New Framework for Forfeited Corporate Property to Take Effect

On December 10, 2016 new rules for managing forfeited corporate property will take effect. The new rules are the result of consultations with the municipal sector that have been taking place since 2012. Highlights of these changes can be found below. The new framework will be implemented through the Forfeited Corporate Property Act (2015)  and the Escheats Act (2015), as well as through amendments to 23 other pieces of legislation including the Municipal Act.

Key highlights of changes:

  • Setting out the sole jurisdiction of the Minister over forfeited corporate property, which is defined as:
    • Real property and interests in real property that have forfeited upon dissolution of a corporation
    • Personal property and interest in personal property that have forfeited upon dissolution of a corporation, that is located in, on or under the forfeited corporate real property or that is necessary to administer the real property or ongoing operations/business on the real property
    • Personal property that has been left in, on or under forfeited corporate real property regardless of who owns it
  • Providing new management powers to the Minister, such as:
    • Collecting necessary information
    • Appointing a receiver-manager
    • Addressing interests that encumber forfeited corporate property (such as mortgages or liens)
  • Giving the Minister broad disposition powers, such as:
    • Relief from forfeiture
    • Transferring certain properties by order
    • Transferring charitable property to another charity
  • Allowing the Minister to determine amounts owing to the Crown and recover its costs, including:
    • Through a lien on the property
    • By making an application to the Court to require responsible former officers and directors of business corporations to pay the costs
    • From the proceeds of a sale of the forfeited property
    • Limiting the liability of the Crown when managing forfeited property

Amendments to the Municipal Act & City of Toronto Act:

  • Providing notice in relation to the tax sale process to the Minister responsible for the Forfeited Corporate Property Act, where a municipality is aware that the property is forfeited corporate property
  • Providing that no tax arrears certificate may be registered if an order cancelling encumbrances under the Forfeited Corporate Property Act, or a notice that the Crown intends to use the forfeited corporate property for Crown purposes has been registered, unless the Minister responsible consents
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