Why did Council buy a block of land from a bankrupt company?
A BANKRUPT Zilzie company has had their block of land sold from under them as they racked up five years of unpaid rates.
Ray White Yeppoon held an auction on behalf of Livingstone Shire Council last month for a 693m2 block of land at 85 Cocoanut Point Dr, Zilzie.
There were originally 18 properties that were eligible when they began the land rate arrears auction process in September 2018, however many owners paid the total amount of their outstanding rates.
In the week before the auction there were still six properties eligible but when it came to the morning of the auction in March, only the Zilzie property remained.
A small crowd gathered at the auction at the Yeppoon Town Hall and there were more than 20 registered bidders.
The auctioneer put the first bid at $85,000 however this was not met by the crowd and the first registered bid was $15,000.
It then jumped to $30,000 and a few bidders fought it out up until $48,000.
The Morning Bulletin understands the reserve price was $70,000, however Livingstone Shire Council was unable to confirm this.
The block was on the market with Harcourts Yeppoon for offers over $85,000.
It was bought for $142,000 in 2013, registered to company Zilzie Pty Ltd, which was lodged in liquidation in 2014.
The company also has quite the paper trail online.
In 2010, lawyers lodged a court appeal against Rockhampton Regional Council for their refusal in a development permit for a shops, officers and restaurant at Svendesen Rd and Seaspray Dr, Zilzie.
In June 2017, the land was valued at $77,000.
At one stage, Zilzie Pty Ltd owned 182 properties that were sold off over the years.
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They are still registered owners of 400 Svendsen Rd, Zilzie, a block of three lots with a combined nine hectares assessed for land development which has been listed for sale since August 2017.
Livingstone Shire Council did confirm Zilzie Pty Ltd had accumulated five years of unpaid rates at 85 Cocoanut Point Dr.
Under section 140(2) of the Local Government Regulation 2012, the council has authority to recover outstanding rates and charges through a land sale process where the amounts have been overdue for three or more years.
Livingstone Shire Council did however say only one final bid was received at auction and it was "well below the reserve price".
The highest bidder went into negotiations with the council but did not increase their offer, causing the property to be passed in.
Under the Local Government Regulation 2012, the council was deemed to have purchased the land for the reserve amount.
The money for the purchase was taken from the capital budget.
"Reserve prices are set by council as per Section 143(1) of the Local Government Regulation 2012," a council spokesperson said.
"The reserve price was set at the statutory valuation. The valuer-general provides statutory land valuations for all rateable properties in Queensland in accordance with the Land Valuation Act 2010."
The council advised they do not commence sale of land processes without having exhausted all over payment options.
The past auction was the second time Livingstone Shire Council entered into the process and on the previous occasion no properties ultimately went to auction.
The council has made no decisions at this stage regarding the potential or intended use of the land.