Rates default triggers possible sale of Whanganui property

The owners of a Roberts Ave property owe Horizons Regional Council $3495.67 in rates. Photo / File

A Whanganui property is one of seven that Horizons Regional Council may sell or lease to recover what is owed in unpaid rates.

The owners of the property at Roberts Ave have until the end of January next year to pay $3495.67 in rates, plus court costs and interest to either the High Court or the council.

If this is not done the property will be sold or leased, by public auction or public tender.

Horizons goes through a series of actions before pursuing sale, its chief financial officer Adrian Smith said. The sale or lease is possible under the Local Government (Rating) Act 2002.

"This is not something we take lightly - it is an extreme last resort. Normally some agreement is found, which is our preference."

In the 2020-21 financial year it filed applications to sell 16 properties. The owners of eight of those have paid in full.

One has been sold, another four are due to be sold and a further three are waiting for the six-month statutory period to be over before they can be sold.

Some of the sales are joint efforts, with other local councils. Selling a property because of unpaid rates is a long process, and the owners can intervene to stop it at any stage.

When rates are unpaid, Horizons first lodges the matter with Debt Management Central (DMC). It attempts to contact the owners by letter, text or email.

If there is no response or payment, an application is filed in court. If that is served the owners have 25 days to defend it. If it's not defended the council can seek a court judgement, after a further attempt to contact owners.

When a judgement is obtained, proceedings in the High Court start three months later. In the case of Roberts Ave, the High Court issued its notice on July 29.

"The owners can at any stage pay what is owed or enter into a satisfactory arrangement to stop or pause the process," Smith said.

Horizons gets rates from about 108,000 units of property. The 16 who did not pay last year are a minority - and the council is prepared to take action to recover unpaid rates for the benefit of all ratepayers, Smith said.