Tax Arrears - Extension Agreement
The Corporate Services Committee recommends the adoption of the following report
(May6, 1999) from the Chief Financial Officer and Treasurer:
Purpose:
To obtain Council authority to enter into an extension agreement pursuant to the provisions of
the Municipal Tax Sales Act and for the introduction of a Bill and passage of a By-law
authorizing the extension agreement.
Financial Implications:
None.
Recommendations:
It is recommended that:
(1)authority be granted to enter into an extension agreement with Aldwyn Investments Inc.
extending the redemption date to December 31st, 1999;
(2)authority be granted for the introduction of the necessary Bill in Council and passage of a
By-law authorizing the extension agreement, in accordance with the provisions of the
Municipal Tax Sales Act; and
(3)the appropriate City officials be authorized and directed to take the necessary steps to
give effect to the foregoing.
Background:
Aldwyn Investments Inc., the owner of the property municipally known as 501 Alliance
Avenue, has requested an Extension Agreement pursuant to the provisions of the Municipal
Tax Sales Act. The property has been the subject of litigation concerning Aldwyn's ownership
of the lands, following a purchase in November, 1997. The litigation was only resolved on
March 15, 1999, almost one and one half years after Aldwyn purchased the property.
The last date of redemption on this property is June 11, 1999. The property owner is not in a
position to pay the cancellation price on or before this time. As a result of settling the
litigation, Aldwyn is now in a position to move forward with leasing the property and has
requested an extension of the period to pay the amount owing to December 31, 1999.
Discussion:
The Municipal Tax Sales Act allows for a Tax Arrears Certificate to be registered on title
when taxes are outstanding for any part of three years. On June 12, 1998 a Tax Arrears
Certificate was registered against the above property as taxes from 1995 to 1998 inclusive
were outstanding.
At the time of the registration, the outstanding balance including all interest to December 31,
1997 was $1,165,059.56. The balance owing at the expiry of the one year term, being June 11,
1999, is $1,755,997.56. The proposed extension agreement requires repayment of the tax
arrears in the full amount outstanding on or before December 31, 1999, which will be
approximately $2,050,700.00. By this extension of time, the full 1999 tax levy will have been
levied and pursuant to the Municipal Act, is due and payable, along with any additional
registration costs or other charges that may be lawfully added to the taxes.
The Municipal Tax Sales Act permits a municipality to enter into an extension agreement with
the property owner, subject to terms and conditions relating to payment as may be set out in it,
but it cannot reduce the amount of the cancellation price, or prohibit any person from paying
the cancellation price at any time. If the agreement is not fulfilled by the owners, then the
lands are to be sold by the municipality.
The owner is presently negotiating with several qualified prospective tenants and anticipates
that within the next few months, a bonafide lease for the majority of the building can be
arranged. Following that, improvements are needed to upgrade the building to a standard
acceptable to City building officials, which will take 3 to 4 months. Once the property is
upgraded and leased, Aldwyn expects to be in a position to pay the cancellation price.
Aldwyn owns five other properties within the City of Toronto, with all the taxes on these other
properties presently paid up-to-date.
Conclusion:
Allowing an extension of the redemption period to the owner of 501 Alliance Avenue under
the present circumstances is fair and reasonable, and is in the best interest of both the city and
the owner.
Contact Name:
Margo L. Brunning,
Manager, Collections/Receivables, Payments
and Regional Customer Services
Phone No:(416) 395-6789
Fax No: (416) 395-6703
Internet email address: mbrunnin@toronto.ca.
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Authority:Corporate Services Committee
Report No.
Date:
Intended for first presentation to Council:
Adopted by Council:
BILL NO:
CITY OF TORONTO
The Council of the City of Toronto HEREBY ENACTS as follows:
1.The City of Toronto be authorized to enter into an agreement with Aldwyn Investments
Inc., the owner of the land described as Part Lot G, Plan No.5098, being in the City of
Toronto, in the Land Registry Office, against which land the City registered a tax arrears
certificate on the 12th day of June, 1998, to extend the time period in which the cancellation
price payable on this land is to be paid until December 31st, 1999.
2.The agreement shall be substantially in the same form and contain terms and conditions,
subject to such amendments as may be required by the Chief Financial Officer and Treasurer
and City Solicitor, as set out in Schedule 'A' attached hereto and forming part of this By-Law.
3.This By-Law shall become effective as of June 10th, 1999.
ENACTED AND PASSED this day of June, A.D. 1999.
MEL LASTMAN,NOVINA WONG,
MayorCity Clerk
(Corporate Seal)
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Schedule 'A'
THIS AGREEMENT made in duplicate this day of June, A.D., 1999.
