MRRA: Pay rates and avoid penalties

 

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Because it can’t give a “cast iron assurance” that defaulting ratepayers won’t have to pay penalties, the Mangawhai Residents and Ratepayers Association (MRRA) is urging its members to pay overdue rates by December 31.

Said Association chairman Bruce Rogan in a newsletter to members recently:

“The MRRA cannot with a clear conscience subject its loyal and staunch members to penalty charges that could in many cases be as much as an additional $2,000, when we cannot provide a cast iron assurance that in the long run you won’t have to pay them.”

He said that the MRRA advised as follows:
“If you can afford the 10 percent penalty on the current installment without hardship, don’t pay it. BUT, before 31 December, pay off all or as much as you can afford of your rates arrears so that the KDC is prevented from doing what they are eagerly looking forward to doing – which is to slap a 10 percent surcharge on every penny still outstanding at 31 December.“

Mr Rogan said there was no guarantee, despite what the Association believed to be the merits of the Court of Appeal case, that the Association would be successful.

If the Association didn’t win, the Kaipara District Council would have the legal power to impose penalties on all unpaid rates.

“So, it comes down to this. If you now pay them everything they say is owing and stay current, they have no power to impose any further penalties on you. The Court will not (or rather should not) give a fig whether people have paid rates or not.

“If the Court overturns the rates, anything not paid will not have to be paid, and anything already paid will have to be refunded, or a credit applied.” he said.

Meanwhile, the Kaipara District Council has contacted banks who hold mortgages over more than 200 Kaipara ratepayers who have rates overdue.

As most mortgage documents contain covenants that all rates and other charges will remain current during the term of the mortgage, some banks are telling their clients they will deduct the rates from their accounts unless they are paid.

“The example of a bank requiring (rates) payment because the property owner is breaching the bank covenant is correct,” says Chairman of Commissioners John Robertson. “Those with mortgages typically have signed such an agreement with their bank.”

He said there were between 200 and 300 property owners with mortgages who were overdue with their rates.

“Most are likely to be ‘protestors’ but some will not. All will be being contacted by their bank in some way – depending on their bank’s policy concerning people breaching the covenants,” he said.

Mr Robertson said that the process of collecting overdue rates from those defaulters who did not have mortgages was just beginning.

“We have several hundred demands to serve; formal court documents which are a Notice of Proceedings,” he said.

“We urge people to pay their rates now, so that the cost of this for-mal court process does not have them and the council incurring further costs,” he said.

By Peter Nicholas

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