Liens

[common]

It would appear from some discussion that I have had with the Ministry of Consumer Services, that some liens on properties, other than those of the Crown, may remain on the property after a tax sale.
However, I am having some difficulty in getting some clarification on the situation. (Waiting for call backs from technical experts at the real property office of the Ministry)
In the meantime, does anyone else have any insight into this potential obstacle?
Cheers.

[Frank]

The Municipal Act states that:

 (7)  A tax deed or notice of vesting, when registered, vests in the person named in it or in the municipality, as the case may be, an estate in fee simple in the land, together with all rights, privileges and appurtenances and free from all estates and interests, subject only to,

     (a)   easements and restrictive covenants that run with the land;

    (b)   any estates and interests of the Crown in right of Canada or in right of Ontario other than an estate or interest acquired by the Crown in right of Ontario because of an escheat or forfeiture under the Business Corporations Act or the Corporations Act;

     (c)   any interest or title acquired by adverse possession by abutting landowners before the registration of the tax deed or notice of vesting.  2001, c. 25, s. 379 (7).



...an estate of the Crown can also rest in a lien by one of its agencies - such as a property which I once observed that was owned by a building contractor that had gone out of business, and he owed money to WSIB (that the Worker's Compensation Board), they put a lien on the property and it survived the tax sale, making the sucessful bidder responsible for paying it (he ended up walking from the sale and forfeiting his deposit).   In that case their lien was placed after the tax certificate was registered by the Municipality (but long before the date of the sale), but it didn't matter ... you can't pull the rug out from under the Queen (she's a tough old lady). 

 Literally, the crown can lien the property right up to the moment of a tax sale and you would be out of luck had you done your title search too far in advance.  I have never seen a case where a lien was registered between the sale and the registration of a tax deed, but I presume that the Municipality would  cancel the proceedings and refund the deposit (however nothing in law seems to force it...probably one for a judge to decide). 

[common]

Thanks for your input and insight Frank.
So you like myself, stand by our interpretation of 7 - 379,  of the Municipal Act.
Our interuption being that only Crown liens/claims remain with a property following a tax sale and all other liens/claims by private individuals and corporations are null and void, irregardless of their amount or interest.
Let's hope we are correct. I'm still waiting for the call back from the technical expert at the Ministry of Consumer Services - Title and Surveys office.
I'll let you know what they have to say.
Cheers.

[Frank]

The Ministry may be referring to its rights to the assets of a bankrupt or defunct corporation.  I believe that in that case they would likely be entitled to claim any excess proceeds of sale only - which of course the municipality will pay into court.  I did encounter a similar one several years ago, but because of significant tax arrears which exceeded the value of the property there were no bidders and the municipality ended up taking it and flipping it to 'white knight' (these are individuals who will buy a property for a buck with a promise to rehabilitate it - secured financially).  The Ministry, in that case, walked from their claim because of the environmental impairment of the property.

Let us know how this works out, if they stick to their guns on it, I would go after the municipality for return of your deposit (I am assuming that you were a successful bidder and that you are now hesitating on closing).  You won't get any quick answers from the Ministry, and hopefully the Municipality has agreed to extend the two week closing period to accomodate this question. 

[common]

Well I did indeed hear back from the Ministry this morning and again they simply quoted the Municipal Act subsection 7 which Frank kindly posted here yesterday.
It would therefore seem like all of the Ministry is not on the same page, since I was told earlier in the week by one employee at the Ministry that certain liens on tax sale properties could be carried over following the sale and that it would depend on the size of the lien.
Well again, not so according to the info. I received this a.m. from a technical expert at the Ministry - Titles and Surveys office.
Only federal and provincial government liens remain with the property.
This situation arose ironically with a sale taking place just about this time - 3:30 Wed., as I create this message.
It had to do with a property advertised in Caledon, I think it's about 44 or 49 acres. Taxes owning are about $21,900 more or less.
My search of the title indicated a lien of 2.5 million dollars (again more or less) registered against the owner, (a numbered Ontario Corp), and the property, in favour of Elliot Lake Pharmacy Limited.
It will be most interesting to find out what happens with this property.
Anyone that has or gets any info. I and I'm sure all other readers would be most interested in hearing about it.
Cheers

[angel]

I attended that tender meeting in Caledon at 3:00pm. The particular property with "writ" of 2.5M got redeemed at 1:00pm today, so the tender was cancelled.

[Tab]

When was that "writ" put on the property? I did a title search on Tuesday, and the 2.5 million wasn't there at that time. What would have happened with the writ to the successful bidder, had the owners not paid their taxes at 1:00pm that day? Also, I think that by looking at the title search these owners make a habit of doing this. They were in tax arrears in 1998 too and then it was cancelled in 01.

Speaking of "writs", can anyone clarify the "Sheriff's Sales of Lands" at public auctions? How do they decifer where the bidding number starts at? When you win the bid, the Sheriff uses that money to pay off the debts/liens, correct? The winning bidder does not have to pay the liens/debts as well as the bid amount right?

Thanks:)