How should an owners corporation process a payment ordered by NCAT to a lot owner?
Our owners corporation was involved in an NCAT matter with a lot owner. The tribunal found in favour of the lot owner and ordered the owners corporation to pay them a specified amount.
What is the correct process for making this payment? Should we pay it directly from the owners corporation's general account, or treat it as a separate special payment that requires specific authorisation?
A special levy needs to be raised for the amount of the costs and levied to all owners, with the exclusion of that owner.
No, the payment cannot be simply paid out of regular funds held in the owners corporation administrative or capital works fund because, in effect, the successful owner would be contributing to the costs in an action that they were successful.
Section 104 of the Strata Schemes Management Act 2015 requires that a special levy be raised for the amount of the costs and levied to all owners, with the exclusion of that owner. Like any levy, the special levy must be passed at a general meeting of the owners.
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Hugh McCormack is Managing Director of McCormacks Strata Management, Sydney’s leading strata management company for 30 years, with a 99% customer retention rate. Over the past 20 years, Hugh has transformed the company into a leading-edge strata advisory firm, partnering with some of Sydney’s most prestigious complexes – large and small – and leveraging modern technology to ensure a first-class customer experience.
Hugh holds a Bachelor of Business, majoring in Real Estate, Finance and Sustainable Development, and serves as the sole director of McCormacks Strata Management.
In addition to his role at McCormacks, Hugh is actively involved in the strata sector. He has served as Vice President of the Strata Community Association (NSW) and is a champion of education and training in the industry, striving to improve standards across the board.
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