Federation Council conducted the Sale for Rates auctions on August 17 and 24, 2019 at which 17 properties were sold at auction, with three properties being sold by private treaty after the auction.
As a result, $364,867 in outstanding rates and charges has been received by Federation Council and $10,891.14 is required to be written off.
Council conducted the sale of properties where rates and charges remained unpaid for more than five years, in accordance with Section 713 of the Local Government Act 1993.
At the time of deciding to proceed with this course of action there were 36 properties with a total of $375,759 outstanding in rates and charges.
Prior to the auction, 12 property owners paid their outstandings in full ($165,118) and one property was withdrawn as the bank was proceeding with foreclosure of the property.
Three properties did not proceed to auction and still have outstanding rates and charges owing. Section 719 of the Act provides that where the net available purchase monies (after costs incurred by council in connection with the sale) are not sufficient to satisfy all outstanding rates and charges then Council must write off any outstanding amounts as the purchaser purchases the property free from encumbrances.
Similarly Section 720 of the Act provides that where the net available purchase monies - after costs incurred by council in connection with the sale and outstanding rates and charges have been paid - any balance of the purchase money must be paid into council’s trust fund and held by council in trust for person/s having estates or interests in the land immediately before the sale according to their respective estates and interests.
Council may pay the balance of the purchase money or any part of the balance to or among the persons who are, in its opinion, clearly entitled to it, and the receipt of the person to whom any payment is so made is an effectual discharge to the council for it.
With all properties included in the sales now transferred to the purchasers council must now complete the allocation of any balance of purchase monies to either council’s trust account or to persons who have an interest in a property.
The funds available to distribute to those with an interest prior to the sale totals $106,483.44. Of this, $77,774.57 is required to be transferred to the Australian Securities and Investment Commission (ASIC) as the properties (four in number) were held by corporations. The remaining $28,708.87 is required to be held in trust by council until those with an interest in the land prior to the sale come forward (six properties).
There were inadequate proceeds on 10 properties to cover the outstanding rates and charges. As a consequence a total of $10,891.14 of rates and charges is required to be written off in accordance with Section 719 of the Act.