Penticton to compensate woman, 60, whose house was sold at tax sale, though the city maintains no wrongdoing

Photo: Castanet Staff

"We didn't do anything wrong."

Penticton city council has apologized to and will pay $140,000 to a "vulnerable" woman whose home was sold in a 2017 municipal tax sale, though the apology came with a caveat — mayor and council say this is a matter of "compassion," not an admission of wrongdoing on the city's part.

Instead, council places the blame squarely on provincial shoulders, maintaining the municipality followed all legislation properly and that perhaps those laws and guidelines need to be amended.

Ombudsperson Jay Chalke publicly chided the city earlier this month. The independent fairness watchdog published results of its lengthy investigation on Dec. 8, detailing the case of a 60-year-old woman identified as "Ms. Wilson" and labeled "vulnerable," whose "personal challenges" made it difficult to pay her $10,000 late property tax bill, despite having the money to do so.

Her failure to pay meant the City of Penticton sold it at a tax sale auction for $150,000, less than half of the assessed fair market value at the time of $420,000. She was later evicted by the new owner, and lost out on approximately $270,000 in equity in the sale, prompting her sister who held power of attorney to contact the Ombudsperson.

At a special council meeting Tuesday, staff shared the city's side of the story. Some of the information in their correspondence during the multi-year ombudsperson investigation is protected under the Freedom of Information and Privacy Act, they explained, to protect Ms. Wilson's identity.

Staff noted that Ms. Wilson was provided annual tax notes in the mail, as well as written statements of outstanding taxes, and two notices of tax sale, all as per provincial regulations.

Following the tax sale in September 2017, she was sent a notification via registered mail. A property owner has one year from the date of a tax sale to rectify the money owed before the sale is finalized.

The Ombudsperson's report reads in part that the city should have done more than make one phone call to Ms. Wilson after the sale — but the missing side of that, says the city, is that on that phone call, staff were specifically asked not to call back.

The question of determining whether a taxpayer is "vulnerable," or in some way incapacitated and in need of outside help following a tax sale should not fall to city staff, the city says.

"The Ombudsperson's conclusion is that the family member had no reason to be concerned about Ms. Wilson's capacity, but that the city, based solely on the fact that the taxes were unpaid, ought to have considered whether the property owner was vulnerable and in need of assistance," said acting GM of finance and administration Angela Campbell.

Despite misgivings, council voted to adhere to Ombudsperson Chalke's recommendation that Penticton pay Ms. Wilson $140,922.99, approximately one-half of her lost equity. The city had previously refused.

Coun. Campbell Watt was the sole opposing voice, having expressed his concerns at the precedent.

"Do I want to pay $140,000 for it knowing that someone was called and told 'Don't call me back again?' I'm not sure that I do. And I guess I just want to make sure that doesn't get misinterpreted that I [don't] feel for Ms. Wilson, and I wouldn't like Ms. Wilson to be compensated. But at the end of the day, it's coming out of taxpayers' pockets and that's certainly where I'm not feeling okay with it," Watt said.

Mayor John Vassilaki maintained his apology on behalf of the city was not an admission of wrongdoing.

"We're just being compassionate ... We didn't punch her in the face, we didn't do anything like that. We just apologize for what happened. That wasn't our fault. It's the provincial government that guides municipalities as to what to do. And we just follow the process," Vassilaki said, later adding:

"We just want to put this behind us ... we just want to pay the lady, Ms. Wilson, what was ordered ... we just want to get it over and done with and go on with city business to try to get us as a city out of the situation we're in at the present time with COVID and all the other economic issues that we have in the community."

The $140,922.99 will come from as-yet unspecified "administrative savings," according to Campbell.