Delayed rates declaration and the impact on certificate of liability
Advice is now available on how delayed rates declarations impact upon the content of certificates of liabilities provided under section 187 of the LG Act and information provided under the Land and Business (Sale and Conveyancing) Act 1994 (i.e. “Section 7 searches”).
As councils are aware, the Public Health Emergency: Annual Business Plans and Strategic Planning (No 4) (Notice No 4) enables councils to delay the declaration of general rates under the Local Government Act 1999 (LG Act) in respect of the 2020/21 financial year until 30 November 2020. (Councils may adjust the months in which instalments fall due pursuant to section 181(3) of the LG Act.)
A number of councils have queried how delayed rates declarations impact upon the content of certificates of liabilities provided under section 187 of the LG Act and information provided under the Land and Business (Sale and Conveyancing) Act 1994 (i.e. “Section 7 searches”).
Relevantly, councils need only provide information about actual present liabilities and declarations in respect of land. Before a rate is declared in respect of a financial year, it is not a liability. Accordingly, there is no need to disclose a rate in respect of the 2020/21 financial year if it has not yet been declared.
In practice, when providing persons with requested information, we suggest that councils:
- mention the 2019/20 rate (indicating whether this has been paid in full and whether the account is in deficit or credit);
- mention that 2020/21 rates have not yet been declared; and
- indicate an approximate date as to when rates might be declared.
Even without Notice No 4, councils have always been able to declare a rate part-way into a financial year. Usually, under section 153(5)(b) of the LG Act, councils have until 31 August to declare a rate in respect of a financial year. Thus, councils may have already encountered this scenario in previous years and have adopted a practice consistent with the above.