By David Cains *
Council average rates needs have blow out a further 30 per cent over the past three years, far exceeding the weakening increases in incomes from ratepayers. As a result, council receivables are becoming an increasing problem.
Council Financial Officers are struggling to balance tight budget requirements with their growing overdue receivables. They must handle overdues in a precise, quick, cost effective manner that strengthens their receivables but does not put a greater burden on ratepayers who may already be struggling.
Many councils in Australia are still under the requirement that costs of enforcement cannot be added to overdue rates which results in a requirement for enforcement by litigation.
Enforcement by litigation allows the council to legally pass the costs of collection overdue rates to the ratepayer. Court scale legal costs are set at a rate to reimburse the legal profession for work done where there may be difficulties in recoveries or hidden or no assets available to pay outstanding debts.
Councils are in the position envied by others as their unpaid rates accrue on the property in question. This gives a far greater chance of full payment being made at some stage in time.
Councils must structure their agreements with their Legal Firm partners to charge a reasonable fee for debt based litigation, without a large extra burden on ratepayers. This can be done by agreement between parties.
On non rate debts, it is usual that costs can be added to the fee, fine or recovery in question. At Linton Pitt Lawyers Pty Ltd we have attempted to assist all parties in the matter of unpaid rates.
For further information please visit www.lintonpitt.com.au.
* David Cains is Practice Manager with Linton Pitt Lawyers.
