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Intro
Local governments will from time to time face the situation where a person or company does not pay their rates or service charges for a number of years.
The intent of this guideline is to explain the process required to comply with the legislation governing the taking possession of land in order to recover rates and service charges that are unpaid after three years.
Throughout the guideline there are also references made to Landgate’s “Land Titles Registration Practice Manual” as many of the actions detailed have associated “Landgate” requirements.
Local governments may take action to lease or sell the land to recover rates and or service charges outstanding or they may cause the land to be transferred to the Crown or to itself.
Such action should only be considered when all other avenues of inquiry and action (such as the following examples) and where possible, consultation and negotiation for the debt recovery with the person or company, have been exhausted.
This guideline sets out the process, step-by-step, so that if followed correctly the legal requirements should be met.
If the before mentioned and any other steps have not produced any result, a report should be prepared for Council. The report should outline the overdue rates or service charge position, and the attempts at debt recovery and owner location.
The report (refer Attachment 1.) may recommend that Council resolves by simple majority to lease or sell the land to recover rates and or service charges outstanding or may recommend that the local government apply to the Minister for Local Government to have the land re-vested in the Crown in right of the State under section 6.74 of the Act or make an application for the land to be transferred to itself, under section 6.75 of the Act.
Note: Section 6.68 of the Act states that a local government is not required to attempt to recover money due to it where;
There is a legislative process that must be followed to comply with the lease, sell or transfer requirements of the legislation so that any of these actions are legally enforceable.
The Landgate procedures outlined in these guidelines (highlighted text) are intended as a general guide only and are not a substitute for legal advice. Local governments and other parties should seek their own legal advice in respect of individual transactions. For further information, the most recent version of Landgate’s Land Titles Registration Practice Manual (Landgate Practice Manual) is available online.
Please note that references to particular paragraphs of the Landgate Practice Manual in these guidelines may be subject to change.
The legislative requirements to take action against land where rates or service charges are unpaid are contained in Part 6, Division 6, sections 6.63 to 6.75 and Schedules 6.2 and 6.3 of the Local Government Act 1995 (the Act) and Part 5 of the Local Government (Financial Management) Regulations 1996 (FMR) regulations 72 to 78 and Forms 2 to 7. (Copies of these forms are available as Attachments 3 to 8).
The legislation relevant to each step of the process is identified in the checklist at Attachment 2.
A question of interpretation has been raised in relation to the meaning of section 6.64(1) of the Act which gives the power to a local government to take possession of land where any rates or service charges which are due to a local government in respect of any rateable land have been unpaid for at least 3 years.
Advice received by the department indicates that irrespective of any payment made towards the unpaid rates which have been outstanding for at least three years the process for taking possession of the land remains valid. It is considered that section 6.64(1) of the Act applies where any part of a sum (for rates and/or service charges) is still unpaid three years after it first became due.
In determining whether the local government can take possession of the land, it must ensure that;
For example, rates are outstanding for 2008/09, 2009/10 and 2010/11. The 2008/09 rates were levied on 10/08/2008; the rate notice was issued on 24/08/2008 and the nominated due date was 30/09/2011, which is the date to be used.
Note: In this guideline, a reference to a Notice being ‘served’ or ‘given’, may be served or given in any of the ways provided for by sections 75 and 76 of the Interpretations Act 1984. Refer also to the Local Government Act 1995, Part 9 Division 3 - Documents.
Note: Court action must have been initiated.
The local government does not have to initiate recovery for money due on the land if it holds the reasonable belief that the cost of the proceedings under s.6.56 will equal or exceed the value of the land. (s.6.68(2)), or having made reasonable efforts to locate the owner of the property, is unable to do so. The local government is to ensure that such decisions are recorded in the relevant Council minutes.
Searches can be ordered through the Landgate website and paid for by credit card or through a Landgate account.
Searches can also be obtained in person or ordered by facsimile on 9250 3187.
For old system land, searches of the Register containing memorials under the Registration of Deeds Act 1856 to obtain the address and details of the registered proprietor can be conducted at Landgate, Midland upon payment of the prescribed fee:
Landgate 1 Midland Square Morrison Road (cnr Gt Northern Hwy) Midland, Western Australia, 6056
Office opening hours: 8.00am - 5.00pm Monday to Friday
Document lodgement: 8.00am - 4.30pm Monday to Friday
For further information on searching the Register under the Registration of Deeds Act 1856 see Paragraph 10.1.7 of the Landgate Practice Manual, including a schedule of the fees charged for each document searched.
A notice in the form of Form 4 has to be served, on other persons whom records indicate have an estate or interest in the land, personally or served by certified mail to the address appearing in the rate record or a register kept under the Transfer of Land Act 1893 or in a memorial or record kept by the Registrar of Deeds. (Sch. 6.3 cl.1.(1)(b); FMR r.74, Form 4).
A notice in the form of Form 4 has to be posted on the official notice board of the local government for not less than 35 days. (Sch. 6.3 cl.1.(1)(c); FMR r.74, Form 4).
