These Q&As are about special levies, levy payments and overdue levies.
Table of Contents:
- QUESTION: When recovering late levy payments, can the Owners Corporation recover the costs of using a lawyer/debt collector from the recalcitrant owner?
- QUESTION: One lot owner is refusing to pay levies. What is the correct/recommended procedure to pursue debt recovery and in what order should those steps be taken?
- QUESTION: A lot owner in our 6 lot scheme has been overseas for over a year and hasn’t made a levy payment for that duration. Why would our strata wait so long to recover the debt?
- 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?
- QUESTION: We did not receive a levy invoice or a notice of arrears. The next period notice invoice for levies, strata is charging interest and there is a notice of arrears fee. Do we have to pay the arrears notice fee and interest if we never received the invoice?
- QUESTION: What happens if you get a levy notices for works you think are illegal? What rights do I have to not pay?
- QUESTION: At an AGM, should there be a motion for an extra levy or is it discussed together with the other regular contributions?
- QUESTION: On our levy notices, the levy payment periods were not included. Is this ok?
- QUESTION: What happens to the interest charged on overdue strata levies?
- QUESTION: We’ve raised a special levy for a re-roofing job on our building. 3 weeks after the payment deadline 2 lot owners have still not paid. How can we recover the money?
- QUESTION: I understand when my levy payments are due. Does the 30 day required notice period apply to Special Levies?
- QUESTION: What is a Special Levy?
- QUESTION: For the purpose of calculating overdue strata fees, could you please advise when it is deemed that an electronic transfer of a Strata unit owners levy fee is deemed to have been paid?
- QUESTION: Can the owners corporation charge interest on overdue strata fees? If so, is there a regulated, standard rate?
- QUESTION: Payments in advance are withheld to be used in the period they fall due. Is this normal practice?
- QUESTION: After calling our new strata management company for information, I have personally been charged a sum. Until the invoice is paid, I am unfinancial. Are strata management companies authorised to act as a “debt collector” for the owners corporation?
- QUESTION: Our strata is requesting we pay a special levy as over 10% of lot owners have overdue strata fees. I do not want to pay this special levy. What will happen to me?
- ARTICLE: Debt Recovery Procedure for Overdue Strata Fees in NSW
- QUESTION: What are the requirements to contact a lot owner regarding overdue strata fees? When can legal action against the lot owner commence?
Question: When recovering late levy payments, can the Owners Corporation recover the costs of using a lawyer/debt collector from the recalcitrant owner?
In a previous response you mentioned that when recovering late levy payments, the fourth letter of Demand should be “by lawyer/debt collector”. Who is preferred in the first instance, a lawyer or a debt collector, and why?
Can the Owners Corporation recover the costs of using a lawyer/debt collector from the recalcitrant owner?
If the services of a lawyer become necessary, do the lawyers charge their fees to the Owners Corporation or do they pass their fees on to the recalcitrant?
Answer: The lawyer’s fees are recoverable from the defaulting owner and form part of the overall debt.
Our practice is that the first three letters of demand are issued by our office and, if they do not generate a satisfactory response, then a lawyer is engaged to either elicit a response or commence debt recovery proceedings.
The lawyer’s fees are recoverable from the defaulting owner and form part of the overall debt.
Leanne Habib
Premium Strata
E: [email protected]
P: 02 9281 6440
This post appears in Strata News #469.
Question: One lot owner is refusing to pay levies. What is the correct/recommended procedure to pursue debt recovery and in what order should those steps be taken?
I am the “Honorary Administrator” of a self-managing strata scheme of four townhouses.
We may need to take levy recovery action against one owner who is refusing to pay the 4 equal quarterly levy contributions discussed and agreed to as an agenda item at our AGM.
I have sent several friendly reminders and a formal letter of demand to pay by 4 equal quarterly instalments as required under the NSW Strata Schemes Management Act and the Owners Corporation, but he is refusing.
The lot owner has requested to pay by setting up a periodic payment arrangement with his bank to pay in small fortnightly instalments.
After sending out reminder notices and a formal letter of demand, what is the correct/recommended procedure to pursue debt recovery and in what order should those steps be taken?
Answer: The process is as follows
Generally speaking, the process is as follows:
- 1st Letter of Demand by strata manager for unpaid levies
- 2nd Letter of Demand by strata manager for unpaid levies
- 3rd Letter of Demand by strata manager for unpaid levies
- 4th Letter of Demand by lawyer/debt collector for unpaid levies
- Legal proceedings for debt recovery are commenced
Leanne Habib
Premium Strata
E: [email protected]
P: 02 9281 6440
This post appears in Strata News #464.
