the winning bid of $93037. Tim; one question about the Gravenhurst property: Where did you find the information about deeded "common Area"? Was the property part of a condominium arrangement? Maybe it was something I over looked. That information could be very useful to me since I'm still fairly novice at this, and I wanna make sure all bases are covered.
Thanks again Tim and good luck with the next bid.
Robert

[Frank]

Good morning Rob

I can't help but send something in on the Gravenhurst property, since mine was the winning bid.  My wife wanted to bid $83m and I wanted to go #93m (I figured it would go for around $110 since the property two over from it - similar - is for sale for $169m).  I know the lake and have friends on it, therefore I was extra motivated on it.  Assessments are low since it is considered a backlot, but for $200 bucks a year into a co-operative which owns and maintains a tennis court and large dock for property owners' use it is really a water-front lot (you have to know the area to understand).  Great fishing in this lake as it is connected to the Severn. 

Anyhow, we stopped at the casino on the way in order to settle our dispute over the bid amount.  I placed $20 in a machine, if I lost it then my wife's bid amount went in, if I won then mine would be it.  I came out $37.75 richer and therefore included it in my bid amount.  Hokey, but it worked.  There is no real answer to how much to bid, just don't go over what the property is really worth, or you lose anyways even if you get it.

Better luck next time, remember 'go big or stay home'.  Ironically, that said, there were two properties that went for minimum bid amounts since there were no other bids. 

Frank

[mushroom]

Good morning Rob

I can't help but send something in on the Gravenhurst property, since mine was the winning bid.  My wife wanted to bid $83m and I wanted to go #93m (I figured it would go for around $110 since the property two over from it - similar - is for sale for $169m).  I know the lake and have friends on it, therefore I was extra motivated on it.  Assessments are low since it is considered a backlot, but for $200 bucks a year into a co-operative which owns and maintains a tennis court and large dock for property owners' use it is really a water-front lot (you have to know the area to understand).  Great fishing in this lake as it is connected to the Severn.  

Anyhow, we stopped at the casino on the way in order to settle our dispute over the bid amount.  I placed $20 in a machine, if I lost it then my wife's bid amount went in, if I won then mine would be it.  I came out $37.75 richer and therefore included it in my bid amount.  Hokey, but it worked.  There is no real answer to how much to bid, just don't go over what the property is really worth, or you lose anyways even if you get it.

Better luck next time, remember 'go big or stay home'.  Ironically, that said, there were two properties that went for minimum bid amounts since there were no other bids.  

Frank

Congagulatons Frank  and thanks for the interesting and humous reply back. Good thing you won at the casino that day. I can see now motavation plays a huge part in placing bids as in your case, and of course doing your home work, on the real-estate market in the area.
Enjoy the property Frank
Robert

[twinn]

Hi to everyone on this forum.  Good luck with that Gravenhurst property, I also bid on that property, but I was'nt even in the running.  I figured that anyone that bid that amount must have known something that I did not.  Ironically enough, it was after I had done all of my research that I stumbled onto this forum- wish I would have found it sooner..  Thanks to Frank for providing some really good posts and info. 

[Topwater]

Congrat Frank, I went checkout that property, It is very nice piece of waterfront land, my guss the winning bid should be over 60000, so it is too much for me. But 90k definiately worth it. Enjoy.

[Frank]

This is another caution to everyone to do your homework. 

I looked at the sale now on by Greater Madawaska.  Their site directs you to the Ontario Gazette, and it directs you to OntarioTaxSales.ca (one of those pay sites).  The information on that site indicated that tender 04-02 was 19 acres on a road and on a small lake.  My curiosity was peaked.  I e-mailed the Township administrator for copies of maps, zoning, etc., and when I got the info. from him it clearly indicated that the property was 'not' on a road (the site has now been changed to remove this) - I won't waste my time going there to see it. 

Had I not done the research I would have wasted a day and lots of gas to go and find the property, or worse yet I might have bid on it (site unseen) on the basis of this mis-information and been burned severely. 

Bottom line, do your homework - trust no one.

[Logical]

HI everyone. I just have a question. I wanted to know why a municipality would put up a piece of land for sale and in the explanation it says "not developable".
We drove all the way to trenthills a few months back only to see the print out of the advertised properties, most of them said..not developable.

Any info on that, as well as can anyone explain the various zoning abreviations, would be greatly appreciated.

[Frank]

Zoning abbreviations can vary from one Municipality to another, however, they are fairly standard.  You need to get a copy of the Zoning and Official Plan documents which pertain to the property you are looking at - these are usually supplied by the municipality along with its information package.  Many will note right in their advertisements that the property is undevelopable, environmentally impaired, or even possibly contaminated to cut down the number of inquiries.  In many cases these are useless pieces of land which is precisely why they are up for sale - the previous owner has tired of not being able to do anything with it or being able to sell it to anyone and has walked away.

Before you make the long trip to where-ever it is you want to look for property, you should get a copy of the information package mailed or faxed (or e-mailed to you), a simple phone call can also provide you with the answers you need and you can save your gas (and time - although I'm sure you enjoyed the scenic trip).