Landlord refuses to pay

Wally Yovich says he refuses to pay commercial rates on one CBD property as rates have doubled after a review. Photo / Michael Cunningham

A landlord with 30 tenants in Whangarei's CBD is refusing to pay commercial rates to the local authority on one property after a rates review almost doubled the fees on the nine-tenant block.

Whangarei District Council (WDC) is reviewing 2100 "commercial/industrial" properties in the district, 374 of which are in the CBD, to find out how many commercial units each property has and charge them less or more, through rates, for council services.

WDC applied rates according to the Quotable Value database, which was now out of date and resulted in unfair ratings, said WDC spokeswoman Ann Midson.

Ratepayers were contacted by WDC last June but as of December, 62 per cent had yet to respond.

CBD landlord Wally Yovich has responded and is refusing to pay the increase. Rates on his property at 70 Cameron St, which has nine tenants, jumped from $12,233.30 for the 2012/2013 year, to $22,368 for the 2013/2014 year.

He is now in rates arrears on the property and said he refused to pay.

The increase, he said, had to be divided up between the nine tenants, at $2485.45 for the year, compared with $1359.26 for the previous year.

Tenants already paid an average of $9000 per annum for rent, he said, and had insurance costs on top of that. Under the routine review and according to the Local Government (Rating) Act 2002 and WDC's rating policies, council can correct rates, setting them to occupied units within properties, rather than individual property titles.

But first, it must find out how many units each property contains.

The review would prevent some commercial ratepayers from paying less than their share and likewise, allow for reduced rates for those who had reduced units since the last ranking.

Most rates adjustments would not come into effect until July.

Ms Midson said WDC charged commercial rates "per separately used or inhabited part" of properties.

"If the data is wrong and causes an owner to be under-charged, then they will be getting more services than they are paying for. All other ratepayers will be covering their costs.

"If the data is wrong and causes an owner to be over-charged, that owner will be paying for services they are not receiving, but covering costs for services someone else should be.

"This review is business as usual, there is nothing unusual about it.

"It's all about keeping it fair," she said.

Four properties in the CBD were in arrears, she said, and owe a total $20,912 but they were not disputing the recent changes. She said WDC would try to work with ratepayers to arrange payment and bringing the issue to court was WDC's last resort.

Mr Yovich, who has been in the accountancy business in Whangarei since 1968, is challenging the increase.

"It's a rubbish law. It's not appropriate to rate each unit separately."

The increase in rates did not reflect any additional services by WDC but was, he said, merely a means to cover their overtly high operational costs.

The former WDC councillor and finance chairman for six years said WDC needed to trim its staff rather than hit ratepayers with increases.

What do you think?
Have your say below.