This article explains the mandatory information about payment plans and financial hardship now required in Victorian owners corporation fee notices, while clarifying the owners corporation’s discretionary power to approve such plans and advising on compliant communication.
On 3 December 2024, we published an article on Changes to Approved Forms for Fee Notices and Final Fee Notices. These changes now require the inclusion of prescribed information regarding payment plans and financial hardship.
Lot owners experiencing financial hardship in paying their owners corporation levies on time may contact the owners corporation or the owners corporation manager to request a payment plan. However, under the Owners Corporations Act 2006 (Vic), there is no statutory obligation for an owners corporation to accept a payment plan. The decision is at the discretion of the owners corporation on a case-by-case basis, depending on whether the proposed plan is suitable for resolving the outstanding levies.
When might a payment plan be deemed unsuitable?
A payment plan may not be suitable to the owners corporation if:
- The lot owner has previously entered into payment plans but failed to adhere to them.
- The proposed payment plan is too long, unrealistic, or does not demonstrate an ability to repay the outstanding levies within a reasonable time.
- The proposed payment plan does not indicate an ability to meet payment of owners corporation levies that will become due while also adhering to the proposed payment plan.
Ensuring compliance with Approved Forms
While owners corporations can exercise discretion regarding payment plans, it is crucial that owners corporation managers ensure their fee notices and final fee notices comply with the approved forms published on the Consumer Affairs Victoria website. No additional statement beyond the prescribed content should be included in these notices.
For instance, your fee notices and final fee notices must not include a statement such as: “The owners corporation has a right not to accept a payment plan”.
The information attached to the approved forms contains the following:
Can owners corporations change, add or delete information in fee notices?
The layout of the forms can be varied to suit computer-generated systems, mailing and payment processes but must contain all information specified in the approved forms.
The main title of the notice must be ‘owners corporation fee notice’ or ‘owners corporation final fee notice’.
(Payment methods can be inserted into the space provided or incorporated into a tear off remittance slip. If space is limited, payment methods can be provided on a separate page).
The form can also include details such as:
- Other reference numbers and information needed as part of an internal administration system (e.g. owner reference number).
- The manager’s name, ABN registration number and contact details.
- Website and email details.
Otherwise no other information can be changed, added or deleted. Fee notices are approved forms under the Act. Any notice that contains information that differs from the approved form may be invalid.
Recommended actions for owners corporation managers
Given the strict limitations that the approved forms cannot be modified other than as permitted, owners corporation managers should consider alternative ways to clarify the discretionary nature of payment plans. This can be done by including the relevant information in:
- The covering letter accompanying your fee notices and final fee notices.
- The resolutions passed at the Annual General Meeting regarding the owners corporation’s debt recovery process.
In summary, while owners corporations can exercise discretion over payment plans, they must ensure strict compliance with the approved forms for fee notices and final fee notices. Any deviations from these forms can render notices invalid. For clarity on payment plans, consider using supplementary materials like covering letters or AGM resolutions.
Leila Idris and Eleni Tasiopoulos
Grace Lawyers
E: [email protected]
This post appears in Strata News #744.
Have a question or something to add to the article? Leave a comment below.
Read next:
- VIC: Changes to Approved Forms for Fee Notices and Final Fee Notices
- VIC: The Short-Stay Levy Act and its impact on Owners Corporations
- VIC: Q&A Can I get a Refund on My Special Levy Please?
This article has been republished with permission from the author and first appeared on the Grace Lawyers website.
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