A Tax sale is the process followed by a Municipality to recover unpaid property taxes through the sale of the property that is in arrears. The City of Brampton carries out recovery of tax arrears in accordance to legislation, municipal policies and procedures.
A Tax Arrears Certificate (lien on title of the property) may be registered where any part of tax arrears is owing on January 1st in the second year following that in which the property taxes become owing. The sale of land for tax arrears (tax sale) is governed by the Municipal Act, 2001, S.O. 2001, c.25, including Ontario Regulation 181/03.
The registration of a Tax Arrears Certificate indicates that the property may be advertised and sold by tender process if taxes, penalties, interest and reasonable costs incurred by the City (the cancellation price) are not paid within one year (or 90 days for commercial properties escheated to the Crown) of registration of the certificate. Advertisements are generally published in the Brampton Guardian for four consecutive weeks, in the Ontario Gazette for one week and on the City web site from the first date of advertising up to the date of tender opening.
Once a Tax Arrears Certificate has been registered, partial payments cannot be accepted, except upon Treasurer’s or designate approval of an extension agreement, arranged with the owner or interested party (as described by legislation) prior to the expiry of the one-year (or 90-day) period.
Using forms and directions as described by Ontario Regulation 181/03 (Municipal Tax Sale Rules), the tendering process is conducted. The successful purchaser is required to pay the amount tendered plus accumulated taxes, penalties, interests, reasonable costs incurred by the City during the tax sale process, GST/HST if applicable and the relevant land transfer tax within 14 days of being declared. The deposit (required as per legislation) is forfeited to the municipality if the transaction is not completed within the 14 days.
Tenders are opened in a public forum on the date and time advertised. Following the opening, the City reviews all tenders for legislative compliance and determines the two highest qualified tenderers. Rejected tenders are returned by registered mail (or as otherwise specified as per tender documents) to the tenderer along with their deposit and reason for rejection. No declaration of highest tenderer, second highest tenderer or return of deposits is done at the tendering opening.
Properties sold through the tax sale process are sold without any warranties, are as is, and the Municipality has no obligation to provide vacant possession or assurances.
Any tax sale declared to be unsuccessful may be vested by the municipality or re-advertised for sale within two calendar years of declaration.
The City reserves the right to withdraw any property from the tax sale process at any time prior to registration of a tax deed without notice.
The City does not provide legal advice in respect of tax sales or any other matters.
Collection notifications and actions Prior to Tax Sale
The City of Brampton, prior to the registration of a Tax Arrears Certificate, conducts various collection activities including, but not limited to:
- Overdue Notices
Overdue notices of outstanding taxes are issued a minimum of twice (2) per year. Additional overdue notices may be sent as deemed necessary by the Tax Collector.
- Tax Arrears Final Notice
The notice warns owners that their property tax accounts are about to become 2 or more years in arrears and may be subject to tax sale proceedings by the City of Brampton if not paid by January 1st of the following year.
- Title search
A title search is performed to identify the owners of a property, and all lien holders (interested parties) for notification requirements pursuant to legislation. This search is performed at cost to the taxpayer and a charge is added to the property tax account. Notifications of added charges are sent by mail to the taxpayer.
- Urgent Notices to Interested Parties
Notice of tax arrears is sent to owners and any interested party appearing on the title search. Interested parties are provided this notice to inform them of the tax arrears situation and that their lien on the property may be in jeopardy.
- Bailiff Notices
In accordance to the Municipal Act, 2001, municipalities can use third parties to collect taxes. The City of Brampton uses a Bailiff to work with property tax accounts in arrears. Notification to the owner is provided directly from the bailiff, and no payments will be processed by the City while a Warrant is active, payments must be made directly to the Bailiff. If a payment is received by the City, it is immediately refunded to the owner or payee.
- Notice of Intent to Realize on Security
Notice is sent out on all accounts prior to the registration of the Tax Arrears Certificate. This notice is intended for any person currently engaged in farming for commercial purposes. If the notice is sent to someone that is not engaged in farming for commercial purposes, this notice should not be acted on.
- Tax Arrears Certificate (Lien)
A Tax Arrears Certificate is type of lien registered on the title of the property. The lien will stay on the property until the property tax account is paid in full or the Municipality completes a Tax Sale.
- Form 1 – Notice of Registration of Tax Arrears Certificate
Upon registration of a Tax Arrears Certificate this notice is sent to the owner of the property and all interested parties informing of the registration, timeline, ways to remedy the situation and possible Sale of Land for Tax Arrears (Tax Sale).
- Form 3 – Final Notice of Registration of Tax Arrears Certificate Under Section 373 of the Act
A final warning to the tax payer of remaining timeline to redeem Property Tax account, and pending Tax Sale. If the Cancellation Price has not been paid prior to expiry of the 365 days from registry of the Tax Arrears Certificate, then the City will proceed with the advertising and tax sale of the property.