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Property auction fails to clear debts

Geoff Helisma

Clarence Valley Council’s (CVC) property auction to recoup unpaid rates will result in the writing off of $103,470.48 in outstanding debts.

At next week’s October 16 CVC meeting, councillors will consider a report on the outcome of the auction of 23 properties on May 23, 2018.

Thirty-one properties were gazetted for sale, as per the Local Government Act; however, seven were withdrawn before the auction because the associated rates debt had either been paid in full or an agreement had been reached to clear the debt.

One of the properties, which was only seven square metres, did not sell.

Pending the councillors’ decision, CVC will hold the surplus proceeds ($267,050.36) – from the five properties that cleared their debts – in trust, “pending claims for dispersal to the relevant owners/interested parties”.

“Any requests for the release of these funds will be reported to Council for approval,” the report to council states.

Regarding the 18 properties that did not clear their rates debts, staff wrote that they “were of little commercial value and, as a result, the price realised at auction was less than the balance of the rates account and the legal costs incurred”.

Legal costs and expenses of $6,785.87 were incurred on properties withdrawn from the auction; and $3,821.79 for properties where the sale price was insufficient to cover costs.

Staff advised that these costs “will need to be recognised as an expense incurred by Council” and that they “are not recoverable from the ratepayer”.

Each of the lots sold that did not recoup its outstanding debt was vacant and carrying a residential property status.

Size wise, the land varied from regular house blocks to several hectares.

For example, a 3.475 hectare block at Wants Lane, Glenugie sold for $7,000; a 6,200 square metre block at Cangai on the Gwyder Highway sold for $3,000; and a 1,076 square metre block at Tyson Street, South Grafton sold for $3,500.

A 43.4 hectare property at Pringles Way, Gurranang, which sold for $31,000, was one of the five properties that cleared its debt ($12,748.23).

A property at Banksia Street, Grafton, which had outstanding rates amounting to $45,956.86, was sold for $215,000.