SUNDRE – For the first time in recent memory, council must decide what to do with a residential property that has fallen several years into arrears.
One of three residential properties that council had back in June scheduled an auction date for on Oct. 23, the mobile home on Oak Crescent off of Fourth Street NW with a reserve bid set at $230,000 did not garner any bids during the sale that was attended by only one person. The other two properties did not end up going for auction as their outstanding taxes had been settled.
Providing council with a report recapping the situation on Oct. 28 during a regular meeting, chief administrative officer Linda Nelson outlined the steps that had been taken to date which are entirely regulated through the province’s Municipal Government Act.
“There really is no room to deviate from processes that are set out under the MGA,” said Nelson.
“The law has ever required that those persons whose properties have been by misfortune or otherwise subjected to the process shall be dealt with fairly and without coercion and with as little suffering and loss as possible,” she said.
Per the legislation, municipalities may put parcels of land for which property arrears are owing up for auction to recover those arrears. But before that can happen, a property must have fallen into at least three years of tax arrears.
Every year, municipalities must keep track of properties that are in arrears and prepare a list showing the parcels of land for which taxes owed are outstanding for more than on year.
That list is sent to the land titles registrar and posted publicly, said Nelson, adding the registrar registers a tax recovery notification on the certificate of title for each listed property.
Once a notification has been registered on a title, a municipality must then send to the owner a notice stating that if arrears are not paid by March 31 of the following year, the municipality will offer the parcel for sale at a public auction, she said.
Sales must be advertised in advance between 40 to 90 days in the Alberta Gazette provincial government newspaper as well as a local newspaper between 10 to 20 days before the auction. In this instance, information about the public auction was advertised in the Alberta Gazette on Aug. 31, 2024 as well as the Oct. 8, 2024 edition of the Albertan. The advertisement must also state that a municipality may following the auction become the owner of any parcels that are not sold.
“A failure to comply with any of the deadlines or notice requirements as set in the MGA for tax auctions can provide a basis for the property owner to challenge the tax recovery process as being invalid,” Nelson emphasized, later adding reserve bids must be set as close as reasonably possible to market value and that any bids lower than the reserve cannot be accepted.
Following her presentation, Coun. Paul Isaac moved to accept the report for information.
“What happens now?” asked Coun. Jaime Marr.
“We will come back to a future council meeting in the very near future to provide council with the options that they have for tax recovery,” replied Nelson.
Following up, Marr sought to confirm a question that had been brought to her attention as to whether the parcel’s owner for the time being still owns the property.
“That is correct,” said Nelson.
“So, can the property owner sell the property right now, or does this prevent that property owner from selling this property?” asked Marr.
Nelson said she would need to confirm and follow up with council.
Coun. Chris Vardas asked if the process restricted tax recovery auctions to being held only in person or whether perhaps there might be an option to conduct a sale online.
“I see now auctions are always online, and it draws a bigger crowd,” said Vardas, adding live auctions seem to have became relatively rare in the digital age when people tend to prefer bidding on their phones or computers.
“You draw a higher value, is what I’m trying to say,” he said.
Nelson again said she would need to further investigate before getting back to council.
Coun. Owen Petersen sought to confirm that administration felt “very confident that they followed all the rules in this process” to which Nelson said, “100 per cent.”
Without further discussion, mayor Richard Warnock called a vote on Isaac’s motion that was carried unanimously.
Chris Albert, director of corporate services, told the Albertan in response to follow-up questions that “until the next steps are taken by the municipality, the property owner is able to sell the property.”
Should the property’s owner do so, the outstanding taxes would still have to be paid up, “which would normally happen through the legal transaction process,” Albert wrote by email on Tuesday, Nov. 5.
“However, should it not go through a normal transaction involving a lawyer, then it would be buyer beware as the new buyer would be responsible for the taxes owing and the municipality's collection process would continue on the same timeline,” he added.
As for how an auction can be conducted, he said the MGA does not specifically state that a sale must be held in person.
But “due to the complicated nature of the sale, and that the deposit payments can be large and are required immediately, it is best practice to conduct these types of auctions in-person,” he said.
“I do not know if any municipality in the province offers an online auction, but I can confirm the City of Calgary still holds their auction in-person,” he added.
A full report outlining all of the options available for council’s consideration prior to making a decision is now in the works.
“As this is seldom experienced for the Town of Sundre, I am currently in the process of determining what those options are along with the potential risks,” he said. “So I am unable to comment at this time until that information is presented.”
