Casual Legal: Recovery of taxes related to land

By Maddison Croden
Reynolds Mirth Richards Farmer LLP
Alberta Municipalities Casual Legal Service Provider

This article will provide a high-level overview of the steps required of municipalities that may be looking to enforce against property in order to recover property tax arrears under the Municipal Government Act (MGA).

No later than March 31 of each year, a municipality must prepare a list showing the parcels of land within the municipality which have been in tax arrears for more than one year (the “Tax Arrears List”). The municipality must provide two copies of the Tax Arrears List to the Registrar of Land Titles – one copy to the Minister responsible for the Unclaimed Personal Property and Vested Property Act, and a second copy of the list to post in a place accessible to the public during regular business hours. The municipality must notify the individual who is responsible for payment of the tax arrears that the Tax Arrears List has been prepared and sent to the Registrar. Once the Registrar receives the Tax Arrears List, they will place a tax recovery notification on title for the property and send the certificate of title back to the municipality.

If the municipality has not received payment of outstanding property tax arrears, the MGA contemplates a municipality may sell the property at a public auction. No later than August 1 following receipt of a copy of the Tax Arrears List, the Registrar is required to send a notice to the owner of the parcel of land, and the owner of any other interest or encumbrance registered on title to the land indicating: (a) if tax arrears are not paid prior to March 31 of the following year, the land will be offered for sale at a public auction, and (b) the municipality may become the owner of the property if it is not sold at the public auction.

If property tax arrears are not paid by March 31 of the year following the Registrar’s receipt of the Tax Arrears List, the municipality must offer the property for sale at a public auction. The public auction must be held no earlier than the date identified in the Registrar’s letter to the property owner, and no later than one year following that date.

The municipality must advertise the public auction in the Alberta Gazette between 40 and 90 days prior to the date the public auction is held, and in a newspaper having general circulation in the municipality 10-to-20 days prior to the date on which the auction is to be held. The advertisement must detail the date, time, and location of the public auction, the conditions of sale, and a description of each parcel of land to be offered for sale.

Not less than four weeks prior to the date of the public auction, the municipality must send a copy of the Alberta Gazette advertisement to the owner of the property that is to be offered for sale, as well as any other person with an interest or encumbrance registered on the land titles certificate.

Following an unsuccessful public auction, municipalities have a number of options available to them with respect to tax recovery. The “best” option will depend on a number of factors, including the tax arrears, the value of the property and the financial encumbrances registered on title. Therefore, municipalities may want to consider seeking additional advice.

To access Alberta Municipalities Casual Legal Helpline, Alberta Municipalities members can call toll-free to 1-800-661-7673 or send an casuallegal [at] abmunis.ca (email) to reach the municipal legal experts at Reynolds Mirth Richards and Farmer LLP. For more information on the Casual Legal Service, please call 310-MUNI (6864) or send an riskcontrol [at] abmunis.ca (email) to Alberta Municipalities Risk Management staff. Any Regular or Associate member of Alberta Municipalities can access the Casual Legal Service.

DISCLAIMER: This article is meant to provide information only and is not intended to provide legal advice. You should seek the advice of legal counsel to address your specific set of circumstances. Although every effort has been made to provide current and accurate information, changes to the law may cause the information in this article to be outdated.