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

A new report has found a vulnerable senior in 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 concerns meant she needed help to submit the payments.

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

At the time, the home was assessed at $420,000.

"What happened to Ms. Wilson is tragic," wrote provincial ombudsperson Jay Chalke in 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 outstanding property taxes in B.C., Chalke said, namely the fact that it is a life-altering, complicated process that can leave 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.

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 home and became responsible for paying the property taxes. 

She didn'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 collect outstanding property taxes by selling the house at auction two years after the taxes 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 dozen notices about her unpaid bills between June 2015 and September 2017, but the report found some weren't clear and several had outright mistakes such as the wrong deadline for payment.

Critically, it found, the city didn't tell Wilson her home would only be 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.

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.