Tax Sales

What is a Tax Sale and how does it work?

A Tax Arrears Certificate is registered if property taxes are not paid for two years prior to January 1st of any year, as authorized under the Municipal Act. A Tax Arrears Certificate indicates that the property will be sold if all the taxes, penalties, interest and reasonable costs incurred by the Town are not paid within one year of registration of the certificate. This amount is referred to as the cancellation price. Once a certificate has been registered, partial payments cannot be accepted, but before the expiry of the one year, a municipality may authorize an extension agreement.

The Town may advertise the property for sale for non-payment of taxes if the cancellation price is not paid within one year of registration of the certificate. The advertisement would be published in a local paper for four consecutive weeks and the Ontario Gazette for one week.

Eligible bids must be at least equal to the advertised minimum, which would include all outstanding taxes, interest, and costs if applicable. Using forms provided by the Tax Office, the bid plus a certified cheque for 20% of the tendered amount must be submitted in a sealed envelope before the specified due date.

From the day of notification to the highest bidder, the bidder has 14 days to complete the transaction. All properties sold for non-payment of taxes are sold as is, without warranty.

Why is the Municipality selling these properties?

As per provincial legislation, a municipality may recover unpaid property taxes through the sale of the property. By the time a property is eligible for tax sale the property taxes are at least in their third year of arrears.

Can I really buy a property so cheaply?

Can the Municipality recommend a lawyer for this purpose?

What does "Cancellation Price" mean?

An amount equal to all tax arrears owing at any time in respect of land together with all current real property taxes owing, interest, penalties thereon, other land-related costs (such as unpaid water or sewer charges) and all reasonable costs incurred by the Municipality after the Treasurer becomes entitled to register a Tax Arrears Certificate under Section 371 of the Municipal Act, 2001.

Up to what point can the owner pay the taxes and avoid the sale?

The owner can pay the "cancellation price" at any time up to the point in which the property is either transferred to the successful tenderer or vested to the Municipality due to a failed tax sale.

How would I determine if there is a mortgage or any liens against the property?

It is the responsibility of the tenderer to search title at their expense. 

For information on title searches, contact the Lambton Land Registry (No. 25) Land Registry Office

Phone: 519-337-2393

Searches can be done online at www.onland.ca 

Am I able to view and/or tour the property?

The Municipality cannot provide access to view or tour the property. Access without authorization from the owner of the property is considered trespassing.

Who is the legal owner of the property during the tax sale process?

Legal title does not change until a successful purchase occurs or the property becomes vested (usually only if there are no eligible bids received and only if the Municipality decides to take the property into its possession). 

What if the property is occupied?

The Municipality does not guarantee vacant possession. Please contact a lawyer licensed to practice in Ontario and in good standing with the Law Society of Upper Canada.

What are the annual utility costs?

The Municipality does not have this information.

What other costs are payable to the Municipality if I am the Purchaser?

The Purchaser is responsible for payment of any additional taxes, charges, penalties and interest that may be owing subsequent to the property being advertised for sale. In addition, the successful tenderer is responsible for the land transfer taxes, registration fees and HST, if applicable.

If I am not the highest tenderer, do I receive my deposit cheque back at the tender opening?

No deposit cheques will be released at the tender opening under any circumstances. Deposit cheques of unsuccessful tenderers will be available for pick up at a later date or returned by courier.

My tender submitted is much lower than the others - why may I not receive my deposit cheque back at the tender opening?

The Municipality must review all tenders for compliance with the requirements of the legislation and Municipal processes following the public opening. The highest tender may not be the successful tender. Tenders can be rejected for a variety of reasons including noncompliance with the legislation. Lower tenders may be considered.

Can I pick up my deposit cheque?

Deposit cheques will be returned by mail or courier.

When will I know if I am the successful tenderer?

The successful tenderer will be notified by registered mail within one (1) week following the public sale. The Municipality will notify the tenderer of the balance to be paid in order for the tenderer to be declared the successful purchaser. The balance due must be paid in full within 14 calendar days of the mailing date of the notice. Upon receiving notification, the successful tenderer should immediately retain a lawyer licensed to practice in Ontario and in good standing with the Law Society of Upper Canada.

What happens if the successful tenderer does not follow through?

The successful tenderer's deposit is forfeited and the land is offered to the second highest qualified tenderer who has 14 calendar days from being notified by registered mail to pay the balance owing.

How do I get keys for the property?

The Municipality does not have a key to the property and is not responsible to provide one to the purchaser.

What happens if the property fetches more than the cancellation price? 

What happens to the extra money?  What about other parties that might have an interest in the property (i.e lienholders, creditors)?

Any monies received as part of the tender that are not required to clear the cancellation price are returned to the courts. Parties who have a claim may be able to apply to the court to access these residual monies to cover their loan or other interest.

What happens to the property if the Municipality does not receive any tenders?

The Municipality has two years from the date of the failed tax sale to vest the property to the Municipality or re-advertise the property for sale.

How long does the tax sale process take?

The tax sale process is initiated by the registration of a tax arrears certificate in the land registry office. In the event the cancellation price is not paid before the expiry of the one-year redemption period, these properties can be disposed of by either public auction or public tender. Advertisements are published in the local newspapers for four consecutive weeks and the Ontario Gazette for one week.

What is the property assessed for and/or what are the annual property taxes?

Assessment values are available by viewing the tax roll ledgers at the Municipal office and are included in the tax sale advertisement. Normally, staff are not available to assist with the roll books, but the books are available for public viewing and are organized by roll number. Assessed values are provided in the roll book, along with specific property details such as size, zoning, etc. To determine annual taxes, you can multiply the assessed values by the appropriate tax rates - tax rates are available on the Municipality's website.

What are the annual water and/or sewer costs?

Water bills are generated quarterly and consist of the unit allocation cost plus usage costs. The current approved water and sewer rates can be found on the Municipality's website. 

What are the zoning and planning opportunities and limitations that exist for this parcel?

The Municipality cannot comment on specific opportunities. We recommend that a planner be engaged to discuss this type of question. Our Zoning By-law and Official Plan can be viewed on the Municipality's website.