VIC: Pay up lot owners or lose your lot!

This article about levy recovery has been written by Phillip Leaman, Tisher Liner FC Law.

Owners Corporations have significant roles and obligations under the Owners Corporations Act 2006.

Some have a large amount of common property to look after which may include skyscraper buildings, roads and amenities such as pools, gyms and cinemas.

This brings with it a range of expenses such as:

• Insurance
• Owners Corporation management fees
• Electricity costs
• Repairs and maintenance
• Lift servicing
• Capital improvements
• Cleaning
• Gardening
• Accounting audits
• In order to fund these expenses lot owners, need to contribute by way of levies which might be annual levies set at each year’s AGM or special levies set for extraordinary expenditure.

But what if a lot owner does not pay?

Problems arise when lot owners do not pay their levies on time, particularly for smaller owners corporations with a small number of lots. This can be financially crippling and can mean that an owners corporation cannot pay their insurance on time. This is a problem for all lot owners.

Lot owners must prioritise payment of levies even when times are tough.

If a lot owner does not pay they are given a final notice and then legal proceedings can be commenced either through the Victorian Civil and Administrative Tribunal.

Once an order is made the owners corporation has several popular recovery options:

1. A warrant for seizure and sale. This involves the Sheriff knocking on the door and seizing any assets that can be sold to deal with the debt;
2. A garnishee order either against wages or other income;
3. A summons for oral examination where the lot owner comes to court to set out their assets and income.

A warrant is always the best course of action. If the warrant does not get the job done, then a warrant for seizure and sale of the lot can be obtained. This involves the sheriff selling the lot by public auction.

Ultimately, lot owners either need to pay up or face their lot being sold.

The problem for lot owners is that the longer they wait the more in interest and legal costs will be incurred by the lot owner.

It is important that owners corporations take action swiftly as levies (which are usually charged quarterly) continue to accrue and can get out of hand.

Phillip Leaman
Tisher Liner FC Law
E: [email protected]
P: 03 8600 9370

This post appears in Strata News #717.

This article has been republished with permission from the author and first appeared on the Tisher Liner FC Law website.

Have a question or something to add to the article? Leave a comment below.

Read Next:

• VIC: Q&A Can I get a Refund on My Special Levy Please?
• VIC: Q&A Levies, Lot Allocations and Entitlements

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