Super-city plan for mortgagee sales
Auckland ratepayers beware. The super-city will soon have a new policy on when it will move to sell the homes of people who refuse to pay their rates.
In a statement to the Sunday Star-Times, the Auckland Council said the former eight Auckland councils had different approaches to invoking property sales. Auckland Council is refining a draft policy that will provide a clear set of guidelines as to when the sale of a property would be pursued. This has yet to go back to councillors for approval.
"Where there is no mortgage, councils across the country are entitled to invoke a sale of the property to recover unpaid rates," the statement said. "Obviously, this is a serious step to take and not one any council would pursue lightly."
The council appears to have been goaded by the refusal of one leftist political activist to pay rates for nearly five years.
Penny Bright, a serially unsuccessful candidate in mayoral elections, stopped paying her rates in 2008 to protest a lack of council transparency. She said she would pay only when the council revealed details of the contracts it was awarding to private businesses as Aucklanders had a right to know where their money was being spent.
Councils have powers under which banks can increase debtors' mortgage payments to pay their rates bills or they can apply to the courts to have arrears paid from deductions to ratepayers' salaries.
Auckland Council uses these powers thousands of times a year, but Bright owns her own home without a mortgage, and is not salaried, and is therefore not susceptible to either tactic.
There are two other options for the council, but despite Bright's non-payment, the council has not used either during the long standoff: it could seek a court order to have property seized and auctioned or it could seek a "writ of sale" allowing it to conduct a mortgagee sale. These are options available to any creditor owed money by an asset-rich debtor who is unwilling to pay up.
The council said it had obtained court orders to compel Bright to pay, and the rates debts had been secured by lodging charging orders against her property so she couldn't sell it until the debts were paid.
But its restraint in moving to the last resort of seeking to sell Bright's Epsom home appears to have been a result of a lack of clear policy.
Bright said she would welcome the council "making a martyr" of her and trying to sell her home, saying it would highlight the lack of council transparency.
Recalling the reason for her rates protest, Bright said: "I wasn't going to pay my rates as long as they weren't going to tell me where my money was going."
Bright said a bureaucracy had been replaced by a "contractocracy", and there had never been a jot of proof that contracting out council services had produced benefits to ratepayers.
"How come ever since they have been contracting out, rates have continued to go up," she said. "There has never been a cost/benefit analysis of contracting out council services."
She also dismisses the argument that contracts are commercially sensitive, saying a condition of doing business with the council, and profiting from ratepayer money, should be transparency.
Bright intends to stand again for the mayoralty in this year's election, and there is no rule to prevent her despite her refusal to pay her rates. Bright has also been refusing to pay her water bills.
Auckland Council said the payment of rates was important to fund council services.
"The majority of ratepayers pay their rates on time. When ratepayers do not pay their rates, they place an unfair burden on those who do pay."
- © Fairfax NZ News
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