[Emma Murphy]

I am fortune to have a great working relationship with our building guys and planners. This morning our building surveyor has came to me to seek advice about his current situation, so I am leaning of fellow RP’s for advice….as it kinda crosses over to sundry debtors/sale of land.

A house in our shire has burnt down and requires clean up (asbestos involved).

Home is owned by three people, two deceased, and a 3rd who didn’t live there, and is in her 80’s, there is no insurance on the property.

The building surveyor is getting ready to serve a clean up order over the property, however it will be unlikely that the owner has the capacity or funds to facilitate this, and we are predicting this may be left to Council, and the costs raised as a charge on the land.

The property doesn’t yet qualify for unpaid rates; it only has 1 year outstanding, plus the 2019/20 rates. It is estimated that the rates plus sale of land costs would be around $8000-10000, and the clean up cost to be around $10k. The current land value is $2k, which I suspect will be roughly what it would sell for at auction, based on the area – which is low social economic aboriginal community.

Just wondering if anyone has faced a similar situation.

Are we heading down the right track?
Is there any avenue we haven’t seen, that wont see Council writing off a massive debt in 5 years?

[Ian Clayton]

Hi Emma,

We had a situation very similar to yours. A house burned down and the presence and likely spread of asbestos required Council to issue an order under sections 121B & 121D of the EP&A Act (sorry, these are the old EP&A Act section numbers).

The order wasn’t complied with, so Council had to clean it up costing around $30k. The public risk was very high so required us to act. Section 121ZJ of the EP&A Act allows for the recovery of the costs incurred from the owner, not as debt on the land. The mortgage holder eventually sold the now vacant, clean block for about the value of our debt. We put the debt amount on the 603 certificate and following negotiations, they agreed to pay half of the debt form the sale proceeds.

The house was insured, but the insurers refused to pay due the circumstances surrounding the cause of the fire. The now former owner is elderly & has no means to settle the debt. We have not taken any recovery action against her and will likely have to write-off the balance.

Whether or not the debt is a property debt will depend on the legislation under which the order is given. It might not make much difference in your case though, given the low value of the land. Sounds like you might be left with a write-off like us.

Cheers
Ian

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