Redland Council to swoop on investment properties after landlord’s $110k unpaid rates bill over a decade

A Redland man with a debilitating lung disease is waging a war with Council which plans to sell his investment properties after he chalked up $110,000 in unpaid rates. WATCH THE VIDEO

Russell Island investment property owner Paul Herman outside his rental property at Shandoss Ave, Russell Island. Pictures: Contributed

A property owner has mounted a one-man campaign against a council threatening to sell his investment properties to recover $110,000 in unpaid rates and fines, some dating back to 2012.

Paul Herman, 64, rallied outside Redland City Council headquarters in Cleveland last week, holding placards claiming “deception, bullying and unjust behaviour’’.

But Redland City Council defended the auction as a last resort after years of attempting to work with Mr Herman to collect the unpaid rates and charges.

The council also said it was important for all property owners to contribute to council services through rates and charges.

Mr Herman owns two blocks of vacant land on Russell Island and two with houses on them at Shandoss Ave and Mallee St, which are rented out for $380 and $300 a week.

The council listed the two rental properties and the land at Oxley Ave and Bauhinia Drive for auction on September 12. He has until then to pay in full.

Council documents revealed the total debt of $110,442.57, including approximately $39,000 in interest.

The unpaid rates and interest on the Shandoss Ave property dated back to 2012, amounting to $43,944, while Mallee St had $31,718, unpaid since July 2015.

Both vacant land plots had unpaid rates and charges of $17,389 each, dating back to January 2016 with interest rates of about 8 per cent currently but as high as 11 per cent during some years.

Paul Herman launched his one-man protest outside Redland council. Picture: Judith Kerr

Mr Herman attributed his non-payment of rates to a debilitating lung disease, allergic broncho pulmonary aspergillosis, which caused recurring pneumonia and hindered his ability to work. He also said there was a dispute with ANZ Bank over mortgage documents, currently the subject of a complaint to the Australian Financial Complaints Authority (AFCA).

Mallee St on Russell Island, which is a 20-minute ferry trip from Redland Bay. Picture: Contributed

It is not the first time the council has tried to sell Mr Herman’s properties to recover unpaid rates.

In 2015, it listed his properties for sale when there was an $80,000 rates debt, but this was withdrawn when the rates were paid.

Mr Herman’s recent campaign began after the council denied his request for a low-interest hardship payment plan two years ago and rejected five subsequent requests, including one to pay $1180 a month.

The council demanded he pay $91,000 before it would consider a payment plan.

“I realise it is a long time for not paying rates, but I was seriously ill for a long time and I was coughing my lungs out,” Mr Herman said.

“For the last 18 months I have been desperate to do a deal with ANZ Bank because I knew there was a possibility that Redland City Council could sell the properties, which are my life savings.

“I cannot sell the properties while there is a dispute over the ANZ mortgage, which has been before AFCA for years.

“I can’t start to pay down the debt to the council because if the properties are sold at auction, that repayment money would all be lost.”

Paul Herman outside his Russell Island property in Mallee St. Pictures: Contributed

The council said it was important for all property owners to contribute to council services through rates and charges.

“An auction is the last in a long line of actions, sometimes extending over many years, that council undertakes to recover rates and charges,” it said.

“A property is auctioned only after all other avenues to recover rates have been exhausted.”

Property auctions for unpaid rates and charges are a routine practice followed by other councils, including Brisbane, Ipswich, Logan, and Moreton Bay Regional Council.

Those councils also charged interest for overdue rates but waived it for those eligible for a hardship payment plan.

Mr Herman also alleged the council was making a significant profit from his interest payments.

“The council has consistently charged me more than the allowable interest rate and in 2018, I was charged 81 per cent interest on the Mallee St property,” he claimed.

He also accused the council of not following debt collection guidelines set out by ASIC and ACCC.

Mr Herman’s properties are four of 37 southern bay island lots which will be auctioned to recoup more than $550,000 in unpaid rates and charges.

Bidding will start at 9.30am at Capalaba Pl, 14 Noeleen St, Capalaba on Tuesday, September 12.