Public Tender Vs. Public Auction - What's the Difference?

In this edition of our Company Blog we would like to discuss another very common question we receive from our members regarding tax sales.


Public Tender VS. Public Auction -  What's the Difference? 
 
Tendering or Bidding on a Tax Sale property can be done 1 of 2 ways depending on how the tax sale is being conducted.  Is this a Sale of Land by Public Tender or is it a Sale of Land by Public Auction?
Though, it is very seldom to see a Tax Sale by Public Auction; they do still occur.
These are both procedures for generating competing offers from different tenderers or bidders. 

 
The two main factors that set these methods apart is how you submit your tender or bid and when the offered tender or bid is due.

Sale of Land by Public Tender

For instance, when making an offer on a property that is being sold by Public Tender, you must submit your offer/tender in a sealed envelope (containing at least 20% of the amount tendered), you have only one chance to be selected as the highest tenderer and cannot re-submit your tender after the tax sale has been conducted. Tenders will be opened on the tax sale date at or as soon as possible after 3:00pm.
According to the Municipal Tax Sale Rules, once the highest tender has been determined, that tenderer will be declared to be the successful purchaser if, within 14 days of the mailing of the notice, the balance of the amount tendered, the applicable land transfer tax and the accumulated taxes are paid, in cash, to the treasurer.

NOTE: This method for tax sale is very similar to a silent auction.


Sale of Land by Public Auction
When making an offer on a property that is being sold by Public Auction, you must be present at the designated location at the time that the tax sale is being conducted.  If you bid on a tax sale property and somebody else out bids you - you have the opportunity to bid again and again until a highest tender has been determined.

According to the Municipal Tax Sale Rules,  the highest bidder shall be declared to be the successful purchaser if the bidder immediately pays the amount bid, the applicable land transfer tax and the accumulated taxes, in cash, to the auctioneer.

NOTE: This method for tax sale is exactly as stated above - 'A Public Auction' - Conducted Aloud  

For more information on the Sale of Land by Public Tender VS. Sale of Land by Public Auction and other helpful information, please visit the link below to view the Ontario Municipal Tax Sale Rules.

Tri-Target.com - Ontario Municipal Tax Sale Rules

Tri-Target.com - Ontario Municipal Tax Sale Legislation

The Minimum Tender Amount - What is it & Where does it come from?

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


The Minimum Tender Amount - What is it & Where does it come from?

The Minimum Tender Amount (or otherwise known as, the Cancellation Price) is the amount of all tax arrears owing right up to the first day of advertising, this amount includes penalties, interest, and all reasonable costs incurred from the time the municipality becomes entitled to register a Tax Arrears Certificate under Section 371(1) of the Municipal Act, 2001.

The Minimum Tender Amount is the lowest you may tender or bid on a tax sale property.
Any tenders or bids that do not meet or exceed this amount will be rejected and returned to the tenderer or bidder.

Because there are so many types of tax sale properties the total of the Minimum Tender Amount can fluctuate depending on several different variables.
Some of the charges that can be added in addition to the amounts under Section 371(1) are costs associated with,  

• The Supply of Water  
• The Supply of Artificial or Natural Gas 
• The Supply of Steam or Hot Water
• The Use of a Sewage System
• The Use of a Waste Management System   

Including certain fees and charges for business improvement 
2. 
(1)  Fees and charges that are imposed by a municipality or local board under the Act and meet the requirements of paragraphs 1 and 2 of subsection 361 (13) of the Act have priority lien status as described in section 1 of the Act. O. Reg. 581/06, s. 2 (1).

(2) Fees and charges described in subsection (1) and imposed before the day this Regulation comes into force have priority lien status effective the day this Regulation comes into force.

For more information regarding this regulation please visit the following link.

Fees and Charges - Priority Lien Status

To view a copy of the Tax Sale Rules and Tax Sale Legislation please click below. 

Tax Sale Rules and Legislation

If you have any further questions please feel free to email us at Info@Tri-Target.com  

 
 
What are Targeted Tax Sale Tips?

Targeted Tax Sale Tips are sent weekly with our 'Tri-Target.com - 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!

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 'Tri-Target.com - 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!

The Downside to Using Google Maps and Others when searching for Accurate Imagery

In this edition of our Company Blog I would like to discuss a couple of the downsides associated with using Google maps and similar websites to attain imagery of municipal tax sale and surplus properties.

One of the largest problems encountered when using this imagery is that many of the photos are outdated, sometimes more than 5 years. This could mean the difference between what appears to be a large clean lot with a house on it, compared to the unfortunate reality of a property or house that has been abandoned or torn down at some time after the most recent image was made available in their imagery database.

