Collector’s Corner:

TAX SALE – WHAT DOES THE FUTURE HOLD?

At the January Collectors’ Forum webinar, Michael Moll, lawyer, CivicLegal LLP and I gave the presentation “Tax Sales for Financial Officers – Selected Legal Issues”. The tax sale process is governed by legislation which has been further interpreted by quite a few legal cases. Also, in December 2021 the Office of the Ombudsperson issued the report “A Bid For Fairness”.

As we know, tax sale is serious business since it could result in someone losing their property for unpaid property taxes. This is reinforced by the case Gray v Langley Township (1986) where the judge stated “The intention of the legislation was to make tax sales final notwithstanding defects in procedure.” An example of a defect in procedure is making a manifest error in the process before or at the tax sale, in which case LGA S668 states that Council has the authority to cancel the tax sale. Also, according to S666 the owner of a tax sale property may bring an action in court to have the tax sale set aside and declared invalid on certain grounds. But recent court cases have muddied the waters in that maybe tax sale isn’t so final. In the 521006 B.C. Ltd. v. Pemberton (Village), 2019 case the court held that an owner could still commence an action for declaratory relief finding the tax sale to be invalid. And in the Maple Ridge (Re), 2020 case the municipality used judicial review to invalidate a tax sale.

In addition to the legal cases, Michael discussed the Ombudsperson’s recommendations that pre-tax sale notices be sent to property owners, the pros and cons of an increased minimum upset price, and the impact of delaying filing notice of non-redemption. In summary, local governments are increasingly expected to go beyond statutory requirements, changes and guidance are expected, and the risks and uncertainties of nonredemption justify efforts to improve the chances of redemption.

So, what does the future hold? At the time of this writing the Province hadn’t responded to the recommendations. However, a couple of points were made at the Collectors’ Forum:

• The Ministry hoped to meet with the Ombudsperson by the end of January for comment on the Ministry’s responses. When comments are received, the Ministry’s responses will be posted on the website and forwarded to the tax sale working group.

• The recommendation for a legislated pre-tax sale notification has been approved. At the time of writing this writing, the legislation (BILL 3 – 2023 MISCELLANEOUS STATUTES AMENDMENT ACT, 2023) has been introduced and no doubt will receive Royal Assent by the time this article is published. At this time it is unsure if this requirement will be applicable for the 2023 tax sale.

• Collectors are not expected to determine if a person is vulnerable. There is no clear definition of “vulnerable”.

• The suggestion to improve public education on tax sales (e.g. lawyers, Ministry of Municipal Affairs) was unanimously supported by all.

So, what does the future hold for tax sale? We’ll have to wait and see. Thank you to GFOABC for keeping us informed on this and the other financial issues facing municipal finance officers. Stay tuned and in the meantime, be careful, be diligent – tax sale may not be so final.

DOUG STEIN has worked in municipal finance for over 30 years. In 2011 he retired from his position as Manager of Revenue Services for the District of Saanich. Doug leads the Collectors’ Forum, is a GFOABC Life Member, and a CPA, CMA.