'Vulnerable' B.C. senior loses home, hundreds of thousands in equity after city sold house over unpaid taxes

A new report has found avulnerable seniorin Penticton, B.C., lost her home and hundreds of thousands of dollars in equity after the city auctioned off her house for a third of its assessed value over just$10,000 in unpaid property taxes.

The provincial ombudsperson's review published Wednesday found the woman, referred to as Ms. Wilson, had the money to pay off her taxes, but health concernsmeant she needed help to submitthe payments.

The city, it said, didn't communicate clearly with Wilson about what she stood to lose and didn'tmake an effort to find out if she needed help beforeproceeding tosell her house for $150,000 in 2017.

At the time, the homewas assessed at $420,000.

"What happened to Ms. Wilson is tragic," wrote provincial ombudspersonJay Chalkein the report. "One simple telephone call ... could have resulted in an entirely different outcome in this case."

The story exposed a number of problems in the laws around tax sales to recover outstandingproperty taxes in B.C., Chalke said, namely the fact that it is a life-altering, complicated process that canleave homeowners at a crushing disadvantage if communication isn't clear.

In a statement to CBC, the city said it disagreed with the report's findings about its staff.

Trouble begins with unpaid taxes

Wilson, whose name was changed for the report, once lived in the house with her mother. After her mother died in 2013, Wilson stayed in the homeand became responsible for paying the property taxes.

Shedidn't pay in 2015 or 2016. The report did not provide specifics to protect confidentiality, but said she did not make the payments because she was "a vulnerable member of the community in a disadvantaged position" who was "unable to take steps on her own" to manage those bills.

In B.C., municipal governments can collectoutstanding property taxes by selling the house at auction two years after thetaxes were first due. The minimum bid at auction is only the amount of the unpaid taxes, interest, penalties and some fees no matter the actual value of the home.

The city sent Wilson nearly a dozennotices about her unpaid bills between June 2015 and September2017, but the report found some weren't clear andseveralhad outright mistakes such asthe wrong deadline for payment.

Critically, it found, the city didn't tell Wilson her home would onlybe listed at auction for a fraction of what it was worth which would have stressed the magnitude of the issue.

"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," the report said.

Police removeWilson from her home

Wilson's home sold for $150,000 at the auction in September 2017. The highest bidder took over the house in 2018, after the one-year grace period passed without payment from Wilson.

The police were called to take Wilson out of the house, the report said.The ombudsperson launched aninvestigation after Wilson's family, who had been unaware of the tax dispute, filed a complaint with the office.

Wilson received a net payout of $138,154 from the city after the sale.

Less than two years later, another owner sold the housefor $498,000.

"A vulnerable 60-year-old woman was evicted from her home and lost at least $270,000 of the equity in her property," the report said, in summary.

"As a result, she no longer had financial security or the independence that comes from home ownership all because of about $10,000 in property tax debt, which she had the resources to pay."

Chalke described it as a "devastating and preventable loss."

City declines to compensate Wilson

Chalke recommended the city pay Wilson$140,922to compensate her for some of the equity she lost.

It declined.

"This is a most unfortunate situation but from the city's perspective it 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," saida letter from the city included in the report.

The city said it has made changes to improve its property tax notices, but said it gave Wilson the level of noticerequiredby law. It disagreedthat staff should have tried to check whether Wilson needed help.

Finally, the report calledfor significant changes to the way municipalities in B.C. use such tax sales.

Chalke saidthere isn't aconsistent set of guidelines for municipalities to follow for a tax sale and the "interests of vulnerable individuals are not adequately considered."

He recommendedthe provincial government review and change the Local Government Act to require municipalities to develop plain-language notices to property owners about thesales and develop guidelines for local governments to protect people at risk of losing their homes.

The City of Penticton's letter said it would "welcome" those changes. The provincial Ministry of Municipal Affairs accepted all of the recommendations.