The local government notice requiring payment is to:
See Paragraph 11.4.18.2 of the Landgate Practice Manual.
The Memorial of Advertisement must comprise:
Note: There is also provision for the Governor to rectify omissions and irregularities under section 9.64 of the Local Government Act 1995. After the memorial is registered, the Registrar of Tiles or the Register of Deeds is prohibited from registering or accepting an instrument affecting the land without the consent of the local government (Sch. 6.3 cl.2.(4)).
As soon as practicable after the acceptance of such a payment, the local government is to deliver to the Registrar of Titles or Deeds, a certificate, signed and dated by the Chief Executive Officer, certifying that all outstanding rates and service charges, costs and expenses have been paid and upon receipt of this certificate, the Registrar of Titles or Deeds will then endorse a memorandum that the land has ceased to be bound by the memorial. (s.6.69; FMR r.76)
A Certificate stating that all outstanding rates and service charges, costs and expenses have been paid is required to be lodged at Landgate and should comprise:
Following lodgement of a Certificate in the appropriate form signed by the Chief Executive Officer of the Local Government, the Registrar of Titles causes to be entered on the relevant title a memorandum that the land has ceased to be bound by the Memorial of Advertisement.
No fees are payable for withdrawal of the Memorial of Advertisement. If after the expiry of twelve months the Memorial of Advertisement has not been removed, it is ignored as an encumbrance.
If a contract for sale has not been entered into within 12 months from the date that the land is offered for sale by public auction notice, in the form of Form 5, the proceedings for the power to sell the land cease to have effect.
Proceedings can however be recommenced after this 12 months period, and the same power of sale of land proceeding requirements apply again for any proposed future sale. (Sch. 6.3 cl.7.)
If a contract of sale is entered into within the twelve month period after the date the land is offered for sale pursuant to the power of sale, a Transfer (Landgate Form T5) giving effect to this sale may be accepted for registration by the Registrar of Titles during or after this period unless a dealing has been lodged which prevents registration of the Transfer.
The local government’s power of sale includes:
Note: An option open to local governments is to obtain an ‘occasional licence’ under the provisions of the Auction Sales Act 1973 and the Auction Sales Regulations 1974. An ‘occasional licence’ authorises the holder to act as and carry out the business of, an auctioneer in relation to the occasion and circumstances specified in the licence.
The application process for an Occasional Licence is summarised as follows:
Priority and payment allocation:
Where the local government exercises its power of sale under sections 6.64(1)(b) and 6.68 and Schedule 6.3 of the Local Government Act 1995, a Transfer (Landgate Form T5) executed by the local government using its common seal is used for transfers of land under the Transfer of Land Act 1893.
If the land is old system land which has not been brought under the Transfer of Land Act 1893 the procedure for a conveyance of land under the Registration of Deeds Act 1856 will apply. See paragraph 10.1.3 of the Landgate Practice Manual.
The Transfer (Landgate Form T5) must be supported by a statutory declaration made on the back page of the Form T5 by the Chief Executive Officer, attesting to compliance with the provisions of Part 6 Division 6, Subdivision 6 of the Local Government Act 1995.
In circumstances where there is a duplicate certificate of title, it is not required to be produced but the Registrar may with the consent of the Commissioner of Titles dispense with the production of the duplicate certificate of title (if any). The Registrar has the power to make orders or require advertisement as if the duplicate title was lost or not produced under the Transfer of Land Act 1893.
Where a paper title is in existence, a new title is created and registered in the name of the transferee. In the case of a digital title, a new edition of the duplicate digital title is issued.
Please refer to 3.6, on removal of encumbrances.
The issue of a receipt by the local government for money paid on the sale of the land is sufficient discharge. (Sch. 6.3 cl.6.)
Refer to Sale of Land Checklist Attachment 2.
The following are some of Landgate’s requirements for registration of leases which may apply
Please note that this is not an exhaustive list of Landgate’s requirements.
See paragraph 2.8 of the Landgate Practice Manual for further information on registration of leases.
Where the land has been offered for sale for non payment of rates or service charges and a contract of sale has not been entered into at the expiration of 12 months from the date that the land is offered for sale by public auction notice (Form 5), the land may be transferred in fee simple, to the Crown in right of the State or to the local government. The transfer is subject to the Transfer of Land Act 1893, or by deed when it is not covered by the Transfer of Land Act 1893. (s.6.71(1); Sch. 6.3)
The local government must have taken possession of the land. (See 3.3)
Upon transfer to the Crown or to the local government, all encumbrances affecting the land are of no further force or effect against the land and the Registrar of Titles or Registrar of Deeds is to remove all encumbrances from the title to the land. (s.6.71(2))
Note: State Land Services (SLS) does assist local governments by accepting transfer of land under s.6.71 of the Act and re-releasing it under the Land Administration Act 1997 (LAA), often with covenants or conditions requiring development within specified timeframes. SLS also actively identifies parcels of Crown land in town sites that may be released for development. However, there are no provisions in the LAA for enforcing development on freehold lots.