The sale of land for tax arrears by public tender (tax sale) is governed by the Municipal Act, 2001, S.O. 2001, c.25, including Ontario Regulation 181/03. A Municipality may recover unpaid property taxes through the sale of a property. By the time a property is eligible for tax sale, the property taxes are at least in their second year of arrears.
Tax sales are not typical real estate transactions. The Municipality is only interested in recovering unpaid taxes and is not obligated to obtain fair market value. Prior to considering participating in a tax sale, it is recommended that you seek independent legal advice from a lawyer licensed to practice in Ontario and in good standing with the Law Society of Upper Canada.
- The Municipality is not aware of the condition of a property being advertised for sale nor does the Municipality make any representation as to its condition. The Municipality does not provide a survey or reference plan for any parcel of land subject to a tax sale.
- The Municipality is not required to provide vacant possession of any properties which may be occupied and accordingly, the purchaser should contact their lawyer.
- The onus is on the tenderer to conduct his/her own inquiries into the characteristics and conditions of the property including zoning, access, work orders, water/hydro and other arrears, building restriction, title problems, liens, etc., each of which may survive the tax sale. The Municipality makes no representations whatsoever as to the quality and/or size of the land being purchased.
- Properties sold through the tax sale process are sold without warranty and are sold as is.
- The Municipality does not provide access to properties that are subject to a tax sale. The Municipality does not have a key to the property and is not in a position to provide one to the purchaser.
- The Municipality does not provide legal advice in respect of tax sales or any other matters.
Tax sales are conducted through a public tender process. Tenders must be submitted in a sealed envelope prior to the specified time using prescribed Form 7, Tender to Purchase as per the Municipal Act, 2001. The tender must include a deposit of at least 20% of the tendered amount in the form of a money order, bank draft, or cheque certified by a bank or trust corporation.
Tenders are opened in a public forum on the date and time advertised. Following the opening, the Municipality reviews all tenders for legislative compliance and determines the two highest qualified tenderers. Rejected tenders are returned by mail to the tenderer along with their deposit and reason for rejection.
The Municipality will notify the highest 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 highest tenderer should immediately retain a lawyer licensed to practice in Ontario and in good standing with the Law Society of Upper Canada. If the balance is not paid within the 14 days, the tenderer’s deposit is forfeited and the property is offered for sale in the same manner to the second highest qualified tenderer.
If there is no successful tenderer, the lands may vest to the Municipality.
The Municipality reserves the right to withdraw any property from the tax sale process at any time prior to registration of a tax deed without notice.