CALGARY- They only received the keys to their new condos a year ago, but some new homeowners have already been hit with a big bill.
The building in Bridgeland was finished in April 2013, and was transferred from Bucci Developments to the condo owners. The developer gave them a credit for the taxes to cover the first four months of the year, and expected owners to be billed for the rest.
However, the city sent the bill to the developer instead, and it was never paid—meaning the owners are now on the hook for both the tax bill and late payment penalty.
“We turned around to the city and said ‘look, we’ve given the homeowners our share of taxes, they now own the property, you should send the bills directly to them,” explains Bucci Development VP Mike Bucci. “The city said ‘that’s not our standard procedure.’”
The CFO for the City of Calgary says it was a case of standard procedures not being followed.
“It’s been our experience that in virtually all cases what happens is the developer pays the taxes, and then as part of the real estate close they settle up on how many months the developer owned the property versus how many months the purchaser owned the property,” says Eric Sawyer. “But in this case it didn’t happen that way.”
He adds it’s important that both parties understand their financial obligations.
“In any real estate transaction, you want to get a tax certificate to know the outstanding taxes on the property and any previous property that was split into it, and as well have a clear understanding of who owes how much of the taxes and who’s going to pay.”
The area councillor will be asking city council to waive the late payment penalty due to the misunderstanding. The case is also being reviewed to try and prevent similar problems in the future.