Question: A special levy of $3000 was struck for each of our 6 owners for our driveway to be concreted. Quotes have not even been accepted as yet, but we are now being charged interest on late levy payments. Is this legal?
Answer: No debt recovery action can be taken against the owner for 30 days past the levy due date.
First of all, it is important to note that a Special Levy can only be raised by majority decision at a General Meeting. The motion to raise the funds would specify the amount to be raised, purpose of the funds and the due date of the levy.
In terms of a debt recovery action being taken, such as the interest you are being charged, no debt recovery action can be taken against the owner for 30 days past the levy due date. Once the 30 days has elapsed, interest would accrue against the levy from the due date of the levy at a rate of 10% per annum.
Please find the below section from the Strata Schemes Management Act 2015: Section 86 Recovery of unpaid contributions part 2A states
(2A) An owners corporation may, without obtaining an order under this section, recover as a debt in a court of competent jurisdiction, a contribution not paid at the end of 1 month after it becomes due and payable, together with any interest payable on that unpaid contribution and the reasonable expenses of the owners corporation incurred in recovering those amounts.
This post appears in the March 2021 edition of The NSW Strata Magazine.
Michael Smythe
NSW Branch Manager
Civium Communities
E: michael.smythe@civium.com.au
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