We thought readers might be interested in a recent appointment run in the Melbourne office concerned with property matters after death, and surprisingly a colony of rats.
The appointment started as no more than a standard Creditor’s Petition. The Petitioning Creditor was an Owners Corporation (a body corporate) and the debt was an unpaid Owners’ Corporation Levy. An unfortunate fact of life is that we are seeing more and more bankruptcies resulting from Owners Corporations proceeding against their members for unpaid levies.
After months of attempting to locate the bankrupt, we became aware that he was deceased. We learned that he had in fact been deceased at the time of the presentation of the petition. As a result, we had some doubt as to whether or not the Order under which we had been appointed as Trustees would be valid.
The Coroner’s report indicated that it was likely that the bankrupt had been deceased for at least 6 months. As a result, we recommended to the Petitioning Creditor that it may be prudent to have the Order verified.
As a result, the Petitioning Creditor made an application pursuant to which we were appointed Trustees of Part 11 Bankruptcy (Deceased Estate). We were aware that the bankrupt was the owner of the property despite the fact that he was not on title. He had not bothered to have the title transferred into his name despite 10 years passing from the time he purchased the property. It appears that he had some misconceived thoughts that the Owners Corporation or any other creditor would not be able to track him down if the property was not in his name.
We are currently in the process of having the title transferred to his name. We have also learnt that the bankrupt was a diagnosed hoarder (there is an actual medical condition called disposophobia). This has meant that the clean-up costs to bring the property to a state in which it can be marketed are immense. Our first quote to clean the property was $80,000 plus GST. Readers should note that the property is only a two bedroom unit.
Since the bankruptcy started we have been fortunate enough to locate a bank account in the bankrupt’s name with a significant sum of money. This should be enough to pay all creditors in full, the costs of the administration and provide a significant surplus. Unfortunately, the bankrupt died without a Will and, as a result, we and his daughter are endeavoring to obtain letters of administration.
This is just one of many examples which shows that you never know what you will come across when being appointed to a bankruptcy. In the meantime, the Owners Corporation has managed to have the rats exterminated.