Ombudsperson's report finds city sent unclear tax notices and failed to determine 'vulnerable' woman needed help to pay
A vulnerable senior in Penticton, BC, lost her home and hundreds of thousands of dollars in home equity after the city sold it over unpaid property taxes totalling just $10,000.
The case was outlined in a provincial ombudsperson's review published Wednesday, which explained that the woman, anonymized as Ms. Wilson, once lived in the house with her mother who died in 2013.
As reported by CBC News, Wilson moved into the house thereafter, and assumed responsibility for paying the property taxes. While she had the financial means to pay the taxes, the ombudsperson’s report said she didn’t pay in 2015 or 2016 because health concerns left her "in a disadvantaged position" and "unable to take steps on her own" to manage those obligations.
In B.C., municipal governments have the authority to collect on outstanding property taxes by selling the house at auction two years after the taxes were first due. The starting bid is calculated by taking the amount of the unpaid taxes and adding interest, penalties, and some fees, without regard to the home’s actual value.
Even though the city sent Wilson nearly a dozen notices between June 2015 and September 2017, the ombudsperson determined that it didn’t clearly communicate what she stood to lose. Some notices, the review found, weren’t clearly written, while others contained flat-out mistakes like stating the wrong payment deadline. The gravity of the situation wasn’t emphasized, the report added, as the city failed to tell Wilson her home would be listed at auction for a fraction of its actual value.
"The inadequate, inaccurate and inconsistent descriptions of the tax sale process in the City of Penticton's correspondence with Ms. Wilson made the process unfair," wrote provincial Ombudsperson Jay Chalke.
The city also fell short, the review found, because it didn’t take steps to determine if she needed help before auctioning off her house in September 2017; even though it was assessed at $420,000 at the time, the highest bid was $150,000. The winning bidder took over the house in 2018 once the one-year grace period for Wilson to pay had passed.
According to the report, police were called in to escort Wilson out of the house. Following the sale, she received a net payout of $138,154 from the city; less than two years later, another owner sold the house for $498,000.
“One simple telephone call ... could have resulted in an entirely different outcome in this case." Chalke said. “A vulnerable 60-year-old woman was evicted from her home and lost at least $270,000 of the equity in her property.”
Chalke recommended the city compensate Wilson for some of her lost equity by paying her $140,922, but it declined.
"This is a most unfortunate situation,” the city said in letter published along with the report. “[I]t is important to bear in mind that city staff had no information to suggest that [Wilson] was a vulnerable person in need of support or assistance until after the conclusion of the tax sale process.”
The city has introduced changes to improve its property tax notices, it said.