Question: A lot owner in our 6 lot scheme has been overseas for over a year and hasn’t made a levy payment for that duration. Why would our strata wait so long to recover the debt?
In our residential building of 6 units, one lot owner has been overseas for more than a year and hasn’t made a levy payment for that duration. Strata have said they are in debt recovery and going through the courts.
Why hasn’t strata acted much sooner and how long can this go on before its resolved? I would have thought after 3 months of no levy payments and strata would issue a debt recovery action letter to the owner.
Answer: The strata manager was waiting for instructions from the strata committee
You are correct – the strata manager appears to have been tardy in chasing the levies, however, it may be that the strata manager was waiting for instructions from the strata committee. The practice is usually that 3 separate reminder letters are sent with formal debt recovery proceedings being instituted thereafter.
Leanne Habib
Premium Strata
E: [email protected]
P: 02 9281 6440
This post appears in Strata News #462.
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.
Michael Smythe
NSW Branch Manager
Civium Communities
E: [email protected]
This post appears in the March 2021 edition of The NSW Strata Magazine.
Question: We did not receive a levy invoice or a notice of arrears. The next period notice invoice for levies, strata is charging interest and there is a notice of arrears fee. Do we have to pay the arrears notice fee and interest if we never received the invoice?
Answer: Unfortunately, you are liable to pay the levies irrespective of whether you received the notice or not.
Unfortunately, you are liable to pay the levies, irrespective of whether you received the notice or not (see below bolded):
83 Levying of contributions
- An owners corporation levies a contribution required to be paid to the administrative fund or capital works fund by an owner of a lot by giving the owner written notice of the contribution payable.
- Contributions levied by an owners corporation must be levied in respect of each lot and are payable (subject to this section and section 82) by the owners in shares proportional to the unit entitlements of their respective lots.
- Any contribution levied by an owners corporation becomes due and payable to the owners corporation on the date set out in the notice of the contribution. The date must be at least 30 days after the notice is given.
- Regular periodic contributions to the administrative fund and capital works fund of an owners corporation are taken to have been duly levied on an owner of a lot even though notice levying the contributions was not given to the owner.
You are liable for interest and arrears etc unless the owners corporation determines generally or specifically to you that such fees will not apply.
Leanne Habib
Premium Strata
E: [email protected]
P: 02 9281 6440
This post appears in Strata News #455.
Question: What happens if you get a levy notices for works you think are illegal? What rights do I have to not pay?
What happens if you get a levy notices for works you think are illegal? The body corp have not obtained the correct council permits and I think the work is going to be order to be demolished anyway, what rights do I have not to pay for them?
Answer: Regardless of the legality of the purpose for which the money was raised, if meeting the meeting was legal and the notice for the contribution was properly issued I do not see how an owner could withhold payment.
Regardless of the legality of the purpose for which the money was raised, if meeting at which the contribution was struck was legal (e.g. notice periods were met and the voting was achieved) and the notice for the contribution was properly issued – I see no reason that an owner could withhold payment.
Should the owner withhold payment and the levies fall overdue, they will be liable for interest and risk having debt recovery proceedings take place against them.
I suggest that the owner would be best challenging the issue at the tribunal if they believe the owners corporation is acting illegally; they are otherwise able to try and convene a general meeting (by arranging a qualified request) to overturn the decisions regarding the works and the associated levy.
19 Other general meetings
- The secretary or a strata committee of an owners corporation may convene a general meeting (that is not an annual general meeting) of the owners corporation at any time.
- The secretary of the owners corporation, or another officer if the secretary is absent, must convene a general meeting (that is not an annual general meeting) of the owners corporation as soon as practicable, and not later than 14 days after, receiving a qualified request.
- A meeting may be convened on a qualified request even if the first annual general meeting has not been held.
- A request is a qualified request for the purposes of this section if it is made by one or more owners of a lot or lots in the strata scheme having a total unit entitlement of at least one-quarter of the aggregate unit entitlements.
Andrew Terrell
Bright & Duggan
E: [email protected]
P: 02 9902 7100
This post appears in the February 2021 edition of The NSW Strata Magazine.
Question: At an AGM, should there be a motion for an extra levy or is it discussed together with the other regular contributions?
At an AGM, how much detail is needed to be specified in a Motion for an extra levy?
If extra levies are needed, do we have to specify the reasons and name of company and amount etc….
