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QLS calls for responsible council rates debt reform

Queensland Law Society today exposed a potential missed opportunity to reform laws that could protect people in financial stress from having their properties sold in order to cover outstanding rates debt.

Queensland Law Society President Luke Murphy said the Society was pleased the Government was moving to reform laws regarding the sale or acquisition of land for overdue rates. However, the Society has raised some reservations in its response to a State Government position paper, with Mr Murphy saying it was crucial that reforms also included laws requiring councils to take all reasonable steps to obtain market value for properties sold to recover outstanding rates.

QLS flagged its position on proposed changes to the Local Government Regulation 2012 and City of Brisbane Regulation 2012 in its feedback submission to the Government’s policy position paper, ‘Sale or acquisition of land for overdue rates’.

The response – compiled by the QLS Banking and Financial Services Law Committee – supports most of the position paper’s proposals, but also calls for the inclusion of changes to provide a more “robust process” to ensure councils take reasonable steps to safeguard properties from being sold for less than market value.

“QLS is pleased that reforms are proposed, but…reiterates its existing concerns about some of the proposals,” Mr Murphy said. “The Society is concerned that, without reform, there is a two-tiered system operating, with local governments following one process and mortgagees being required to follow another, more robust process.

“An owner who is not in the position to pay their rates is likely to be an owner who is suffering extreme economic stress.

“In the current economic climate following the pandemic, it may be that there will be an increase in owners unable to pay their rates.”

He said a local government which exercised these powers of sale was compulsorily depriving all landowners of a significant asset in a time of economic stress.

“It is entirely appropriate to require a local government to take all reasonable steps to obtain market value for the property.”

The submission also recommends that consideration be given to a fair and transparent process to be followed by all local governments when rates are overdue, which would require the local government to demonstrate reasonable attempts to engage with the owner.

Mr Murphy said QLS looked forward to working closely with the Government and stakeholders to ensure reforms resulted in the most beneficial and positive outcomes for both local government authorities and landowners.

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