Free Ontario Tax Sale Property Listings

Wednesday, February 16, 2011

Buyer Beware - Purchasing Tax Sale Property - Part 4 of 4

In this edition of our Company Blog we are going to discuss the fourth and final part of our four part newsletter special regarding the importance of researching your property of interest (POI) and just a few of the less common risks associated with purchasing tax sale property

As many of you already know there are many risks associated with purchasing any property.  In this 4 part article we will point out a few of the obvious risks involved, and a few of the precautions you can take to lessen the risks you face when purchasing tax sale property.

Please take a moment to read the helpful information below.


Vacant Possession
When purchasing tax sale property it is important to be aware that the municipality is not responsible for providing vacant possession.  This means if you purchase tax sale property and there are individuals living there, it is your responsibility to take whatever steps are required by law to have the premises cleared.  Depending on what steps you take this can be expensive, for example hiring a baliff may cost a substantial amount of your hard earned money.

Easements & Restrictive Covenants
We spoke briefly about this topic in a previous newsletter but believe it would be beneficial to discuss these both in more detail.

The simple definition of an Easement is "The right to use the Real Property of another without possessing it." 
Easements typically "run with the land" and are enforceable on subsequent buyers of the property.  A very common type of Easement is a "Right-of-Way", this is the right to use another's real property to access another point of interest for example a private beach or private road.  All of this sounds great right? Well, there's more!

You may have heard the term Easement before, but are you aware of the term Restrictive Covenant?

The quick definition of a Restrictive Covenant is
a type of legal obligation usually imposed in a deed of sale with regard to the property owner having to either do or not do something. Such restrictions "run with the land" and similar to Easements, they are to enforceable on subsequent buyers of the property.

Restrictive Covenants are typically of a preventative nature and are put in place to keep property owners from making certain changes to their land, home, such things as preventing the parking or storage of boats and trailers in your driveway or in some cases even the colour of your garage.

There are several different types of Easements and Restrictive Covenants and both terms have fairly broad meanings. 
Easements and Restrictive Covenants can sometimes significantly affect the use of your property.

Always make sure you understand the specifications of these important contributing factors. 
Both Easements and Restrictive Covenants are generally registered against title and in the event one appears on the title of a property that interests you, failing to take the necessary steps in researching the registrations and the underlying details may leave you finding that you have just purchased something you didn't want.

Structural Encroachments
The simple definition of an encroachment is as follows.

1: An Act or Instance of Encroaching
2: Something (as a structure) that encroaches on another's land
There are many different instances when dealing with potential encroachments. Some examples of an actual structure that may encroach on anothers land could be a tree, bush, walkway, deck, stoop, garage, fence, part of a home and many others.

For example, if you were to purchase property and the detached garage was encroaching on to anothers property, you may find your self responsible for the removal of the garage and all associated costs with doing so.

A Common Misunderstanding

Many individuals interested in purchasing tax sale property may think that once you are selected as the Highest Tenderer the property is yours.  Unfortunately this is not at all the case. In fact, even after you have been selected the highest tenderer and you have paid the remaining balance of your submitted tender, you are still not the rightful owner of the property. At any time prior to the actual registration of the tax deed, the owner or others with a registered interest in the property may come in and pay the cancellation price and redeem the property.

Only at the very moment the Tax Deed is registered is the property legally yours.
If selected as the highest tenderer it is always a good idea to pay the remaining balance of your tender and have your tax deed registered as soon as you possibly can.  This is common practice and is done to help avoid the property being redeemed before the tax deed is registered.


Take as many precautions as possible to protect your interests throughout the tax sale purchasing process.

What are Targeted Tax Sale Tips?

Targeted Tax Sale Tips are sent weekly with our ' - Upcoming Tax Sales' newsletter and Company Blog.

Each week the topic will vary from simple tax sale do's and don'ts, to in depth detailed information regarding legislation and much more!

1 comment:

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