Files of the Broker: Tax Arrears, Wolves & the Oak Ridges Morraine

October 6, 2011

The failure to pay property taxes and resulting consequences are not always well appreciated.
Earlier I reported how we saved a homeowner from falling into the hands of the municipality through the Sheriff. The legal action, initiated by a municipality, was over failure to pay property taxes.
The owner of this very attractive rural property on the Oak Ridges Moraine, near the Dagmar Ski area, owed the municipality five years of property taxes plus penalties, interest charges and legal fees. In Ostrich-like fashion, he simply ignored the mail, evidenced by a pile of unopened letters.
He came dangerously close to loosing his property before we intervened with a $40,000, private mortgage on his otherwise debt free property. We had established a market value of $150,000 which provided us with a comfortable equity cushion based mainly on lot value. A fire had previously destroyed a very old farmhouse leaving only the foundation.
Much to my surprise, the owner recently called to request a discharge of mortgage. The brush with the Sheriff had alerted him about realizing the potential value of his property where he had boarded horses and wolves (Yes, wolves!). When he discussed with his neighbors his intention to return to Germany, he received two competing offers, within a day. In the end he accepted an offer for $495,000. He mentioned that it was probably worth more but being a good-natured neighbor, and counting his blessings, he was satisfied with the price of his private sale.
What made the property so valuable was the ruling that, although the farmhouse had burned down and building permits are no longer issued for construction of homes on the Oak Ridges Moraine, his property was exempt from that ruling as it allowed for the rebuilding of a home.
Our quick intervention with private money averted a great financial loss to the homeowner because the municipality would have auctioned off the property, anonymously, to the highest bidder. Government auctions are advertised not in the regular newspapers or real estate agents. Sheriff Sales are listed mostly in the Gazette, which is read only by special interest groups. Very likely, the neighbors would not have even been aware that the house was auctioned off.
Our appraisal made me aware of the hidden value in that the property retained it’s grandfathered building permit. I am pleased over the turn of events. The 12:1 return on mortgage debt had a happy ending. It allowed the owner to return to his native Germany for retirement, with money in his bank account, and fond memories of Canada.


Christopher Molder

Mortgage Broker

Christopher is a mortgage broker based in Toronto, Canada. And a son of a broker too. He’s a second generation mortgage broker. Following in his father’s steps he joined the family mortgage business straight out of university.