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Council Property Auctions; A Chance To Snag A Real-estate Bargain.

These are little-known strategy but it is possible to find city or town councils around Australia selling properties for unpaid rates. The West Coast Council in Tasmania had up to 18 properties with outstanding rates owed. The auction was scheduled to be held back in the middle of 2016.  Interestingly many councils from time to time conduct these type of options and they can range from houses to undeveloped vacant lots and both commercial and residential properties.  In the case of the West Coast Council properites, the property to be auction were in Queenstown, Strahan, Tullah and Zeehan in Tasmania.

The most famous and notable case of houses being sold by councils were the case of the Sydney hoarders house at Bondi.  The NSW sheriff had attempted three times to auction the property in February and each occasion had been delayed at the last hours.  There were over 50 emails overnight reportedly received by the agent handling the auction on one advertisement of the property.  The owners reportedly owed the Waverley Council in Sydney $160,000 for outstanding debts and cleanup and legal costs relating to rubbish on the property.  On one occassion the auction was cancelled just 50 minutes before the property was due to be auctioned.

For property owners it is the law that they pay their rates and in some cases, some property owners in Australia just don’t want to pay their rates.  There are situations of absentee landowners who, in some cases people forget to pay.

When the properties are sold the funds are usually held in trust for a statutory period just in case the owners come forward.  This means that it may take years for the council to finally receive the money.  As in there it’s Tasmanian example of the council selling properties for rates recovery it may take from the time the person stopped paying rates to recouping the dollars into council coffers approximately six years at a minimum.

When the council moved to sell a property they usually engage a local firm of real estate agents who will generally sell the property by auction.  The council being in a delicate situation will make exhaustive enquiries in an attempt to locate the owners or executors of any well and estate and seek to get the rates paid before they initiate a process of sale.

The council will follow a legislated path includes advertising, following up any last known addresses of the people and even involving debt collectors at some point in the process.  It is possible for owners to even make a payment arrangement with Council should their property be under the council spotlight for paying rates.

Gladstone Queensland, surplus rates sale of properties

It’s a case of looking all around Australia and knowing where to look.  Gladstone for example had a bunch of properties during the midyear fibre due rates.  The Gladstone regional Council the selling 55 properties initially after owners and not pay their rates in three years or more.

Following detailed investigations the list that finally whittled down to around three with a collection of rates due over $53,000.  Owing to the council was various amounts of around $11,000, $16,000 and $25,000.  As you can see there is nothing in it financially for the council to hold onto these properties other than to recoup what is owed in rates.  The Gladstone councils recovery of rates arrears process gives property owners up until the morning of the option to pay the overdue rates after which the property will be scheduled for sale by public auction.

gladstone property for sale by council

New South Wales property is being sold by councils

is not always straightforward and trying to pick up a cheap property through a council unpaid rates option.  Auction house Ford and Dougherty were selling properties which were unused council facilities in Grafton, New South Wales

back in August 2016 they had a property which were passed in with several bids that didn’t reach the reserve price.  As a properties do not sell at auction they were then put into private treaty process.  With these options of Council properties whether for unpaid rates or surplus council properties you never know your luck but in one case of a a property at Spring Street in Grafton there was only one registered interested person and that option and did not call the option but negotiated with an offer from them.

Sometimes sales are not straight forward and Councils have landed in hot water.

In one profile case there was a situation in Toowoomba where the council had caused humiliation by publicly naming a home owner who could not pay their rates bill a Queensland ombudsman report found.  The Toowoomba regional Council recently auction of several homes under the local government regulation to collect unpaid rates.

One owner who had fallen on hard times awoke one morning to find a large auction sign erected on the front of their property.  Underneath the sign was the owner’s full name, address and property description.  This led to raising the issue of inconsistent laws across Queensland which in some cases some councils named the landowner on the option notices and some do not.

There may be limitations for some buyers.  Properties are being sold by auction and therefore, buyers will need to come up with a cash settlement.  There are no terms, no subject to finance clauses here with these deals.

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