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.

In my last post I wrote about an astute investor who exploited the opportunity of a Judicial Sale when he bought a unique, mixed-use property, for a bargain price of under $100,000. Such opportunities come up frequently but are missed by most people because they don’t know where to look specifically. In addition, the term Judicial Sale is not part of the everyday vocabulary and opportunities are missed.

The term judicial sale is a legal notice informing the public of an intended sale of a property to the highest bidder, in an auction environment by a sheriff. The reason for a judicial sale is most commonly for arrears of property taxes owed to a municipality.

The action of resorting to a Judicial Sale occurs only after a municipality has failed to collect tax arrears from the owner, and all other methods of suasion have also failed. In other words, a Judicial Sale is the final legal act to obtain these arrears through a property sale to the highest bidder.

Such notices appear typically in the newspaper column under legal matters/auctions.

Notices of smaller communities and municipalities, especially in cottage country, offer greater opportunities for investors. The first reason is that due to population numbers, there is a smaller interested audience than in a city. Secondly, it requires special geographic knowledge. Finally, it takes a lot less money to be a successful bidder.

If you are patient and interested in cottage country properties, this may be an opportunity worthwhile exploring. One of our clients, a couple, purchased a property for summer vacations under Judicial Sale on Prince Edward Island, where they grew up.

Granted, the pursuit of Judicial Sales opportunities requires effort, but it can be a rewarding experience.

It is highly unlikely in these situations for a Bank to be your financial partner. More often than not, such situations require private mortgage financing and backing of an experienced mortgage broker.

From the Files Of The Broker: Arnold Molder 416.461.0204