The City of Toronto’s Ombudsman says it is only fair that the City repay a senior citizen $462,000 it got from the sale of his house.
The City sold the senior's house in 2013 to recover unpaid property taxes. Under the City of Toronto Act, 2006 he had a year to claim the surplus of $462,000, but he made no effort to claim it until this spring, three and a half years after the sale.
After the City told the senior he could not get his money back, he complained to Ombudsman Toronto. Ombudsman Susan Opler started an Enquiry into the case.
"It is unclear,” says Opler, “why he did not respond to City notices telling him that his property taxes were overdue, that it was going to sell the house to recover them, and that he could claim the funds left over after the house was sold. His mental health, a lack of understanding of his rights and obligations, and/or a simple inability to cope may explain his inaction."
The senior has now used up his savings and is facing eviction because he is unable to pay his rent.
The Ombudsman found that City staff did everything they were supposed to do under the law to notify the senior, including making personal visits to try to contact him. When there was no response, the City eventually took the $462,000 into general revenues, as it was legally entitled to do.
The Ombudsman is nevertheless recommending that the City return the funds to the senior citizen. "Now that he has come forward to claim the money and given his vulnerable circumstances, basic fairness and the principles of equity demand that the City return the surplus to him."
Opler points out that the law on claiming surplus funds from tax sales could be about to change. “The province has passed legislation, not yet enacted, that would give homeowners ten years to claim the surplus proceeds of a tax sale, instead of the one year time period that currently exists.”
Ombudsman Toronto is recommending that at its October meeting, City Council direct the City’s Chief Financial Officer (CFO) to immediately pay the surplus back to the senior citizen.
The Ombudsman's recommendations are supported by the CFO, the City Treasurer and its Director of Revenue Services.
Copies of the Enquiry Report and an Ombudsman Toronto backgrounder are also available on request.
For more information or to arrange interviews, contact:
Ombudsman Toronto listens to and investigates people’s complaints and concerns about City administration and the fairness of City services. We are a free and impartial office that operates independently from the City, holding it accountable to the people it serves.