Penticton's Tax Sale tempest will make for a note of reflection for other municipalities in BC

Across British Columbia municipal governments and their elected councils are no doubt watching the fascinating amount of fury currently being directed towards the City of Penticton.

That after the city made use of it's Tax Sale powers to evict a homeowner and sell the property at a distressed price as a result of outstanding property taxes.

The process one which is available to all BC municipalities each year, makes for the Fall Time notice of properties on the arrears list and the annual Tax Sale that follows.

In the Penticton case, the outstanding property taxes were 10,000 dollars, with the city then selling the property owner's house for 150,000 dollars well below the assessed value of 420,000 dollars.

However, a report from the BC Ombudsperson is casting some significant concern over how the City of Penticton handled this particular issue, which resulted in the loss of a home by a vulnerable sixty year old woman in the community.

“The results of this investigation are disturbing. Ms. Wilson was a vulnerable member of the Penticton community and just needed some extra assistance to pay her taxes. The City of Penticton called Ms. Wilson once but did not contact the Public Guardian and Trustee or Interior Health who have the legal mandate to make inquiries as to whether an adult is vulnerable and needs support or assistance. The city’s failure to reach out to one of these helping organizations contributed to a devastating and preventable loss.” -- BC Ombudsperson Jay Chalke

The 42 page report titled A Bid For Fairness (available here) provides both the specifics of the Penticton situation, as well as a review of the process of Municipal Tax Sales and some of the areas where improvement is needed.

An accompanying infographic providing some additional notes to the topic.

The Report comes with Six Recommendations both specific to the Penticton issue and informative for other communities in the province. 

Develop plain language template letters for tax sales; 

Develop guidelines to notify a property owner before a tax sale occurs; 

Amend the Local Government Act to require a municipality to provide notice by registered mail or personal service before a tax sale; 

Examine whether the Local Government Act should establish a starting price at auction that reflects the assessed value of a property; 

Issue best practice guidelines about how municipalities are to protect vulnerable property owners within the tax sale scheme; and, 

Compensate Ms. Wilson in the amount of $140,922.88. 

The Ombudsperson's Office notes that the Ministry of Municipal Affairs has accepted all five recommendations. 

However, the City of Penticton has rejected the Ombudsperson’s recommendation. Issuing their statement on Wednesday that disagreed with the findings.

The City of Penticton's response to a report on a recent Tax Sale
by the BC Ombudsperson
(click to enlarge)

The decision not to accept his guidance something that has left the BC Ombudsperson somewhat disappointed.

“I am disappointed that the City of Penticton is not taking responsibility for both the multiple errors and omissions it made in its communication with Ms. Wilson and the insufficient action it took to help her get the assistance she needed. I am calling on the city to realize the gravity of this situation for this vulnerable member of its community and compensate Ms. Wilson as I have recommended. It’s never too late to do the right thing.”

The City of Penticton has found itself at odds with provincial representatives a few times in the last year, with the City and BC Housing officials not on the same page when it comes to a homeless shelter in the community.

That dispute even brought BC Housing Minister and Attorney General David Eby into the fray, to speak to the issues of the South Okanagan. 

A topic of municipal/provincial disagreement which made for some conversation among UBCM members as well.

However the current tempest ends, one thing is certain, when the annual Tax Sale Season arrives in the fall of 2022, the guiding principle for Mayors and Councils everywhere will be to ensure that they  "Don't do a Penticton".

Taxation themes for Prince Rupert can be explored from our archive page here.

Notes from the Legislature and the Provincial government can be reviewed here.

Cross posted from the North Coast Review.