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Tax Sale Tips & Tricks - Learn 1 Tip at a Time!


Here you will be able to learn about many of the common aspects of buying tax sale properties in Ontario.

Below is an extensive list of commonly asked questions relating to the sale
of Ontario Tax Sale Properties. Click any of the following questions to jump to the corresponding answer.



Is it really that important to make sure title is clear prior to bidding?

What happens to mortgages or liens registered on property I purchase at a tax sale?

What does “In favour of the crown” mean?


What are examples of an interest that would constitute an 'Interest in favour of the crown'?

What are some risks associated with buying property that has interests in favour of the crown?

Is there anything else that isn't removed from title if I purchase property at a tax sale?

What is a restrictive covenant?


What is an easement?


What is adverse possession?


How can I find out about crown interests and other interests that could be registered on title?

What is a title search and why do I need one?


What is an execution search and why do I need one?


What is an “execution”?


What is an "execution creditor”?


What does “subject to execution if enforceable” mean?


What is an updated title search report and why is this a good idea?


Where do I get a title search report or an updated title search report?


How do I withdraw my tender?


What if I miss the deadline to pay the remaining balance of my submited tender?

What is land transfer tax?


How do I calculate land transfer tax?


What are accumulated taxes?


What is HST?


What is a commissioner for taking oaths?


Where can I find a commissioner for taking oaths?


What is a public notary?

 

Can't find the answer you're looking for? Email you question to Info@Tri-Target.com

 

Is it really that important to make sure title is clear prior to bidding?

Yes, when submitting a tender on a Tax Sale property it is extremely important to ensure that title is clear and there are no interests in favour of the Crown or any other interests that will continue to affect the property after the tax sale.

It is the ultimate buyer beware scenario, these properties come as-is; always remember to do your due diligence to ensure your best interests are always at hand.


What happens to mortgages or liens registered on property I purchase at a tax sale?

When a Property is sold at a Tax Sale most all encumbrances for example; mortgages are eliminated.

**Except for mortgages or liens that are in favour of the crown, these stay o title regardless of a tax sale.


What does “In favour of the crown” mean?

"In favour of the Crown" means in favour of the provinical or federal government.


What are examples of an interest that would constitute an 'Interest in favour of the crown'?


Some common examples of "In favour of the Crown" could be as follows,

  • Minister of Finance
  • Canada Revenue Agency
  • Revenue Canada
  • Farm Credit Corporation
  • Income Tax Act
  • Business Development Bank
  • Federal Business Development Bank
  • Director Family Support Plan

There are several different types of interests that may constitute an interest "In favour of the Crown". This is only a handful of common Crown interests, there ARE more.



What are some risks associated with buying property that has interests in favour of the crown?


If you were to purchase property with a Crown Lien it would be advisable to make sure you have enough money to pay the amount owing to the Crown prior to submitting a tender etc.

The Crown should not be able force you to pay the amounts owing, however they can seize and sell the property you just bought in order to recover the amount owing to them.

 

Is there anything else that isn't removed from title if I purchase property at a tax sale?

Yes, Some things that may stay after a tax sale are Restrictive Covenants, Easements and Adverse Possession will remain on title regardless of a Tax Sale.

 

What is a restrictive covenant?

Restrictive Covenants are a legal obligation imposed in a deed by the seller upon the buyer of real estate to not to do something. Such restrictions frequently run with the land and are enforceable on subsequent buyers of the property.

Restrictive Covenants may arise from many sources, and may be registered against title.

Some Restrictive Covenants exist for safety purposes, such as a Restrictive Covenant forbidding the construction of tall structure in the general vicinity of an airport or a Restrictive Covenant restricting the height of fences on corner lots (to avoid interference with drivers' sight lines).

Covenants may restrict everything from the height and size of buildings to the materials used in construction, even superficial matters such as paint colour and holiday decorations.

 

What is an easement?

An Easement is the right to use the real property of another without possessing it.
Easements are helpful for providing pathways across two or more pieces of property or allowing an individual to access a privately owned beach, hydro and telephone lines & boxes etc.

An easement is considered as a property right in itself and is still treated as a type of property in many jurisdictions. The rights of an easement holder may vary substantially among jurisdictions
Though, historically, the common law courts would enforce only four types of easement:

  • The right-of-way (easements of way)
  • Easements of support (pertaining to excavations)
  • Easements of "Light and Air"
  • Rights pertaining to artificial waterways.

Modern courts recognize more varieties of easements, but these original categories still form the foundation of easement law.

 

What is adverse possession?

Adverse Possession is a process by which premises can change ownership. It is a common law concept concerning the title to real property (land and the fixed structures built upon it).

By adverse possession, title to another's real property can be acquired without compensation, by holding the property in a manner that conflicts with the true owner's rights for a specified period. For example, "squatter's rights" are a specific form of adverse possession.

The circumstances in which adverse possession arises determine the type of title acquired by the the one who obtains the title from the original owner, which may be fee simple title, mineral rights, or another interest in real property.

Adverse possession's origins are based both in statutory actions and in common law precepts, so the details concerning adverse possession actions vary by jurisdiction.

How can I find out about crown interests and other interests that could be registered on title?

It is highly recommended that you order a Title Search Report and an Execution Search to ensure title is clear and that there are no affecting Crown Interests or Limiting Circumstances you should be aware of.
Don't forget to order your Updated Title Search Report for the morning of
the Tax Sale as well.