BETWEEN:
CITY OF TORONTO
hereinafter called the "City"
OF THE FIRST PART
- and-
ALDWYN INVESTMENTS INC.
hereinafter called the "Owner"
OF THE SECOND PART
WHEREAS the Owner is the owner of the land in the City of Toronto described as the Part
Lot G, Plan 5098, in the City of Toronto (the "Owner's Land"), as set out in Instrument
No.CA543908 registered in the Land Registry Office for the Registry Division.
AND WHEREAS there arrears of taxes in respect of the Owner's Land on the 31st day of
December, 1997 in the amount of $1,165,059.56 and a tax arrears certificate was registered in
the Land Registry Office, as set out in Instrument No. CA 543908, on the 12th day of June,
1998.
AND WHEREAS the arrears of taxes in respect of the Owner's Land on the 1st day of April,
1999 were in the amount of $1,718,796.13;
AND WHEREAS under section 8 of the Municipal Tax Sales Act, R.S.O. 1990, c. M.60, a
municipality may by by-law passed after registration of a tax arrears certificate authorize an
extension agreement to be entered by the municipality with owners to extend the period of
time in which the cancellation price is to be paid;
NOW THEREFORE THIS AGREEMENT WITNESSES that, in consideration of the
premises and of the covenants and obligations hereinafter contained, it is hereby agreed as
follows:
1.The parties agree that the period of time in which the cancellation price is to be paid shall
be and is hereby extended to December 31st , 1999, providing the Owner is not in default
hereunder.
2.Despite any of the provisions of this agreement, the Municipal Act, R.S.O. 1990, c. M.45,
as amended, and the Municipal Tax Sales Act, R.S.O. 1990, c.M.60, as amended, shall
continue to apply to the collection and enforcement of all tax arrears and all taxes with respect
to the Owner's Land, except that the Treasurer and the collector of taxes of the City without
waiving the statutory rights and powers of the City or the Treasurer, agree that the City shall
not enforce collection of such tax payments by the sale of the Owner's Land, during the time
that this agreement is in force, so long as the Owner is not in default hereunder.
3.The Owner agrees to pay the City the sums indicated in Appendix 1 attached hereto and
forming part of this Agreement in the manner indicated thereon.
4.In the event that the Owner sells the Owner's Land prior to December 31, 1999, the
balance of the cancellation price shall become immediately due and payable on the business
day immediately prior to the date of closing of the sale.
5.In the event that the Owner defaults in any payment hereunder or is in default of any
covenant or condition hereunder, this agreement shall cease to be considered a subsisting
agreement for the purposes of Sections 8 and 9 of the Municipal Tax Sales Act.
6.Despite the provisions of paragraph 1, the Owner, or any other person, may on or before
December 31st, 1999, pay the balance of the cancellation price and, upon receipt of the said
payment by the City, this agreement shall terminate and the Treasurer shall forthwith register a
tax arrears cancellation certificate.
7.In the event that the cancellation price is not paid by 1:00 p.m. on December 31, 1999, this
agreement shall terminate. The Owner will not object to the sale of the land by the City and
shall consent to any court orders necessary to permit the City to sell the said land, and the
Owner agrees to be bound by this Section 7 notwithstanding the termination of this agreement.
8.This agreement shall extend to and be binding upon and enure to the benefit of the parties
and to their respective successors and assigns.
9.Any notice to be given to the parties hereto shall be sufficiently given if sent by registered
or certified post to the following addresses:
to the City:
City of Toronto
Finance Department
5100 Yonge Street
North York, Ontario M2N 5V7
Attention: Ms. Margo L. Brunning
Manager, Collections/Receivables, Payments
and Regional Customer Service
to the Owner:
Aldwyn Investments Inc.
70 Wingold Avenue
North York, Ontario M6B 1P5
In WITNESS WHEREOF the parties have affixed their Corporate seals attested by the hands
of their respective officers in that behalf, as of the day and the year first above written.
CITY OF TORONTO
per:______________________c/s
W.A. Liczyk
Chief Financial Officer and Treasurer
per:________________________
Novina Wong
City Clerk
ALDWYN INVESTMENTS INC.
per:_______________________c/s
Owner
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Appendix "1"
Calculation of Payment Required
Under Extension Agreement
Amount
1.Outstanding taxes, penalty and interest
charges on Tax Arrears Certificate
(to December 31, 1997)$1,165,059.56
2.Additional taxes levied and interest charges
subsequent to tax sale proceedings (includes
1999 interim levy and estimated 1999 final levy)
(January 1, 1998 - December 31st, 1999)$ 885,640.44
Total Amount to be Paid
Under Extension Agreement$2,050,700.00
To be Paid as Follows:
1.1 payment to the Treasurer, City of Toronto, by certified
cheque on or before 1:00 p.m. on December 31st, 1999$2,050,700.00
$2,050,700.00
