The consequences of not paying property taxes are not well appreciated. In my last blog entry I explained the term Judicial Sale and highlighted that this legal process is a great opportunity to acquire undervauled properties in cottage country. More often than not the cause is the non-payment of property taxes.
The other day we received a phone call from a solicitor to help resolve a legal action initiated by a municipality to collect tax arrears. The owner of this very attractive rural property was one week away from being evicted by the sheriff. Specifically, he owed the municipality five years of property taxes plus penalties, interest charges and legal fees.
Burying his head in the sand in ostrich-like fashion he simply ignored the mail, evidenced by a pile of unopened letters. He came dangerously close to loosing his property before we intervened on his behalf with a private mortgage on his otherwise mortgage free property.
This episode illustrates a lot of leniency and patience by municipalities toward property owners before they finally resort to the cumbersome legal process of judicial sale. Keep in mind that properties are an important source of tax revenues necessary to pay for municipal services. When default occurs on an otherwise debt free property, the government turns to the public with the announcement of their intended judicial sale and rewards the highest bidder with conveyance of ownership. The new owner assumes the obligation to pay property taxes and, hopefully, keeps payments up to date.
If you are interested in cottage country properties this may be an opportunity worthwhile exploring. One of our private investors purchased a small island of Georgian Bay in this way.
If your property taxes are currently in arrears and would like to finance them through a private mortgage or you are a private investor who would like to explore these and other opportunities please give me a call to discuss. Arnold Molder. 416.461.0204 Dedicated to financial sufficiency.