CASUAL LEGAL: Section 420: Now that Possession is Legal…

Attention: AMSC Members – Please distribute to all appropriate personnel

Section 420: Now that Possession is Legal…

By Benjamin J. Ferland

Reynolds Mirth Richards Farmer LLP

AMSC Casual Legal Service Provider

Sooner or later, most municipalities will need to offer lands for sale at public auction per Part 10 of the Municipal Government Act in order to recover tax arrears related to those lands.  Ideally, the auction attracts offers equal to or greater than the minimum bid prices, the properties are sold, and the arrears are paid out from the proceeds. 

Sometimes, whether due to the nature or condition of the parcel, occupancy, or unfavorable market conditions, these auctions prove unsuccessful. In such instances, the municipality may wish to take possession of the unsold parcel to improve its salability for listing with a realtor or by some other method.  Section 420 of the MGA entitles municipalities to do just that, permitting a designated officer of the municipality to enter and take possession of the unsold parcel in the name of the municipality from the date the parcel was offered at auction. 

The manner in which a municipality exercises this right largely depends on the occupancy of the parcel.  In all cases, the first step is to notify the registered owner in writing that the property was not sold at auction and the municipality intends to take possession per section 420. This provides an additional opportunity for the owner (or other interested party) to pay the arrears rather than handing over the parcel, or to surrender the parcel voluntarily. 

Once the owner is notified, obtaining possession of a vacant parcel may be a simple matter of attending the lands and changing the locks.  If the parcel is owner or tenant-occupied, the occupants should be given a reasonable period of time to remove their belongings and vacate the property.  What constitutes reasonable notice will vary to some extent with the circumstances of each case.  It is also important to determine early on whether the municipality has any duties in disposing of personal property left on the parcel.  If, however, a vacant parcel has been occupied by squatters or is being used for illegal activities, a 24-hour notice or even immediate possession may be reasonable. 

If occupants fail or refuse to vacate voluntarily, then the municipality can apply to the Court of Queen’s Bench for possession on notice to the occupants and owner.  The municipality will need to provide an affidavit in support of its application demonstrating its entitlement to possession, that it has complied with the MGA, and the nature of the occupants’ resistance.  A detailed and organized enforcement file can expedite preparation of the application by having this evidence ready at hand.  The form of order should provide, among other things, that police may attend with the municipality to assist in evicting the occupants if necessary, and that the costs of the application will be added to the tax roll for the parcel.  Much like a foreclosure proceeding, a Civil Enforcement Agent will generally execute the eviction.

Seeking the advice of legal counsel prior to taking possession of a parcel  under section 420 is a good way to prevent unnecessary delays, expenses and liability in the exercise of the municipality’s rights.

To access AMSC’s Casual Legal Helpline, AUMA members can call toll-free to 1-800-661-7673 or email casuallegal [at] amsc.ca (casuallegal[at]amsc[dot]ca) and reach the municipal legal experts at Reynolds Mirth Richards and Farmer LLP.  For more information on the Casual Legal Service, please contact Will Burtenshaw, Senior Director, Risk & Claims, at 780-431-4525, or toll-free at 310-AUMA (2862) or via email at wburtenshaw [at] auma.ca (wburtenshaw[at]auma[dot]ca).  Any Regular or Associate member of the AUMA 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.