Municipal Cash Grab and Politics

Welsh Law Asset Protection and Creditor Proofing

This is largely an editorial opinion, but it is founded upon an actual case.

In 1998, sister (a doctor) and brother (an engineer), recent Canadians, acquired ½ of a duplex in Oakville, Ontario. Neither alone could, at that time, float the mortgage necessary to acquire their new home. Success followed and they acquired the other half of the duplex two years later. Sister and her direct family occupied ½ and brother, with his direct family, occupied the other half. The 2 houses, were, in reality just that: 2 houses and the title to both properties was in brother and sister as Joint Tenants in order to accommodate mortgage financing utilizing their combined incomes for credit approval.

Then an obtuse “catch-22” arose: By changing the titles (without anything else occuring) the two previously segregated and separate titles were deemed “merged” under the Planning Act (Ontario). The result was that neither sister (relative to her house) nor brother (relative to his house) could do anything with his or her own property without the other also being included. And that was notwithstanding that the two houses had separate and distinct titles at the time they acquired ownership.

The catch-22 was that the Town of Oakville by-law which had originally separated the two houses expired. The transfer of titles in 2006 occurred after the expiry of the by-law that had been in force when they acquired title which made the two houses, albeit townhouses, separate and distinct. No Plan of Subdivision had been registered by the builder of the houses prior to 1998.

The brother and sister paid their property taxes and their utilities separately metered and charged in all of the years up to 2012 (and still do).

The dilemma cried out for the Mayor and the municipal councillors to simply pass a by-law to confirm exactly what had existed in 1998 such that brother would have his house and sister would have her house. They refused to do so.

The only choices: an Application to the Town for a severance of two properties that had always been severed at a cost of approximately $13,000 or an Application for Part Lot Control Exemption at a cost of about $6,500. In all the time, the brother and the sister had paid their taxes and had separately resided in the two properties, admittedly separated only by a common wall between the two different houses. No additions were made, no pools added, no garages added, no decks added. The houses were exactly as they had been in 1998.

The Town determined that it would only address the issue by way of either a severance application or an application to exempt the properties from part lot control. In either case, at a cost between $6,500 and $13,000. The whole matter could easily have been resolved by the Town Council simply stating that the brother and sister were caught in the vortex of a Provincial law that had no intention of application to their particular case.

Accordingly, at a cost of approximately $6,500, brother and sister are making application to the Town to do what had always existed. In fact, notwithstanding solicitations to the Town to regularize this indescriminate application of disadvantageous Provincial legislation, the Town definitively states that this is a “taxing” issue and they want to collect their money before they agree that exactly what the brother and the sister had originally acquired is exactly what they have today.

To us, this is the ultimate in red-tape and bureaucracy gone mad and should not be permitted, but the law clearly indicates there is no choice but to pay the money to obtain exactly what they had always had and always intended to have.

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