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A West Australian real estate agent and auctioneer says an increasing number of shires are selling abandoned houses to recoup unpaid rates.
Under WA's Local Government Act, if rates have not been paid on a property for more than three years, the shire can take possession and put it up for public auction.
Tony Maddox has been selling properties on behalf of shires across the state for about four years.
Tony Maddox sells properties on behalf of shires for non-payment of rates. (ABC South West WA: Bridget McArthur)
He auctioned off a four-hectare property in Palgarup, South West WA, on Wednesday for $310,000 on behalf of the Shire of Manjimup.
The median property in the Shire of Manjimup is about one-fortieth the size and $120,000 more expensive.
The shire said it was a deceased estate and rates had been unpaid for a decade, totalling $27,000.
It was the first time the shire had undertaken such a sale.
Mark Logue says acquiring and auctioning properties is complex. (ABC South West WA: Bridget McArthur)
Debt collection specialist Mark Logue said sale was usually the last resort and there were many legal hurdles to pass, including making every possible effort to get in touch with the owner's next of kin.
The AMPAC managing director said on top of deceased and abandoned estates, his firm had dealt with several cases in WA of "sovereign citizens" who simply refused to pay rates.
"There's a different story behind every [sale]," he said.
Local buyers preferred
The Palgarup property is of historic importance to the town as the former site of a timber mill owned by Millars — a timber company taken over by Bunnings in the 1980s.
The Millars Mill gates are heritage listed as the only known remnant of the company's involvement in the timber industry in Manjimup.
Donelle Buegge congratulates the farmer who bought the property. (ABC South West WA: Bridget McArthur)
Shire President Donelle Buegge said she was glad the property was going to a local farmer, who had just managed to outbid an interested buyer from Perth.
"It is quite run down," Ms Buegge said.
"[The] fire breaks need to be done as well.
Mr Maddox said the buyer planned to restore the mill and lease it out to a local in the timber industry for commercial use.
The heritage-listed Millars Mill gates mark the entrance of the Palgarup property. (ABC South West WA: Bridget McArthur)
He said it was the ideal outcome.
"I want the shires to benefit from the sale of the property and I want the property available to be bought by WA people," he said.
"Not eastern state buyers that are investors who have no intention of ever living there and no intention of helping the shire."
Mr Maddox said he only allowed people to bid if they were physically on site.
A farmer purchased the property and everything on it for $310,000. (Supplied: Tony Maddox)
WA's cheapest house
In October, Mr Maddox sold a house in the Midwest town of Morawa for $2,000 — the cheapest house sale in WA this year.
He said it was a demolition job, purchased on a whim by a young single man living and working in the area who planned to fix it up.
An uninhabitable property sold to a young man for $2,000. (Supplied: Tony Maddox)
The auctioneer said he sold another Morawa property to a mother-of-five for $25,000.
"[She] was ecstatic," he said.
"She gave me a great big hug when we finished … because with five kids, how the hell does she buy a house?
"They're my treasured moments ... [It's] great for her and it's great for the shire."
The Shire of Morawa agreed to list both properties without a reserve price meaning they did not recoup the value of the rates lost on them.
Mr Maddox said they were happy just to see them developed and bringing new people into the community.
Sign of the times
Mr Maddox has sold more than 50 properties on behalf of shires so far this year, from Yalgoo to Coolgardie to Tambellup.
He said he already has shires queued up for next year.
He said local governments had preciously shied away from repossessing and selling abandoned properties due to the length and complexity of the legal process.
A 42-hectare property sold in the Shire of Denmark for $540,000 in May. (Supplied: Tony Maddox)
But he said the cost-of-living and housing shortages had shone a spotlight on "lazy land" that could be generating rates and providing people with places to live or work.
"The worst one I saw was our own shire [Toodyay] where I just sold a property that hadn't paid rates for 70 years," he said.
"If we can make some money for a shire and sell these places, it not only benefits the shire but it also benefits the community."
He also said more people were willing to move to regional and remote areas and put a bit of elbow grease into fixing up a property in light of skyrocketing house prices.
A property in Morawa was bought for $2,000. (Supplied: Tony Maddox)
"We have a database of people that actually follow us around to auctions all over the state," he said.
Under law, shires can only claim the amount they are owed in rates.
Any outstanding amounts owed to other agencies come out of the remainder.
Leftover profits go back to the original property owner, their next of kin or a deceased estate trust.
Mr Maddox said his company was paid by the shire at a pre-agreed rate, no matter the outcome of the sale.
Editor's Note (22/12/24): Mr Maddox faced a trial earlier this year relating to an alleged breach of the WA Aboriginal Heritage Act. He could be jailed for nine months or face a $20,000 fine if convicted. The decision has been reserved until February 2025.