Should there be a motion for this or is it discussed together with the other regular contributions?
If this is put in a special motion with all details, can it already be voted for and dealt with instead of having another extraordinary meeting to vote?
Answer: The “additional moneys” to which you refer would form part of the expected expenditure.
Because at each AGM the owners corporation must consider how much money it will need to credit to its capital works and administrative funds for actual and expected expenditure, the “additional moneys” to which you refer would form part of the expected expenditure and you would not likely need to raise a special levy because during your estimation at the AGM you will know how much you will need to be raised and you must have before you a statement of the existing financial situation of the strata scheme.
A special levy is only required if the owners corporation is subsequently faced with expenses it cannot meet from either fund, or it was not allowed for in the annual budget (and funds were required to complete specific repairs and therefore could not wait to raise moneys over a further budget period) in which case a general meeting would then be required to consider and approve a special levy.
Leanne Habib
Premium Strata
E: [email protected]
P: 02 9281 6440
This post appears in the December 2020 edition of The NSW Strata Magazine.
Question: On our levy notices, the levy payment periods were not included. Is this ok?
On our levy notices, the levy payment periods were not included. Is this ok?
After discussion the Strata Management Company agreed to include this on the levy notices, however, they do not seem to be following the usual accounting quarters as per the financial year. Why is this?
Answer: Levy notices don’t have to state the period they cover but it’s good practice to include it.
- Levy notices don’t have to state the period they cover but it’s good practice to include it.
- There’s no requirement for levy periods to cover the same 12 months as the financial year (and much of the time they won’t – it’s just a matter of collecting the total over 4 quarterly instalments).
Andrew Terrell
Bright & Duggan
E: [email protected]
P: 02 9902 7100
This post appears in the November 2020 edition of The NSW Strata Magazine.
Question: What happens to the interest charged on overdue strata levies?
Answer: Interest is taken as income to the relevant fund to which the levies are outstanding.
Interest charged on outstanding levies is payable at 10% per annum and is taken as income to the relevant fund to which the levies are outstanding – administration or capital works fund.
Andrew Terrell
Bright & Duggan
E: [email protected]
P: 02 9902 7100
This post appears in >Strata News #322.
Question: We’ve raised a special levy for a re-roofing job on our building. 3 weeks after the payment deadline 2 lot owners have still not paid. How can we recover the money?
I live in a 23 lot strata complex. We are having a major re-roofing job done which has required the raising of a special levy. 3 weeks after the payment deadline 2 lot owners have still not paid.
The Strata Manager can not issue a work order until all levies are paid. Where do we go from here?
Answer: The act is clear on interest being payable 30 days after a levy falls due and collection costs being borne by the responsible owners.
If the scheme has adequate money in the bank for the works (inclusive of any accrued admin/capital works funds) they should issue a work order to proceed.
Otherwise, the act is clear on interest being payable 30 days after a levy falls due and collection costs being borne by the responsible owners.
If it’s a matter of money in the bank, the scheme could take out a loan or raise further special levies.
Andrew Terrell
Bright & Duggan
E: [email protected]
P: 02 9902 7100
This post appears in Strata News #319.
Question: I understand when my levy payments are due. Does the 30 day required notice period apply to Special Levies?
- Any contribution levied by an owners corporation becomes due and payable to the owners corporation on the date set out in the notice of the contribution. The date must be at least 30 days after the notice is given.
I understand when my levy payments are due. Does the same apply for special levies? Does the 30 day required notice period apply?
Answer: Yes, it does, the key word being ‘Any’.
Yes, it does, the keyword being ‘Any’.
Andrew Terrell
Bright & Duggan
E: [email protected]
P: 02 9902 7100
What is a Special Levy?
For a detailed explaination, take a look at this video by Michael Ferrier, Eyeon Property Inspections.
What are Special Levies?
NSW Fair Trading, on their Levies and Capital Works Funds page, provides the following definition:
Owners corporations can vote to introduce a ‘special levy’, which can sometimes be a large amount. Special levies can be sought where there are insufficient funds to cover large capital works or unforeseen works, for example, to carry out major repairs to the common property.
They are calculated according to the lot entitlement of each lot owner.
Question: For the purpose of calculating overdue strata fees, could you please advise when it is deemed that an electronic transfer of a Strata unit owners levy fee is deemed to have been paid?
For the purpose of calculating overdue strata fees, could you please advise when it is deemed that an electronic transfer of a Strata unit owners levy fee is deemed to have been paid?
