Changes to the process of selling land for overdue rates and charges recently introduced

Local governments who wish to sell land for overdue rates and charges must be aware of these important amendments

The Local Government Legislation Amendment Regulation (No 1) 2020 recently introduced a series of changes to the Local Government Regulation 2012 (LGR).  Notably, a number of amendments were made to the process of selling land to recover overdue rates and charges with these changes applying to all future sale actions commenced on or after 2 October 2020.

The key changes to the sale of land process for overdue rates and charges include the following:-

1. It is no longer mandatory for local governments to advertise an auction notice in a newspaper that is circulating generally in the local government area.  Instead, local governments must publish a copy of an auction notice on the local government's website.

2. However, there is a new requirement for local governments to take all reasonable steps to publish auction notices in another way to notify the public about a sale of land.  The example given in the LGR is to publish an auction notice in a newspaper that is circulating generally in the local government area or on a real estate trading website.  Therefore, where local governments can take extra steps to publish an auction notice to the community, they should do so.

3. Local governments must now end the procedures for selling land within 1 year after a notice of intention to sell is given to the registered owner (assuming that one of the earlier triggers in section 141(3) of the LGR is not earlier satisfied).  Despite this, Council can still attempt to sell the land again at a later stage.

4. If the reserve price for land is not reached at an auction, the local government can now enter into negotiations with any bidder who attended the auction to sell the land by agreement, not just with the highest bidder at the auction.  Moreover, in negotiating a sale, local governments are now required to agree to sell the land to any bidder for an amount that is not less than the reserve price for the land. 

5. In the event that a bid is received at an auction, but the land is not sold, the land will no longer be taken to have been sold to the local government.  This removes the risk that local governments will be taken to acquire land when a local government unsuccessfully attempts to sell the land for overdue rates and charges.

6. In the event that land does not sell at auction, the LGR now provides local governments with a number of options for selling the land.  After an auction, a local government may decide to continue to offer the land for sale by another auction, or sale by negotiation.  If a local government decides to offer the land for sale by another auction or by negotiation, it must prepare a sales notice.  There are a number of requirements, set out in section 144 of the LGR, in relation to publication of a sales notice. 

7. If a local government decides to sell land under section 140 of the LGR, but the land is not sold within 1 year after the local government gave the registered owner a notice of intention to sell, the expenses incurred by the local government in attempting to sell the land will become overdue rates or charges.

These amendments to the LGR have important implications for how local governments commence procedures for selling land for overdue rates and charges.  It is important that local governments consider these new requirements and implement them carefully for all sale actions commenced on or after 2 October 2020.  Failure to do so may result in a successful challenge to the sale of land process.

For assistance with the sale of land process for overdue rates and charges, and to discuss how best to ensure compliance with these new changes, please email Michael Cerruto or Clare Heitkonig, or call (07) 3243 0000.