Question: 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?
Answer: 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.
This post appears in the September 2025 edition of The NSW Strata Magazine.
Hugh McCormack McCormacks Strata Management E: Hugh.McCormack@mccormacks.com.au P: 1300 991 825