Is it considered paid the moment that the funds have been accepted and a receipt issued, considering most transactions go through overnight?
Answer: Funds are deemed received when the recipient may access funds.
In our view, electronic funds transfers should be treated like personal cheques ie funds are deemed received when the recipient may access such funds, in other words, when cleared funds stand to the credit of the Owners Corporation’s bank account.
Leanne Habib
Premium Strata
E: [email protected]
P: 02 9281 6440
This post appears in Strata News #277.
Question: Can the owners corporation charge interest on overdue strata fees? If so, is there a regulated, standard rate?
Answer: Many strata schemes have difficulty with one or two owners with overdue strata fees, however, this many unfinancial lot owners is unusual.
Yes, an owners corporation may charge interest on overdue strata levies. This is regulated by:
85 Interest, discounts on contributions and payment plans:
- A contribution, if not paid when it becomes due and payable, bears until paid simple interest at an annual rate of 10% or, if the regulations provide for another rate, that other rate.
- Interest is not payable if the contribution is paid not later than one month after it becomes due and payable.
Further, the owners corporation has the right to waive interest payable.
Leanne Habib
Premium Strata
E: [email protected]
P: 02 9281 6440
This post appears in Strata News #239.
Question: Payments in advance are withheld to be used in the period they fall due. Is this normal practice?
Our strata scheme pays levies quarterly and sometimes some owners pay the entire year’s levies in advance, eg, in the first quarter.
Whilst those advanced funds are strictly accounted for by our strata manager company, they are not released for expenditure until the date of the quarter in which they would be due had they not been paid in advance. Is this normal practice? Is this a practice subject to negotiation or is it governed by NSW strata legislation?
With maintenance having been neglected in years past, we are experiencing quarterly cashflow problems in spite of dramatically increasing levies. Use of funds paid in advance could assist getting through the financial year without having to call for a Special Levy.
Answer: Any levies paid in advance will sit in the owners corporations funds and be accounted for on the balance sheet under ‘levies paid in advance’.
This doesn’t quite make sense. Any levies paid in advance will sit in the owners corporations funds and be accounted for on the balance sheet under ‘levies paid in advance’ or similar. The money will show as paid on the owners ledger and as each levy falls due, will be accounted for.
It is not uncommon that in the event of cash flow issues, owners might be called by the owners corporation to pay their levies prior to the due date and that is a matter for each owner.
Andrew Terrell
Bright & Duggan
E: [email protected]
P: 02 9902 7100
This post appears in Strata News #236.
Question: After calling our new strata management company for information, I have personally been charged a sum. Until the invoice is paid, I am unfinancial. Are strata management companies authorised to act as a “debt collector” for the owners corporation?
Our small strata of 10 units in Sydney recently changed to a new strata management company.
I have just received an invoice from them issued “on behalf of” the Owners Corporation that states: Lot !: Answering phone enquiries $82.50.
At no time was I advised that my call was to be time charged to the owners corporation and the owners corporation were entitled to recover the charge from me.
My phone call related to the validity of a motion at the last AGM.
I have declined to pay the invoice on the basis I neither have a contract with the owners corporation nor the strata management company. I have been advised that until the invoice for $82.50 is paid I am unfinancial and therefore can not vote at an upcoming general meeting.
I understand other owners who have sought advice from our strata manager under the Full Strata Management Agency Agreement were not subsequently charged by the owners corporation (who of course may not have been invoiced by the management company).
The strata manager relies on this:
The Act states that an unfinancial owner is:
“unfinancial owner” means an owner of a lot in a strata scheme who has not paid all contributions levied on the owner that are due and payable, and any other amounts recoverable from the owner, in relation to the lot.
This includes both levy payments and any other recoverable amount, such as invoices.
Is the strata manager correct in this specific case? Whilst the small amount involved sits on the levy notice as overdue strata fees I remain an unfinancial owner. I am effectively being blackmailed. Pay up or you can’t vote. This impediment goes to the heart of my issue.
If the owners corporation had invoiced me directly they would have to seek recovery of the claimed debt through the local court and I would not be unfinancial at any stage, whatever the outcome of the court action.
Are strata management companies authorised to act as a “debt collector” for the owners corporation on this issue and include the invoice on my levy notice?
If there is strength in my argument I will seek adjudication by NCAT if necessary to establish a clear precedent for the NSW strata industry. I feel that strongly.
I just wonder how many owners receive similar invoices after speaking to their strata manager?
