Strathmore tax arrears auction set for Oct. 15

By Melissa Crispin-Piche Local Journalism Initiative Reporter

Residents will have an opportunity to bid on properties with unpaid taxes, but potential buyers should understand the process before taking part.

The Town of Strathmore is preparing to hold a public tax arrears auction on Thursday, Oct. 15, giving interested buyers an opportunity to purchase properties whose owners have fallen behind on their property taxes.

The auction is scheduled for 11 a.m. at the Strathmore Municipal Office, located at 1 Parklane Drive.

For anyone unfamiliar with tax arrears auctions, the process can seem a little confusing. Unlike a regular real estate sale, these auctions are held by municipalities to recover unpaid property taxes.

When property owners fail to pay their taxes for an extended period, municipalities can begin a tax recovery process under Alberta’s Municipal Government Act. This includes notifying property owners and giving them opportunities to pay what they owe before their property is offered for sale.

Even when a property is advertised for auction, the owner can still prevent the sale by paying the outstanding taxes and required costs before the property is sold.

Strathmore town council approved reserve bids for five properties in July, with prices ranging from $42,000 to $203,250.

The approved reserve bids are $42,000, $47,250, $162,532.50, $169,882.50 and $203,250.

A reserve bid is the minimum amount the municipality will accept for a property at auction. It is not necessarily the amount of unpaid taxes.

The municipality is required to set reserve bids as close as reasonably possible to the properties’ market values.

Although five properties were initially identified, that does not mean all five will be available on auction day. Properties may be removed from the auction if their owners pay the outstanding amounts beforehand.

Members of the public can attend the auction and bid on the properties available that day. Each property has a reserve price, and bids must meet that minimum for a sale to take place.

If the reserve price is not met, the property will remain unsold. The town may then become the owner of the property.

Successful bidders must pay the balance of their purchase within 30 days of the auction. Payment must be made by certified cheque or bank draft, and GST will apply where required.

If the winning bidder fails to complete payment within the 30-day period, the town has the right to offer the property to the next-highest bidder.

Buyers should know the risks. While a tax auction may attract people looking to purchase property, there are some important differences from a traditional real estate sale.

Properties are sold on an “as is, where is” basis. This means buyers are responsible for understanding what they are purchasing, including any potential problems with the land or buildings.

The town does not guarantee the condition of a property, the availability of services, soil conditions or whether the land is suitable for a buyer’s intended use.

Buyers also cannot make their bids conditional on obtaining financing, completing a home inspection or meeting other requirements.

Anyone considering bidding should research the property beforehand, review its land title and make sure they have the money available to complete the purchase.

Property owners can still prevent a sale. For property owners whose land is scheduled for auction, there is still an opportunity to stop the sale.

Under Alberta’s tax recovery rules, owners can prevent their property from being sold by paying all outstanding tax arrears and associated costs before the sale takes place.

This means the list of properties available on Oct. 15 could change, even shortly before the auction begins.

Residents interested in attending or purchasing a property are encouraged to contact the Town of Strathmore ahead of time to confirm which properties remain available and review the conditions of sale.