This Guthrey Place, Otara property has racked up $161,000 in overdue rates. Photo / Michael Craig
Tardy Auckland property owners have racked up $53 million in overdue rates, with Auckland Council preparing to forcibly sell an Otara home with the city's longest outstanding debt.
The Guthrey Place property has a CV of $560,000, is surrounded by state homes and currently owes $161,000 in unpaid rates and penalties.
It has grown to be Auckland's fifth largest overdue rating debt, with arrears dating to 2003.
The property's owner is listed as Joseph William Leef. The Herald has been unable to contact Leef or his family.
Auckland Council is investigating whether the overgrown, ramshackle property - which incurs annual rates of $2000 - is now abandoned or a deceased estate.
Council litigation and dispute resolution manager Kelly Quinn said staff had never been able to contact Leef about his overdue rates. It first filed court proceedings in 2016 but received no response.
The council had no authority to enter the property to check on the owner's welfare unless it received a complaint from neighbours affected by the state of the property.
"Having attempted all other means of contact, the next step in this case would be to pursue a rating sale.
"This is not a step the council takes lightly and we will continue to seek contact with Mr Leef through any other means in the new year before progressing with a sale."
In December the Herald reported that the council is going after Freemans Bay cafe owner Dilip Rupa's business and home due to his refusal to pay a whopping $350,000 in rates - the city's largest overdue bill.
It is applying to the High Court for a forced rating sale. Rupa would then have six months to pay the debt, or his family-owned business premises and jointly-owned Grey Lynn home could be hocked off at auction to recoup the arrears.
Such action is extremely rare, with council officials going to great lengths to avoid forcing someone from their property.
There has been only one successful compulsory rating sale since the supercity came into being in 2010.
Charlotte Hareta Marsh lost her home of 20 years in a 2015 court-ordered sale after failing to pay rates for nine years.
Despite repeated warnings, she refused to recognise the authority of Auckland Council and claimed to have paid her rates instead to the "rightful land owner" - Arikinui o Tuhoe.
At the time of the sale, Marsh owed more than $12,000 in rates and penalties and nearly $3000 in court costs.
Asked at the time if the council was being mean-spirited forcing Marsh from her home over a $12,000 debt, the council said it had to be fair to all ratepayers.
"We have several hundred thousand ratepayers who do pay their rates. This particular case is not about an affordability issue, it is about a ratepayer refusing to acknowledge Auckland Council as a statutory authority."
Quinn was in the Barfoot & Thompson auction room that day and hopes the process is never repeated.
"We don't want to sell people's properties if we can avoid it."
Fortunately most people engage with the council and see reason long before things escalate to a court-ordered disposal.
Figures obtained by the Herald under the Local Government Official Information and Meetings Act show Auckland property owners owed $53m in overdue rates at the end of the last financial year to June 30, 2021.
That was up $10m on the previous year, though the council says that reflects the impact of a Covid-19 rates deferral scheme, which saw more than 8000 property owners defer paying their rates in 2019-20. Penalties were also put on hold till September 2020.
Nevertheless, the $53m figure is the highest in the last five years. It is owed by more than 27,000 property owners, the vast majority of them residential.
The five largest overdue rates bills total $1.24m.
They include the $350,000 Rupa arrears, a $282,000 bill for a home at Wade Heads, Whangaparāoa which is currently before the courts, $279,000 owed by a central Auckland business, $176,000 owed by a Henderson business, and the $161,000 Otara/Leef matter.
Though few ratepayers enjoy paying their rates, they are essential to fund Auckland's day-to-day services and facilities such as roads, water, libraries and parks.
The council's group treasurer John Bishop says when a ratepayer fails to make a payment, they receive phone calls and reminder letters requesting payment of the overdue amount.
Rates that remain outstanding at the end of each financial year are referred to the council's in-house legal team for further recovery action. There are currently 733 such cases.
If there was a mortgage on the property, the council could legally demand payment from the lender, who would then recoup the money from the property owner, Bishop said.
The situation is more difficult when the property is owned freehold, with court action a more likely outcome.
Auckland Council currently has 130 court proceedings at various stages, with two cases being defended.
The council has applied to the High Court to liquidate four companies due to unpaid rates, but declined to name the businesses.
While the council is yet to file a formal rating sale application, it has 16 cases "that now qualify for that process". It expects most of them to be resolved.
Bishop said property owners occasionally challenged the council's legal authority to levy rates and refused to pay up. In such cases the council could file court proceedings, but this was rare.
"No one wants to have their house sold from under them. In 90 per cent of cases commonsense prevails."
The council had a strict legal process to follow when setting and collecting rates and had to ensure all ratepayers were treated fairly, Bishop said.
It could not allow some ratepayers to "cross-subsidise" others who refused to pay their fair share.
Late activist Penny Bright's 11-year refusal to pay rates nearly cost her her Kingsland home in the months before her death.
Bright, a colourful protester who spent much of her life holding Auckland Council and its predecessors to account, had disputed and refused to pay her rates, citing "the lack of transparency in council spending on private sector consultants and contractors".
The council went to court to have Bright's home forcibly sold to recoup tens of thousands of dollars in unpaid rates and penalties, and it was listed by Barfoot & Thompson in April 2017.
But in May that a year, a deal was struck after Bright applied for a rates postponement, which was accepted by the council and the forced sale proceedings halted.
"My one-woman rate protest is now over, it is just a small battle in the war for transparency," Bright said at the time. "People understand I took a stance."
The deal came just weeks after Bright revealed she had "incurable and inoperable" ovarian cancer. She died the following year aged 64.
And the Herald reported last year how a Howick homeowner faced a forced sale of his property due to his failure to pay any rates for seven years following an acrimonious relationship split.
The former builder and ex-prison inmate, who was then on the dole, said he could not afford the $33,000 rates bill he had racked up.
He questioned the council's right to levy rates and labelled it "ruthless" for going after his home, vowing to stay put if officials tried to evict him.
The man, who cannot be named for legal reasons, eventually struck an 11th hour deal to save his home after the council agreed to postpone his rates bill.
It means the debt won't have to be repaid until he dies, when his house is likely to be sold and the outstanding amount deducted on behalf of Auckland ratepayers.
His ratings have probably improved since the CCO reforms, says the mayor.