Municipal Tax Sales in Ontario

Municipalities dispose of properties authority under Part XI (Sections 371-389) of the Municipal Act, 2001 R.O. 2001 c. 25, within their jurisdiction for arrears of taxes.

The tax arrears include outstanding amounts owed to a municipality which consist of costs, expenses and levies (added to the tax rolls) The details of. the tax sale process are set out in O.Reg.181/03. These are the rules the municipality must follow in order to sell properties for tax arrears. The effect of a municipal tax sale is to vest in the municipality the right to convey ownership to a third party upon the payment of a sum equal to or greater than the outstanding tax arrears, called the Cancellation Price.

In exchange, a Purchaser, receives title to the lands purged of most other interests.

The benefit of obtaining title through a tax sale is the purge of title. The tax deed vests title in fee simple to the new owner, subject only to easements and restrictive covenants registered on title, adverse possessory claims by abutting owners and any estate or interest of the Crown in Right of Canada or the Province of Ontario, which include charges, liens, executions, writs or security interests.

All other interests on title are purged by the Registrar. The municipality does not make any representation or warranty with respect to the property, including its use, zoning, size, dimensions, access, servicing, marketability or quality of title.

It should be noted that the municipality is not obligated to provide vacant possession on closing.

Brian Madigan LL.B., Broker

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