Kempsey Shire Council's auction of properties with unpaid rates has proven a win for the community and ratepayers.
Council received a report at its December ordinary meeting which noted that the public sale conducted by Kempsey Stock and Land on 29 November 2022 at Kempsey-Macleay RSL Club featured 20 properties put up for auction, with 17 selling under the hammer for amounts ranging from $130 to $420,000.
At its meeting on 15 March 2022, Council resolved to proceed to sell 27 properties due to unpaid rates.
This was considered the option of last resort where other recovery actions had been pursued and were unsuccessful, resulting in a debt on Council's books and an unfair burden on the majority of ratepayers.
The implementation of the Council resolution was very successful both in terms of the debts recovered and the incentive for other ratepayers to pay their rates when due.
Seven properties were removed from the list prior auction due to payment in full of outstanding rates, or in one exceptional case, the payment of most of the outstanding debt and satisfactory repayment arrangements being established for the remaining balance.
17 of the 20 properties presented for auction were then sold with only three passed in due to insufficient bids being received. Actions are in place to address the sale of these properties over the coming weeks.
The sale resulted in the recovery of $279,000 of unpaid rates, including $142,000 at auction and more than $137,000 paid prior.
While for some properties the sale price did not exceed the outstanding debt, leading to $66,000 to be written off, this represents a good outcome for Council as not only has there been a significant reduction in outstanding debts, but there is substantially improved prospects for cash inflows from future rates on the properties sold.
Where properties sold for more than the outstanding amount, the remainder will be held in trust pending determination of final costs and identification of rightful owner(s).
The actions undertaken since the 15 March 2022 Council resolution, including the auction on 29 November 2022, proceeded in accordance with the requirements of the Local Government Act 1993 and the Local Government (General) Regulation 2021.
Section 713 of the Local Government Act 1993 provides that Council may sell land for unpaid rates and charges by public auction. Under the Act, rates and annual charges are considered a debt against the property rather than a personal debt.
