Appendix 2: Our recommendations

Residential rates postponement.

Recommendation 1
We recommend that councils include the effect of optional rates postponement in the financial projections in their LTCCPs and Annual Plans when the amounts of money involved become significant.

Recommendation 2
We recommend that councils inform ratepayers about the potential implications of optional rates postponement for council borrowing in their LTCCPs.

Recommendation 3
We recommend that councils that experience a substantial growth in the number of applications for rates postponement devise a method of forecasting the effect of rates postponement on their future cash flow and make provision for funding this deficit.

Recommendation 4
We recommend that all councils that offer optional residential rates postponement require ratepayers to provide annual proof that their house is insured as a condition of continued postponement.

Recommendation 5
We recommend that councils organise insurance arrangements so that the premiums for a council-organised insurance product can be legally added to the postponed rates.

Recommendation 6
We recommend that councils using an actuarial model ensure that applicants understand that the results from the model are a forecast only, and depend on the accuracy of the assumptions used to generate them.

Recommendation 7
We recommend that councils using an actuarial model ensure that applicants have seen and understood both “high effect” and “low effect” results from the model.

Recommendation 8
We recommend that councils using an actuarial model regularly review the default assumptions used in the model to ensure that they reflect the best available information.

Recommendation 9
We recommend that all councils that offer residential rates postponement outside the rates postponement consortium require ratepayers to provide annual proof that their house is insured as a condition of continued postponement.

Recommendation 10
We recommend that councils offering rates postponement outside the rates postponement consortium assess the likely total amount of postponed rates, including interest and fees, for individual ratepayers at the time of application.

Recommendation 11
We recommend that all councils with residential rates postponement policies make the policy or policies, and clear supporting information, available both in hard copy and on their websites.

Recommendation 12
We recommend that all councils offering residential rates postponement ensure that publicly available information regarding rates postponement, including the application form, accurately reflects their policies.

Recommendation 13
We recommend that the consortium councils’ offer letter specify the terms under which rates postponement will be granted.

Recommendation 14
We recommend that all consortium councils ensure that all owners of a property receive information about optional rates postponement and sign the acceptance of conditional offer.

Recommendation 15
We recommend that all councils offering residential rates postponement ensure that publicly available information regarding rates postponement, including the application form, accurately reflects their policies and the criteria used by the council to determine eligibility.

Recommendation 16
We recommend that councils offering residential rates postponement outside the rates postponement consortium specify the terms under which rates postponement has been granted when they advise ratepayers that their application for rates postponement has been approved.

Recommendation 17
We recommend that councils that offer residential rates postponement outside the rates postponement consortium advise ratepayers to seek independent advice before deciding to go ahead with the postponement.

Recommendation 18
We recommend that all councils offering residential rates postponement ensure that all of the owners of a property are aware of, and agree in writing to, the rates being postponed.

Recommendation 19
We recommend that all councils offering residential rates postponement advise applicants to notify any holders of a mortgage over their property that they intend to postpone their rates.

Recommendation 20
We recommend that the rates postponement consortium councils review the fee charged for decision facilitation, to ensure that it is fair to applicants and covers councils’ costs.

Recommendation 21
We recommend that councils whose rates postponement policies state that the costs of postponement will be borne by the ratepayers concerned charge an initial fee to cover the cost of registering a notification of charge, and add a fee to postponed rates when they are paid to cover the cost of releasing the notification of charge.

Recommendation 22
We recommend that councils offering optional rates postponement monitor the administration load created by rates postponement, and consider imposing an annual administration fee to cover the cost of staff time spent on rates postponement where they do not already do so.

Recommendation 23
We recommend that all councils offering residential rates postponement regularly review all fees and interest to ensure that they continue to comply with section 88(2) of the Local Government (Rating) Act 2002.

Recommendation 24
We recommend that councils offering optional rates postponement monitor individual accounts so that they can consider stopping postponement if the value of outstanding rates is likely to breach the 80% equity cap.

Recommendation 25
We recommend that councils whose policies allow ratepayers to transfer the balance of postponed rates to a new property clarify the mechanism they would achieve this through, to confirm that their policy is practical and legally sound.

Recommendation 26
We recommend that all councils offering residential rates postponement send ratepayers an annual statement showing: the total amount of postponed rates outstanding; the interest rate(s) for the year; interest accrued; and any fees charged during the year.

Recommendation 27
We recommend that all councils off ering residential rates postponement monitor individual accounts so that the council can make informed decisions about whether it is prudent to continue to grant rates postponement to individual ratepayers.

Recommendation 28
We recommend that all councils review their residential rates postponement policies to ensure that it is clear when, and under what circumstances, postponed rates must be paid.