Free Ontario Tax Sale Property Listings

Thursday, March 3, 2011

Property Doesn't Sell at a Tax Sale.... What Happens Next?

In this edition of our Company Blog we would like to address another common question we regularly receive from our members regarding tax sale properties.

What happens when a property doesn't sell at a Tax Sale?

After a failed tax sale the municipality has to make 1 of 3 major choices.

1. Re-Advertise the Tax Sale Property within 2 years

2. Vest the Tax Sale Property into the municipality
3. To do nothing within the 2 year time period which would result in the tax arrears certificate being deemed to be cancelled, at which point the tax registration and tax sale proceedings must be started from again from the beginning.

What are some reasons a tax sale may fail?

When no tenders or bids are received it results in a failed tax sale.  The main reason for this is Property Condition vs. Property Value.
For instance there have been numerous old gas stations, workshops, industrial complexes and many other properties for sale in the past that for most individuals will sound the warning bells for an extremely risky investment.

The first question that comes to mind in regard to the above property is... are they contaminated?
The second question is if these properties are contaminated, how much is it going to cost to perform a cleanup of this property?

The other most common reason for a failed tax sale is that the minimum tender amount is more than the assessed value of the property, at this point the successful sale may seem bleak, though it is still possible for the property to sell; As a matter of fact in the past there have been a handful of properties purchased for more than the assessed value.

There are several great deals in respect to tax sale properties, but like anything else there is a darker side to things as well, some other reasons for a failed tax sale may include, 
  • The property is landlocked or inaccessible
  • There are interests that will affect the property after a tax sale
  • The land is vacant and building permits are not available
There are many reasons in addition to those just mentioned that will defer interest from investors.

Always consider the pro's vs. the cons, many times a property will appear to be an investment opportunity of a life time, but after a little bit of research you may come to realize the property may not be as great as it seemed to be at the previous glance.  The property could be crawling with crown liens, landlocked, contaminated and much more, it is strongly recommended that potential purchasers research these properties as thoroughly as possible before submitting a tender or bid.


What are Targeted Tax Sale Tips?

Targeted Tax Sale Tips are sent weekly with our ' - Upcoming Tax Sales' newsletter and posted frequently in our 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!

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