Another common issue you will find when you are using these types of websites is that the accuracy of the address can sometime be off by 20 numbers or more depending on the length and size of the road, property and even the number of properties.  The reason this happens is because these websites average the property locations based on the length of the road vs. the number of homes/properties on the road etc. 

Neither the accuracy of the property location nor the accuracy of the actual photograph proves this to be a viable option when attaining accurate information about tax sale properties.  At most it may be of use to provide an average location or maybe to see the general area where the property is located.  Be careful when researching your properties and always make sure you are aware of what you are investing in.

What are Targeted Tax Sale Tips?

Targeted Tax Sale Tips are sent weekly with our 'Tri-Target.com - 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! 

Helping to avoid unnecessary financial loss

In this edition of our Company Blog we would like to address a common issue in regard to property redemption and unnecessary financial loss.

Please take a moment to read the helpful information below.

 
Helping to avoid unnecessary financial loss

Generally when you hear the saying "It sounds too good to be true", it's because in many cases it is.

A common issue I have heard a great deal about in the past has been the high volume of individuals who 'jump the gun' when purchasing tax sale properties.  I'm talking about when tax sale investors find the perfect property and immediately start pouring their money into researching it when it may very well become futile in the event the property is redeemed prior to the tax sale date.

In many cases these 'perfect properties' will be redeemed prior to the tax sale date, usually because the owner(s) have decided it may be against their best interests to allow the sale of their home or property.  A good practice in helping to avoid this situation is when you have found your 'perfect property', to wait as long as you are comfortable with to see first whether the property is redeemed or not before you begin spending excessive costs on title searches, execution searches, tender packages, etc., leaving enough time to allow you to effectively research your investment.   

By following this simple guideline you will likely some time or another, avoid losing your invested time and money due to the redemption of a tax sale property.

Always make sure you have enough time to research your property and be sure not to wait to the last second or you may find you are rushing into something blind and without direction.  Take your time and always remember the moral of the old story The Tortoise and the Hare - "Slow and Steady Wins the Race".


What are Targeted Tax Sale Tips?

Targeted Tax Sale Tips are sent weekly with our 'Tri-Target.com - 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! 

Municipal Surplus Property - A Couple Questions - Answered

In this edition of our Company Blog we would like to answer a couple of the commonly asked surplus property questions we receive from our members.
 
Please take a moment to read the helpful information below.

 
Thinking About Purchasing Municipal Surplus Property in Ontario?
 
Have you ever thought about the actual steps involved with purchasing Municipal Surplus Property?  Below is information regarding the commonly asked questions regarding the purchase and sale that you may want to consider if you are serious about investing in these properties.

A very common question dealing with the legalities involved when purchasing Ontario's Municipal Surplus Properties is, "Do I need a lawyer?" 
In our opinion it is advisable to utilize the services of a lawyer for all aspects of your purchase and very importantly when signing contractual agreements regarding the purchase or sale of any property.

Another common question we receive from our members is, "What are Municipal Surplus Properties"?  

These may be properties that have been vested into the municipality because of a failed tax sale or properties the municipality owns, no longer has a use for and simply wants sold.
Many of these properties open the door to very lucrative investment opportunities.

What are Targeted Tax Sale Tips?

Targeted Tax Sale Tips are sent weekly with our 'Tri-Target.com - Upcoming Tax Sales' newsletter ans 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! 

A Couple Commonly Asked Questions - Answered

In this edition of our Company Blog we would like to answer a couple of the commonly asked tax sale questions we receive from our members.
 
Please take a moment to read the helpful information below.

 
What happens if no tenders or bids received at a tax sale?
 
When there are no tenders or bids received the municipality has up to 2 years from the date of the tax sale to register a notice of vesting or to re-advertise the property.

If the municipality fails to either vest the property or re-advertise for tax sale within the 2 year time period, the tax arrears certificate will be deemed to be cancelled.  Once the tax arrears certificate is deemed to be cancelled, in order to advertise the property again for tax sale the municipality will have to conduct the tax registration and tax sale again from the beginning stages.

Do tax sales have busier and slower times throughout the year?

For the most part tax sale properties are advertised consistently throughout the year, though it is very common for tax sale advertisements to slow down and sometimes stop all together during the months of November and especially December prior to the holidays.  Municipal tax sales tend to pick up again starting in the new year and usually peak in regard to volume in the warmer months of the year leading into the fall season. There are approximately 200 tax sales each year and many of which sell for under $15,000.00.