 

What is a title search and why do I need one?

A title search Report is a search of the title relating to the land, it will show you what interests are registered against the property, for example such things as mortgages or liens that may affect the land.

It is recommended that you purchase a Title Search Report to ensure title is clear and that there are no affecting Crown Interests or limiting circumstances you should be aware of registered on the land.

What is an execution search and why do I need one?

An execution search is a search on the owner(s) of a property.
It will show you what interests (if any) are registered against the owner(s)

It is recommended that you purchase an execution search to ensure there are NO executions registered against the owner(s) of the property that are in favour of the Crown that may become your responsibility once the tax deed is registered.

 

What is an “execution”?

An execution is a judgment issued by a court of law against a person or a corporation. In the event there is an execution registered on an owner(s) it will state that the individual or corporation owes an amount of money to the "Execution Creditor".

 

What is an “execution creditor”?

An Execution Creditor can be any individual or corporation with an interest specific to the Property or owner(s) who has registered an execution against the owner(s) in order to recover funds owed to them.

 

What does “subject to execution if enforceable” mean?

An example of "enforcing an execution" would be, a sheriff following order to seize an individual's property in order to collect funds owed to the Execution Creditor.

 

What is an updated title search report and why is it a good idea?

An Updated Title Search Report is a Search that is conducted on the day of the Tax Sale on the property you've tendered on or are about to bid on. It is recommended that you purchase an updated Title Search to ensure that there are no new registrations on title since your last Title Search.

By ordering this update you will be informed of any new registrations on title since your last search and you will have an opportunity to withdrawal you tender in the event there is something new on title that in some way has proven the Tax Sale to be less of a worthwhile investment.

 

Where do I get a title search report or an updated title search report?

You may order these documents from Tri-Target.com, we work very closely with some of Ontario's most skilled Title Searchers and provide all of the above documents at very competitive prices.

 

How do I withdraw my tender?


A tender is withdrawn if the tenderer's written request to have the tender withdrawn is received by the treasurer before 3 p.m. local time on the last date for receiving tenders. The envelope containing a withdrawn tender shall be opened at the time of the opening of the sealed envelopes.

A few methods of delivery could include:

- Courier
- Registered Mail
- Fax

Make sure your fax is legible and you have the correct fax no. and contact to ensure your fax is delivered to the correct person and on time!

**Ensure you follow up and ensure your request has been recieved by the correct party.

 

What if I miss the deadline to pay the remaining balance of my submitted tender?

If you miss the deadline to pay the remaining balance of your tender etc., you will lose your 20% deposit, everything you have invested to date and 'highest tender' will then be awarded to the second highest tender.

Your tender will no longer be valid, you will not get the property, no questions asked!

The solution to this potential problem is simple...

Do NOT under any circumstances miss this deadline. Especially if you want to ensure you get the property and that you don't lose everything you have invested up until this point.

 

What is land transfer tax?


Ontario Land Transfer Tax (LTT) is calculated on the purchase price of property.

The Ontario land transfer tax is to be paid by the purchaser on the purchase price upon registration of a Transfer/Deed of Land in the Ontario Land Registry Office.

 

How do I calculate land transfer tax?


Land Transfer Tax Calculator - Coming Soon

 

What are accumulated taxes?

Accumulated Taxes are real property taxes that have accumulated with respect to a parcel
of land from the first day of advertising of the parcel for sale by public sale until the day the property is sold.

This means the minimum tender amount you see on your Tri-Target Title Search Report or Form 6 Ad does NOT include the amount of taxes incurred since the municipality began advertising.

From the point a municipality begins to advertise to the point the property is sold, there is still tax accumulating, the "accumulated tax" is the tax that built up during the transfer process.

This is payable by the Successful Purchaser prior to registering a Transfer/Deed of Land.

 

What is HST?

Provincial Sales Tax (PST) has been combined with the federal Goods and Services Tax (GST) to create a Harmonized Sales Tax (HST) for Ontario, this change went into effect July 1, 2010.
The provincial portion of the HST is 8% and the federal portion is 5%, for a
combined HST rate of 13%

 

What is a commissioner for taking oaths?

Commissioners for taking oaths are persons who are empowered under provinciallegislation to administer and witness the swearing of oaths or solemn affirmations in the taking of an affidavit for any potential legal matter.

 

Where can I find a commissioner for taking oaths?

Some potential candidates for Commissioners of Oaths include

  • Doctors
  • Lawyers
  • Police Officers
  • Your Public Notary (Notary or Notary Public)

Please Note:

Keep in mind it is NOT the municipalities responsibility to provide a Commissioner of Oaths available to sign the tax deed, this is up to you!

 

What is a public notary?

A notary public (or notary or public notary) is a public officer constituted by law to serve the public in non-contentious matters usually concerned with estates, deeds, powers-of-attorney, and foreign and international business.

A notary's main functions are to administer oaths and affirmations, take affidavits and statutory declarations, witness and authenticate the execution of certain classes of documents, take acknowledgments of deeds and other conveyances, protest notes and bills of exchange, provide notice of foreign drafts, prepare marine protests in cases of damage, provide exemplifications and notarial copies, as well as performing certain other official acts depending on the jurisdiction.

There are more Common Tax Sale Q&A's Coming soon!



(The comments contained on this site are for information purposes only and do not constitute any form of legal advice whatsoever.)









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