[Amit Anand]

Hi Guys,

Hope you all had a great time at the conference and it was informative as well. I need some help from you as I have received an unusual mail from a bank. The bank had repossessed couple of properties in our area as the owner were not paying off the mortgage. I have received an e-mail from the bank today advising that they are relinquishing their right on the land and handing it back to the council.

I want clarification on the following points:

1. Can the bank hand the property back to council without seeking council’s consent.
2. What if council does not want the land, what are our options?
3. If Council does take over the land, can it sell through private treaty or do we have to wait for 5 years and then sell it for unpaid rates?

Your expert advise will be greatly appreciated as this situation is quite unique for me.

Regards

Amit Anand

[Robert Hay]

Hi Amit
Has the bank paid the outstanding rates and charges now that they are in possession?
I cant understand why they would repossess the property and then pass it straight onto Council without getting back what they are owed, unless they are trying to absolve themselves of having to sell the property and pass that responsibility onto Council.
Council would not want the property without clear title and the bank removing the mortgage over the property and vacant possession.
I’m sure there’s more to the story. What kind of property is it? Does it having a dwelling on it?

Robert

[John Towers]

Hi Amit,

In answer to your questions:

1) Not that I’m aware of, although possibly they could hand it back to the Crown as the beneficial owner.
2) I refer you to Sec 570 LGA. The key word is “may”……….
3) Under Sec 570 it becomes the Councils land so the Council is free to deal with it as they desire.

Not sure if that will help you.

JT

[Amit Anand]

Thanks Robert and John for your replies. I spoke with the bank representative from whom I received the information. According to him, the bank still has the mortgage on the property which they will not release and they wont sell the land from their end. They wont pay the rates either and will wait for Council to sell the land for unpaid rates once it becomes eligible. If there any funds available, they will then claim that amount to settle against the mortgage.

I am not sure if the banks can force the Council by taking this approach and if Council can initiate legal proceedings against the bank to recover the unpaid land rates as this properties in question are vacant blocks of land.

[John Towers]

Hi Amit,

As I understand it, if a financier takes possession of a property as a Mortgagee in Possession then they become liable for & can be sued for the outstanding rates.

JT

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