TAMRMS#: B06
title
2019 Public Tax Sale
Presented by: Greg Dahlen, Senior Manager Assessment & Taxation
label
RECOMMENDATION(S)
recommendation
1. That the City Assessor be delegated the responsibility under section 419(a) of the Municipal Government Act to set a reserve bid for each parcel of land on the tax arrears list that is to be offered for sale at the April 26, 2019 public tax sale, with the condition that the City Assessor set the reserve bid as close as reasonably possible to the market value of each property.
2. That the Terms and Conditions of Sale, provided as an attachment to the March 4, 2019 agenda report entitled “2019 Public Tax Sale”, be approved.
body
PURPOSE OF REPORT
This report provides Council with an overview of the tax recovery process and the steps leading up to a possible tax sale on April 26, 2019, and also recommends that Council take certain mandatory steps in preparation for the tax sale.
ALIGNMENT TO COUNCIL DIRECTION OR MANDATORY STATUTORY PROVISION
The recommendations in the report arise from mandatory provisions in Section 419 of the Municipal Government Act.
BACKGROUND AND DISCUSSION
Municipalities are required to follow a statutory process, set out in Part 10, Divisions 8, 8.1 and 9 of the Municipal Government Act (“MGA”) to recover property taxes that remain unpaid after December 31 of the year in which the taxes are imposed (“tax arrears”). The tax recovery process is described in more detail in Attachment 1, and is summarized as follows:
• A property for which taxes are in arrears for more than one year is placed on a “tax arrears list” which leads to a tax recovery notification being placed on the Certificate of Title to the property.
• If the taxes remain in arrears until March 31 of the following year, the municipality must put the property up for sale by public auction.
• If the property is sold at the public auction the municipality receives as much of the sale proceeds as required to pay off the tax arrears, including penalties for late payment.
• If the property is not sold at public auction, the municipality has the option to acquire title to the property, free and clear of most financial encumbrances. The municipality may then sell the property provided that the sale price is as close as reasonably possible to market value.
• At any time through the process, until the date of the tax sale, the person liable to pay tax may settle the tax arrears or enter into an agreement with the municipality for payment over time.
Typically, property owners or their mortgage lenders will make arrangements to settle the tax account before it reaches the stage of public auction. However, the City must still make provisions for a public tax sale, should it be necessary. For each parcel that will go to auction if the tax arrears are not paid, Council must establish a reserve bid price as close as possible to market value (or delegate that task to the City Assessor) and also approve the terms and conditions of sale.
As of January 17, 2019, there remained 15 properties on the outstanding tax arrears list.
If required, the public auction is scheduled for 2:00 p.m. on April 26, 2019 in the Douglas Cardinal Boardroom of St. Albert Place. Terms and conditions of the sale are summarized in Attachment 2.
The parcels of land shown in Attachment 3, titled “2019 Tax Sale List”, will be offered for sale, unless taxes are paid in full or suitable payment arrangements are made.
STAKEHOLDER COMMUNICATIONS OR ENGAGEMENT
• Affected property owners have been sent arrears notices on a regular basis to inform them of the additional penalties being applied to their accounts and encouraging them to enter into payment arrangements to avoid tax sale proceedings.
• As per section 412 the MGA, affected property owners have been contacted by the City to notify them that they are part of the Tax Notification List.
• Affected property owners, and those parties having a registered interest as recorded on the land title document, will be sent notification of the impending tax sale per tax recovery legislation.
• Taxation staff work continuously up until the date of the tax sale, to contact and engage with affected property owners to encourage payment of the tax account in full or to make suitable payment arrangements.
IMPLICATIONS OF RECOMMENDATION(S)
Financial:
As of January 17, 2019, tax arrears on the 15 properties listed, amount to $326,000 rounded.
Legal / Risk:
Holding the public auction satisfies requirements of section 418 of the MGA. Section 419 of the MGA also requires that reserve bids and conditions of sale be established before the sale. Following the public auction process the City could, if it wished, obtain title to properties for which taxes are not paid and which were not sold at the auction.
Program or Service:
None at this time.
Organizational:
None at this time.
ALTERNATIVES AND IMPLICATIONS CONSIDERED
Since the provisions of s. 419 of the MGA concerning the establishment of reserve bid amounts and terms and conditions of sale are mandatory, no alternatives were considered.
Report Date: March 4, 2019
Author(s): Greg Dahlen
Committee/Department: Finance & Assessment
Chief Administrative Officer: Kevin Scoble