Question: If an owner can’t pay a levy fee, is the outstanding amount added to the levy the following year for all owners? Are owners expected to pick up the shortfall? Can an owner be forced to sell if they don’t pay their levies?
Answer: Debt recovery proceedings do not require the sale of the unit.
A unit owner is required under the Unit Titles (Management) Act 2011 to pay levy contributions in full by the due date stated in the notice. If a levy remains unpaid after the due date, it is subject to interest at an annual rate of 10%, or other such amount (not more than 20%) agreed by the owners corporation by special resolution.
S95 (1) if the Act states that “ïf an amount owing to an Owners Corporation is not paid on or before the date it is payable, the Corporation may recover the amount as a debt from the unit owner, together with interest under S94”.
Any late payment fee or interest is the responsibility of the individual unit, not all owners. Any unpaid contribution is not added to the corporations budget the next year. However, depending on how well the owners corporation is funded, it may be necessary to supplement the budget with an additional amount to fund the shortfall until the debt is repaid.
Following reasonable attempts by the strata manager to collect outstanding fees, the executive committee can agree to refer the matter for debt collection, either through a debt collection agency or legal firm. If the debt is not paid by the time the Magistrate’s Court issues a judgment, assets (other than the unit itself) may be seized, or if seizure of assets can’t occur, then funds may be garnished from a bank account until paid in full. In rare cases, unpaid debts may result in bankruptcy for debts in excess of $10,000. Debt recovery proceedings do not require the sale of the unit. The unit is typically only seized by the mortgage.
This post appears in Strata News #757.
Nina Cannell
Signature Strata
E: nina@signaturestrata.com.au
P: 02 6185 0347
Re: Question: In the ACT, are there any rules or regulations around how much notice Strata must give before a levy (or Special levy) is due?
An AGM held in mid-January of a reduced quorum voted for an implementation of a loan and consequential increase of levy to cover the anticipated loan repayment.
(Note: the loan has not been signed as of today).
* A week after the AGM a first levy notice was issued (that asked for the previous September payment which was not issued due to the late AGM).
* A week later again a second levy notice was issued (same reason)
According to the post, there needed to be 28 days notice to owners of an increase, is that right? Or is this all above board?
* When there is a reduced quorum, is there a time period before levy increases can be implemented or is it immediate?
I appreciate your clarity.
“My strata fees have been increased by a whopping 54 %, is this legal? And what recourse do I have ?” Was the levy increase approved by a resolution of the AGM? If so, it is legal. Presumably a majority of the owners attending the AGM (in person or by proxy) agreed to a budget that included the increased levy for the coming year. If they agreed to the budget, they presumably agreed that the increased spending was necessary and/or appropriate.
As for recourse, it is possible to overturn a general meeting resolution by resolution of a subsequent general meeting. If 25% of owners petition the executive committee to hold a new general meeting and you state the purpose. In this case the purpose of the new general meeting would be to put a motion for a resolution to reduce the levies. You would need to convince a lot of owners that the AGM decision was wrong.
Alternatively, you could apply to the Tribunal for an order to overturn the AGM decision on the grounds that it was ‘unreasonable’. That would be difficult if a budget with justification had been presented to the AGM and agreed by a majority of owners.
Thanks so much for your well written, easy to read informative articles.
RE a levy for balcony repairs. S.78 of the UTMA has a provision for a special resolution that “may provide that only stated unit owners, or unit owners in a stated class, are required to pay a particular contribution, or a contribution of a particular kind.”
So, a general meeting might agree by special resolution that only units with a balcony are required to contribute to the balcony repair costs.
Otherwise, I would expect that all would contribute in proportion to their unit entitlements.
My strata fees have been increased by a whopping 54 %, is this legal? And what recourse do I have ?