Figures show overdue rates heavily reduced

 

From $3 million of overdue Mangawhai rates to just $1 million in overdues today – this $2 million rates collection in just eight months has been the success of the Kaipara District Council campaign to collect monies from defaulting ratepayers.

The figures are more significant for collections by numbers of Mangawhai ratepayers. From 1264 ratepayers owing $3 million at the end of May 2014, there are only 222 ratepayers owing a total of $1 million today.

The “Rate Striker” campaign has now only 17.5 per cent of those who had not paid their rates in mid-2014 still holding out.

Banks help collection
And with $280,000 of the $1 million overdue relating to properties that are mortgaged, it is likely that banks will soon force mortgagees that have not already paid, to pay that portion of overdues. Almost all mortgage documents have clauses that say the mortgagee must keep all charges against the property (such as rates) “current.”

Banks have been notifying their clients with mortgages that they will either deduct the rates from their bank accounts, or to pay their rates to avoid a breach of the mortgage agreement. A significant portion of recent rate collections have been from mortgaged properties.

Those with Auckland addresses still comprise the majority of arrears from Mangawhai. A total of 60 per cent of Mangawhai property owners do not live in Mangawhai permanently.

For the entire Kaipara District Council area, Mangawhai defaulters now comprise 63 per cent of total arrears, excluding Maori Land Registry properties and abandoned properties. The remaining 37 per cent of overdues (404 ratepayers) from non-Mangawhai property owners owe $600,000, including penalties.

Across the entire District, collections of overdue rates has totaled more than $1.4 million in the last four months.

Of the $1 million, including penalties, still owed from Mangawhai ratepayers, one owner of multiple properties continues to owe the largest single overdue amount – $200,000 – in prior year arrears. Because of privacy laws, the council is unable to disclose the name of this ratepayer.

The amount of overdues owed per defaulting ratepayer has increased over the eight months since the end of May 2014; from $2,373 per defaulting ratepayer that month, compared to $3,868 in October 2014 and $4,504 per ratepayer at January 2014. This indicates that today those defaulters have been holding back their rates for a long period or those who have more expensive properties are holding out.

Defaults lodged with Courts
Chairman of Commissioners John Robertson said that of all 14,135 property owners in the Kaipara District who held mortgages, the mortgage holder had been notified of the arrears. This included the 2,647 Mangawhai ratepayers.

“Rates are being settled by the mortgage holder on behalf of their client (the defaulting ratepayer). We expect this to occur in the vast majority of cases, and to have little outstanding on mortgaged properties within a few months,” he said.

For those without mortgages, the Council had been systematically lodging notices of default in the District Courts, and more than 100 of these have been now lodged, he said.

“Some property owners paid up their arrears on receipt of the court notice, including all penalties,” said Mr Robertson.

He said this was a good solution for both parties – the property owner and the council – for it brought to an end the dispute, and for property owners it removed a “degree of anxiety.” Most people felt much better when they had their accounts up to date, he said.

Mr Robertson said a portion had decided to challenge the notices of default, and the District Court had yet to set a date to hear these cases.

It is understood that the cases will be potentially held in three different courts, depending on the residency of the ratepayer; Whangarei District Court, North Shore District Court, and Auckland District Court.

Legality still challenged
The Mangawhai Ratepayers and Residents Association is also attempting to consolidate a large number of cases into one hearing, lessening the cost of the court action on those who will challenge the legality of the council to enforce rate payments.

Asked whether the Kaipara District Council would look sympathetically on those who had been advised not to pay their rates, and told they wouldn’t have to pay them, Mr Robertson said the council did not distinguish between those who had been strikers or otherwise.

“For anyone having difficulty paying rates, we encourage them to contact the Council customer service line. We have criteria for determining council’s response to hardship, and a property owner facing hardship may be eligible for a government payment towards part of their rates.”

Mr Robertson said collecting rates through the court system had never been the council’s preference, but it had been left with no alternative or other option.

“The High Court left no doubt the rates were valid; public services such as roads, parks and wastewater are being provided by the council, and these services need to be paid for. The payment system is through rating and all property owners need to contribute towards such services,” he said.

Mr Robertson said he understood the “angst” that some had over the history of the Mangawhai Community Wastewater Scheme, and the council was attempting to bring those responsible to account.

“On the other side, also we need to look to the future and build infrastructure and services in Mangawhai that assists all residents,” he said

By Peter Nicholas