What is my position regarding this seemingly small charge which could have significant implications in the future regarding further charges when seeking advice on strata matters?
Answer: No, the strata manager is not authorised to act as “debt” collector. Write to the strata manager and ask them for the legal basis upon which they are entitled to on-charge their costs.
While we have not reviewed the relevant strata management agency agreement, there is likely to be a line item which empowers the strata company to charge the owners corporation per phone call on a timed basis.
As for the owners corporation on-charging you, in the absence of a by-law or other agreement from you, it is unclear on what legal basis the owners corporation is doing so. You should check the by-laws applicable to your scheme to ascertain the existence of such a by-law (such by-laws are not uncommon).
So you can challenge the legal basis upon which they on-charge you and refuse to pay and take it further eg mediation etc or simply pay to ensure your financial status. You are correct in your understanding that whilst a smallish charge, if they are legally charging you, failure to pay renders you unfinancial and prevents you from being nominated/appointed to the strata committee and disentitles you to vote on all resolutions (other than unanimous resolutions).
Are strata management companies authorised to act as a “debt collector” for the owners corporation? No, the strata manager is not authorised to act as “debt” collector in the absence of clear authorisation eg by way of a by-law or other agreement in place. Most by-laws recover moneys owed to the Owners Corporation as debts due ie through the normal debt recovery channels eg local court.
Perhaps you could write to the strata manager and ask them for the legal basis upon which they are entitled to on-charge their costs before you go through legal channels noting that there is no contract, arrangement, agreement with you nor any by-law empowering them to do so.
Leanne Habib
Premium Strata
E: [email protected]
P: 02 9281 6440
These articles are not intended to be personal advice and you should not rely on it as a substitute for any form of advice.
This post appears in Strata News #214.
Question: Our strata is requesting we pay a special levy as over 10% of lot owners have overdue strata fees. I do not want to pay this special levy. What will happen to me?
I live in a 54 units complex. Last week I received a letter from strata requesting us to pay the special levy due to some 6 units having overdue strata fees. I think it is unfair so I do not want to pay this special levy. What will happen to me?
Answer: Many strata schemes have difficulty with one or two owners with overdue strata fees, however, this many unfinancial lot owners is unusual.
Unfortunately, many strata schemes have difficulty with one or two owners that are behind in paying their levies. This is normal however 6 owners in a building of 54 being in recovery is unusual.
I would suggest that your strata manager isn’t following up the levies promptly. It is so important to ensure that you appoint a strata manager that has strong processes around debt collection and control of overdue strata fees, with reminder letters to be issued against owners in arrears followed then by recovery action against any owners who still have overdue strata fees after receiving reminders.
An owners corporation can raise special levies at a General Meeting for a number of purposes including a shortfall of funds due to owners not paying their levies. A short term special levy may be required at your building to ensure that the Owners Corporation can continue to operate whilst the outstanding levies are being recovered.
I would recommend against refusing to pay this special levy as you may end up in litigation to recover your outstanding amounts. I would suggest you assist your owners corporation and pay this levy as soon as you can.
I would, however, suggest that you ask your strata manager to send you a copy of the levy collection process and policy as this may require improvement to avoid this situation in the future.
Rod Smith
The Strata Collective
E: [email protected]
P: 02 9879 3547
This article is for reference purposes only and is not intended to be a comprehensive review of the developments in the law and practice or to cover all aspect of the subject matter. It does not constitute legal or other advice and should not be relied upon this way. Readers should take legal or other advice before applying the information containing in this publication.
This post appears in Strata News #194.
Debt Recovery Procedure for Overdue Strata Fees in NSW
Do Strata Plans Need a Debt Recovery System for Overdue Strata Fees in Place? Yes is the simple answer!
Why? So a lot owner does not get too far behind in their strata levies, making it impossible to get their far overdue strata fees up to date. If a debt recovery process is part of the yearly AGM Minutes, which each lot owner receives, all the lot owners are aware of the procedure for overdue strata fees if they do have difficulty paying their levies.
Having the debt recovery procedure in the yearly AGM Minutes is also a reminder to all lot owners of the process. It ensures that the individual lot owner is aware that recovering overdue strata levies is not done on an ‘ad hoc basis’ reinforcing that there is a system in place – and this debt recovery procedure in NSW will be adhered to.
This makes the process less personal and more of a business transaction. This is exactly the way a Strata Plan should be run, as a business of the owners. Executive Committees and Strata Managers routinely obtain quotes for cleaners, gardeners, accountants, and lawyers who assist them in running the Strata Plan. However, Executive Committees and Strata Managers do not consider overdue strata fees in the same way – as a debt to the plan which should be collected as early and as quickly as possible.
