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Report urges tax sale changes after B.C. woman loses home and $270,000 in equity

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VICTORIA — The auction sale of a vulnerable British Columbia woman's home at well below its assessed value of $420,000 over a $10,000 property tax bill is prompting a call for change from the provincial ombudsperson. 

Jay Chalke said Wednesday that results of his investigation into the case were "disturbing," and his report called for significant changes in the way municipalities in B.C. use such sales to collect outstanding property taxes. 

The report, "A Bid for Fairness," says the 60-year-old woman had the money to cover the tax bill but her personal challenges made it difficult to pay and the City of Penticton sold the home in 2017 for $150,000, costing her about $270,000 in equity.

The woman is not named in the report, which refers to her with a pseudonym. 

Police were called to remove the woman from the home when the final sale completed in 2018, the report says. 

Chalke makes six recommendations, including that the provincial government change the Local Government Act to require municipalities to develop plain-language notices to property owners about tax sales and develop guidelines for local governments to protect people at risk of losing their homes. 

The recommendation that Penticton compensate the woman for about half her loss was rejected by the city, the report says. 

"Really, the idea is to set up a system so that municipalities can collect their taxes, but at the same time, a situation like this, the chances of it happening again, are significantly reduced, and that's the idea of our recommendations," Chalke said in an interview.

The investigation found inaccurate, inconsistent and inadequate descriptions of the tax sale process in correspondence with the woman from the City of Penticton, he said.

The city also did not take meaningful steps in the year between the auction and the closing date in 2018 to ask whether the woman might need help with her challenges from health or other protective authorities, Chalke said.

"The statutory scheme in the Local Government Act and the Community Charter that authorizes the use of tax sales to collect delinquent property taxes is unjust," says the report.

The City of Penticton said in a statement it disagrees with the report's findings and its legal counsel will contact the ombudsperson's office to better understand why some details about the city's position were not included in the final report.

"The City of Penticton fully recognizes the seriousness of the situation and the impact the loss of the (woman's) home through the tax sale process had on her," chief administrative officer Donny van Dyk said in a statement.  

"This is a most unfortunate situation but ... city staff were unaware that (the woman) was a vulnerable person in need of support or assistance until after the conclusion of the tax sale process," he said.

B.C.'s advocate for seniors Isobel Mackenzie, who released a separate report Wednesday calling for a provincewide approach for reporting seniors abuse, said more openness about issues facing seniors could have prompted Penticton to find other ways to address the woman's tax issues.

"Broader education may have allowed the City of Penticton to realize perhaps there should have been some outreach to the designated agency or the (Public Guardian and Trustee of B.C.) prior to the actions they took," she said.

B.C.'s Public Guardian and Trustee is an independent body that protects those who cannot protect themselves. 

Penticton's statement said the city looks forward to working with the provincial government and other stakeholders "about the development of best practice guidelines and amendments to the tax sale legislation."

The Ministry of Municipal Affairs said in a statement people deserve to be treated fairly and it appreciated the investigation into the property tax sale matter.

"The ministry has already been working with the Office of the Ombudsperson to identify how the municipal tax sale process can be improved to support local governments to prevent situations like this one from happening in the future in any municipality in B.C.," it said.

The ministry said in a reply to Chalke on Oct. 6 thatit accepts the report's recommendations "in concept" and will consult widely, but could not determine the timing of the government's legislative agenda.

This was Penticton's third case of lost property due to a tax sale in its recent history, said Chalke.    

This report by The Canadian Press was first published Dec. 8, 2021.

Dirk Meissner, The Canadian Press

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