How much is too much?
That is the question County of Barrhead councillors asked themselves at their Nov. 5 meeting when deciding what to set the reserve for at a Dec. 4 public auction.
The auction will see the county sell five properties to recoup 2017 and 2018 property taxes owed.
County manager Debbie Oyarzun noted the property owners have right up to the time of auction to get their accounts up until date.
A reserve is a minimum price a seller is willing to accept for an item. Under the Municipal Government Act (MGA) a reserve must be set close to market value.
Later in the meeting councillors accepted the assessor’s reserve recommendations for the public auction.
Coun. Walter Preugschas asked what happens to any extra monies received over and above any property tax and penalties owed.
“[Hypothetically] if a property sells for $75,000 and the property taxes are worth $10,000, would they get the remainder?”
Oyarzun said it would depend.
“There is a process that we have to go through,” she said, noting there is a pecking order to get any monies owed. “The province gets any money owed to them first, then us, followed by secured creditors, then if there is anything left, the property owner.”
Coun. Darrell Troock asked whether the county researched what monies are owed before or after the county needs to set the reserve bid.
Oyarzun said they looked at it before, but whether or not any other monies are owed, it does not impact how much they need to set the reserve bid for.
“It is two separate functions,” she said. “Our reserve bid goes through our assessor and he goes through his normal process in determining what that property is worth.”
Troock said he was concerned that the assessor would set the reserve too high and they would become stuck with a property that is difficult to dispose of.
“Is there any way we can knock these prices down?” he asked.
Oyarzun said it might be possible but not without the assessor being part of the process.
She explained the reason why the MGA requires that property be sold at near-market prices is to prevent a fire sale.
“It is to protect the other creditors,” Oyarzun said.
Troock then asked what type of process did the assessor go through in determining the value of potential public auction properties.
“In my mind, if you are going to have a tax sale, it has to be priced as a tax sale,” he said, adding he believed the prices to be on the high side.
Troock added that in his time on council he can›t recall one time a property ever sold at a public tax auction.
Under regular circumstances, he said the assessments might be accurate, but in a soft economy as the region is experiencing, he wasn’t so sure.
Troock also said they had to fight the connotation a tax-sale has, noting many people relate the term with “run down or unmaintained.”
“I know when I’m looking for a property, I won’t look at one from a tax sale unless it is a smoking deal,” he said.