I often see one lot owner in a small strata plan or a minority of lot owners in larger plans who don’t pay their levies and the strata plan can’t pay the necessary expenses as a result. The Strata Plan will then obtain a loan so that they can pay their yearly expenses whilst the minority of lot owners continue to not pay their levies and their overdue strata fees increase, placing further strain on the paying lot owners.
All lot owners should speak to their Strata Managers and have a Debt Recovery Process for overdue strata fees voted on at the next AGM and ensure that the debt recovery process is adhered to.
Bronwyn Smith
Smith Partners Lawyers
E: [email protected]
P: 02 8089 3160
Question: What are the requirements to contact a lot owner regarding overdue strata fees? When can legal action against the lot owner commence?
I was wanting some legal advice on what the requirements are to contact an owner regarding overdue strata fees? In particular, is the Owners Corporation only required to send a single letter informing the lot owner of the overdue strata fees before legal action can be pursued?
Answer: A letter of demand should be sent as it may affect the question of the Strata Plan recovering costs at the end of the court proceedings.
Legally, the overdue notice is sufficient. However, practically a letter of demand should be sent as it may affect the question of the Strata Plan recovering costs at the end of the court proceedings.
Also, a letter of demand puts the lot owner on notice that:
- the levies are outstanding and the lot owner then has the opportunity to pay the levies or question the validity of them and
- it clearly advises the lot owner that if the outstanding amount is not paid then legal proceedings will be commenced within a certain time frame e.g 7 or 14 days.
I have found that a letter of demand will also often elicit a response from the lot owner such as a payment plan.
Bronwyn Smith
Smith Partners Lawyers
E: [email protected]
P: 02 8089 3160
This article is not intended to be personal advice and you should not rely on it as a substitute for any form of advice.
This post appears in Strata News #139.
Have a question or something to add to the article? Leave a comment below.
Read More:
- NSW: Capital Works Funds: What’s new….
- NSW: When are you an unfinancial lot owner? What effect does this have?
- Cracking the Strata Fees Code
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Thanks a million for your reply to my query concerning our recalcitrant member.
I do have additional questions on this subject:
1) Is it sufficient to send “letters of Demand” by email; or must they be sent as postal mail, or even served like a summons to appear in court?
2) You mentioned the fourth letter of Demand should be “by lawyer/debt collector”
My question is which is preferred in the first instance, lawyer or debt collector, and why?
3) How can the Owners Corporation recover the costs of using a lawyer/debt collector be recovered from the recalcitrant owner?
4) If the services of a lawyer become necessary, do the lawyers charge their fees to the OC; or do they pass their fees on to the recalcitrant?
Hi No1Optimist
Leanne Habib, Premium Strata has responded to your comment in the above article.
I am the “Honorary Administrator” of a self-managing strata scheme, of four town-houses.
We may need to take levy recovery action against one owner; who is refusing to pay the 4 equal quarterly levy contributions; discussed and agreed to as an agenda item at our AGM.
I have sent him several friendly reminders; and a formal letter of demand to pay by 4 equal quarterly instalments as require under the NSW Strata Schemes Management Act and the Owners Corporation, but he is refusing.
He wants to pay by setting up a periodic payment arrangement with his bank to pay in small fortnightly instalments.
My question is: after sending out reminder notices and a formal letter of demand, what is the correct/recommended procedure to pursue debt recovery; and in what order should those steps be taken?
Hi No1Optimist
Leanne Habib, Premium Strata has responded to your question in the above article.
Hi There,
I live in a residential building of 6 units, One owner has been overseas for more then a yr and hasnt paid his levies for that duration, strata have said they are in debt recovery and going through the courts my question is why hasnt strata acted much sooner and how long can this go on for before its resolved? I would have thought after 3 months of not paying your levies strata would issue a debt recovery action letter to the owner. Please advise thank you
Hi Joseph
Leanne Habib, Premium Strata has responded to your question in the above article.
I am confused
You state
“Otherwise, the act is clear on interest being payable 30 days after a levy falls due and collection costs being borne by the responsible owners.”
Yet
The NSW STRATA SCHEMES MANAGEMENT ACT 2015 – SECT 83 states:
Any contribution levied by an owners corporation becomes due and payable to the owners corporation on the date set out in the notice of the contribution. The date must be at least 30 days after the notice is given.
Could you clear this up for me, please?