Rates Bill

[Vardsy]

We are in the midst of selling our house at the moment and our rates bill just arrived on our doorstep today for $900.

It is not due for 4 weeks, our house contract goes through in 2.

Are we obligated to pay or can the new owners take this little gem and ram it in their cake holes?

[Holster]

As far as I am aware you have to pay for the % of the year you owned the house

[Sagacious]

We are in the midst of selling our house at the moment and our rates bill just arrived on our doorstep today for $900.

It is not due for 4 weeks, our house contract goes through in 2.

Are we obligated to pay or can the new owners take this little gem and ram it in their cake holes?

There will be an adjustment on settlement for the rates accrued whilst the vendor is in possesion of the property.

If the rates are charged and calculated in arrears then you will have to pay a fair amount of the $900.00 as they will no doubt relate to a period where you were almost exclusively in possession of the property if in advance then you will have to pay very little as the period to which the rates relate is yet to come and you are adiosing your cassa in a fortnight.

In any event the adjustment will be a deduction on the purchase price paid by the purchaser on a pro rata basis by reference to the period to which the rates relate.

If you pay the rates prior to settlement then the adjustment becomes a plus adjustment to the purchase price based on the amount of the period to which the rates relate that the purchasers will be in possession of the property.

Hope this clarifies the issue for you.

[Vardsy]

You must spread some Reputation around before giving it to Sagacious again.

Thanks Saggy

[ShinymetalASS]

Welcome to what I do all fucking day (apart from this).

I am in the middle of calculating settlement figures as we speak (and do so numerous times a day).

I knew sag would get in first. But fuck me, its finally a fucking conveyancing question.

That sounds like a fuck off big rates bill, are you in NSW??

If it is for this quarter, and your settlement occurs within any discount period available, just leave it and allow your buyer to provide a bank cheque at settlement for the amount. That way, it is paid. You know its paid, the buyer knows its paid, and the buyer recieves any discount open to them.

The rates adjustment, as sag said, is then treated as paid and hence the buyer has to reimburse you for the period following settlement (as technically the bill has been paid from your settlement proceeds).

Also note, if your rates bill includes water, then that will be deducted from your settlement proceeds as well (as water included is usually only read up to a month or two before the rates issue). You also use the average daily usage to work out the pro-rata amount of water up to the day of settlement, and deduct that.

Note that these adjustments should be made on the (if inside discount period) NET AMOUNT OWING (gross amount if outside any discount period). Any interest owing on late bills, or any outstanding amounts from previous bills, will not be included in the adjustment, and should simply be reflected in the total figure on the cheque drawn at settlement.

Meh. Sag made it clearer. But now you know why I get so freakin bored.

When you are doing a conveyance that is on a group title (units, etc), you have the joy of repeating this process with body corporate payments (admin and sinking fund contributions, insurance, etc). :)

[ShinymetalASS]

EDIT to above: just noticed that it is due in four and you settle in two.

DEFINITELY get a cheque drawn at settlement from the buyer, and have this included in the balance settlement monies.

Then, as I said, technically you have paid it, and the buyer will get any discount, and you know it is all taken care of. :) ..... especially if your council is as slow to update records as mmost are up here.... you'll still be the one responsible for the bill insofar as their records are concerned. Happened to a client recently. But that was because their purchaser's bank (why am I not surprised?) had not yet lodged transfers of title.