Tri-Target is currently indexing every tax sale since 2007 and will provide the statistical information to our members free of charge in the near future.


 

What are Targeted Tax Sale Tips?

Targeted Tax Sale Tips are sent weekly with our 'Tri-Target.com - Upcoming Tax Sales' newsletter and posted on 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!

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.

 

Remember:

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 'Tri-Target.com - 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!

Buyer Beware - Purchasing Tax Sale Property - Part 3 of 4

In this edition of our Company Blog we are going to discuss the third of four parts regarding the importance of researching your property of interest (POI).

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 Note:

You may be able to lessen the risks taken when purchasing tax sale property but in no way will you eliminate them.


Below you will find a quick overview of some of the financial risks involved with purchasing contaminated property and steps you may consider taking in an effort to help to protect your best interests.

Contaminated Property - What's the Big Deal?

 

A considerable risk when purchasing tax sale property is of course, the physical condition.
For instance, there are many types of tax sale properties, some of which may be contaminated, including but not limited to, gas stations, auto mechanics shops; just to name a couple.

If you were to purchase a property that was contaminated the repercussions could be astronomical.  Depending on the extent of the level of contamination and many other underlying factors, this could cost millions of dollars to clean up and unfortunately and you may have little choice in doing so depending on the circumstances present at that time.

A good practice to take steps in helping to avoid this situation is to investigate your property of interest (POI).  By researching the property you may come to realize it may not be such a worthy investment in the event the property is contaminated and you do not wish to cover the associated expenses involved with a clean up.  Sometimes driving by the subject property is all you need to do, if the property is a gas station, auto mechanics shop, garage or some other type of potentially contaminated property in many cases but not necessarily all, this should be quite simple to determine.  In other cases you may not be able to see the risk right in front of you and may consider researching your POI in more depth to help decide if there are any risks present that may have an otherwise nasty aftermath if you were to purchase the property.

When purchasing tax sale properties if you are not familiar with the tax sale legislation, rules and market you may compare your experience to something along the lines of stumbling around in the dark without a light.  By learning as much as possible about Tax Sales and the process itself you will undoubtedly find yourself better equipped when the time comes to research your potential purchase and submit your tender to the municipality.

If have any questions please email our office at Info@Tri-Target.com, Let us help light your way!

In our next Blog we will provide explanations for many other questions regarding your responsibilities when purchasing tax sale property and some of the less common tax sale risks that may result in a nominal or significant financial loss.

Remember:

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 'Tri-Target.com - Upcoming Tax Sales' newsletter and 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!

Buyer Beware - Purchasing Tax Sale Property - Part 2 of 4

In this edition of our Company Blog we are going to discuss the second of four parts regarding the importance of researching your property of interest (POI).

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 Note:

You may be able to lessen the risks taken when purchasing tax sale property but in no way will you eliminate them.


Below you will find a few of our common questions regarding financial risks associated with purchasing Tax Sale properties.


What if the tax sale is CANCELLED by the Municipality?...

Sometimes a Tax Sale will be cancelled prior to the Tax Sale date.  The main reason this may happen is, the owner has come in and paid their tax arrears etc. in full - redeeming their property.

Your submitted deposit will be returned to you, but you will lose any costs invested up until that point such as the cost for Title Search Reports, Updated Title Search Reports, Writ Searches and any other associated investigatory costs.


I don't want the property anymore; BUT I'm the Highest Tender/Bidder!

If you find yourself in the situation of being declared the highest Tenderer/Bidder, but no longer wish to purchase the property you WILL lose your deposit of at least 20% of the minimum tender amount including any other associated investigatory costs.


How can I withdraw my tender?

A tender is withdrawn if the tenderers written request to have the tender withdrawn is received by the treasurer before 3:00pm local time on the last day for receiving tenders.  The envelope containing a withdrawn tender shall be opened at the time of the opening of the sealed envelopes.


 **ALWAYS FOLLOW UP AND ENSURE YOU REQUEST HAS BEEN RECEIVED.

There are risks with purchasing tax sale properties just like anything else. Doing your due diligence is by far one of the most important steps involved when purchasing tax sale property. 
Our Common Tax Sale - Questions and Answers will be available shortly, this section will have answers to many tax sale related questions, links to certain resources and much more!


In our next blog we will be discussing the risk of purchasing property that is contaminated.

Remember:

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 'Tri-Target.com - Upcoming Tax Sales' newsletter and posted on 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!