Question: Is the right to vote dependent solely on levy arrears, or what other charges can disqualify an owner from eligibility to vote?
In WA, what disqualifies an owner from voting at a general meeting? Levy arrears are a given, but what about utility charges for an embedded system charged out via the strata managers?
In essence, is the right to vote dependent solely on levy arrears? If not, what other charges can disqualify an owner from eligibility to vote?
Answer: If a lot owner has any amount owing, they are not entitled to vote.
Section 120 (1) of the Strata Titles Act 1985notes that:
The owner of each lot in a strata titles scheme is entitled to 1 vote on a proposed resolution of the strata company.
Section 120 (2)(b) notes:
However, the owner of a lot is not entitled to cast the vote attached to the lot if —
- there is an outstanding amount recoverable under this Act owed to the strata company by the owner of the lot.
As you can see, the Act notes a ‘outstanding amount’, rather than the term levy contributions. If a lot owner has any amount owing, they are not entitled to vote. This includes accounts and special levies.
This post appears in Strata News #750.
Jamie Horner
Empire Estate Agents
E: JHorner@empireestateagents.com
P: (08) 9262 0400
We have a owner in a Strata complex that is well overdue with outstanding strata fees. The owners have requested that they will pay once the properties are sold but due the fact the TWO properties have been listed up for sale without any sale they are still request the fee’s be waived until sale of properties which in present housing climate could be 12 mths or so? ( I could say waiver my fees until I sell my property which will be after I passed on)
The interest for outstanding fees is 11% from 1st May 2020 but can the Strata Management company recover Administration. cost for attempts to cost outstand fee’s?
How many or long can a owner put off paying their overdues strata fees?
Can the Strata Management company charge the owner for debit recover costs, legal fee’s & court costs?
I look forward to your response?
Kind regards
Steve
As the eaves are part of the outside of the building it should be covered by building insurance,
What is the process when I’m the only lot owner left in a lot of 3, and the owner of the other two does not respond to emails or phone calls?
The owner of the other 2 lots is the strata contact person but he has not paid the strata insurance for this year and does not answer his mobile or email. He does not occupy either property (they both sit empty atm) and I do not have his current address (although I saw him around recently after months of not seeing him at all).
I recently received a letter asking me to provide the insurance brokers with a new contact name, address and mobile number, and I feel like if I do answer this letter I will be held responsible for paying the full fee. If the fee is unpaid the insurance will be cancelled.
What should I do and what are the consequences of having the strata insurance cancelled?
What is the process when a proprietor/lot owner is not paying their strata levies? One owner hasn’t paid for 3 quarters. We are a self-run strata with 6 lots. What STA section is it governed by? Does the Strata Manager have to consult with the committee before charging interest? How do we advise the owner interest is due? Thank you
Hi Amy
I believe the above article addresses these issues.
All the best resolving the matter.
Thank you, please can someone advise if the 15% simple interest is still payable with the new strata titles act, 1 May 2020?
Hi Amy,
I have responded to your question in the above article.
My unit used to send notice of levy by post before due date but some reason I can’t get it ,so I called them when I get it ,then paid : due date 1/1/2019 ( from 1/1 / 2019 to 30/3/2019)my paid 9/1/2019.
I am very shocking I get interest and lawyer fee: $ 10.250 . My question is my paid 9 date late I am have to paid interest and they lawyer fee ???
I am very grateful to hearing from you soon .
Kind Regards : Thi
I am in the same boat. I wish there was more advice for owners of strata properties who are being pursued aggressively like this by their Strata Management/Council of Owners as it’s bringing people undone financially. It’s going to be to a point where there is no way that I will be able to pay these fees back but they won’t back down and give me a clean slate.
We have received the following comment from Marietta Metzger, magixstrata:
Regarding the following Q&A: Question: A lot owner has overdue strata levies. Are they entitled to attend the AGM? If so, can they vote? I personally do not agree that an individual lot owners position should be included within the AGM agenda financials.
While the financials show any levies in arrears as of just an amount, it should not be disclosed with an AGM agenda which owner has not paid up their levies and is in arrears.
This is only for the Council of Owners to know as it is in their duty to ensure that all levies are paid up and if not, what measures are necessary to take.
Hi Felicity
It sounds like this scheme is a new construction? If this is the case, it would be well worthwhile ensuring that an engineer or builder checks everything within the coming year so that any claim for building defects can be made within the statutory allowed period (which I think is 6 years). If not done, and defects are found later, owners will be responsible for any remedial work.
Good luck.
HI Felicity,
1. Definitely not legal unless it has been specified within an AGM or EGM.
2. Again definitely not allowed unless it has been specified within an AGM or EGM.
3. The Strata Company and the Body Corporate are the same thing, being all lot owners. If you mean the Strata Manager when you first say Strata Company then no they cannot act as the Body Corporate/Strata Company.
Our Strata company has brought forward the due date for our levies, we were advised two weeks ago. Today we receive an email saying they had seriously underestimated the amount for the levies and are significantly increasing the total for the levy by over $20,000 (between 16 apartments), with the first installment due in 3 weeks.
1. Is it legal for them to bring the due date of levies forward?
2. Can they then fine owners who budgeted for the full 6 months to pay, and now not only have to pay 2 months early, but to come up with more money on top, not to mention that they only get told of the increase 3 weeks prior?
3. Is the Strata company also allowed to act as the Body Corporate for a building that was, until the start of this year, owned by a single party, but now has 16 new owners?
Some things to ponder and consider when it comes to penalties……
The power to waive or not charge interests accrued on levies lies with the Strata Company, not the strata manager. Strata Title Act WA (1985) section 36 4(b).
There is also a tax implication if Strata Companies recovering monies from penalties. Other than the interest payable on late levies, other penalties may be seen as a non-mutual receipt, and the principle of mutuality does not apply to these types of penalty amounts.
Hi Janine. Don’t be surprised if the decision made by the owners of Units 1 & 2 in your strata complex to engage the services of a strata manager involves a builder/developer who may be hoping that your now being expected to meet the cost of these regular strata levies and fees will cause you to eventually want — or simply have no option but — to sell and move away. If you’re able to, try to find out why the owner of Unit 2 suddenly up and sold and moved away only 2 weeks after employing the strata manager given this previous owner, who was keenly in cahoots with the owner of Unit 1 to employ a strata manager, must have had a rough idea of what the strata levies and fees would amount to. If this previous owner says anything like “…it was the new high costs of strata levies and fees that made me want to sell and move away.”, it could show promise that something $neaky is at play. It wouldn’t hurt for you to contact the “Office of the Public Advocate” to see if those employed there are able to assist you in any way, and even if they can’t directly, it’s odds-on they will be able to put you in touch with not only someone who can, but perhaps also an authoritative body who might be already well ahead of the game waiting for any vulture$ (who may have an eye on your Unit’s lot) to pounce. One really can’t be too careful in matters such as this. Best of luck to you.
Hi everybody,
I live in a set of 3 x Villas in WA. I bought my Villa in 2011. I knew absolutely nothing about “Strata” and don’t even remember “Strata” being explained to me when I bought my property. I live in number 3. The wife of the owners of #1- was doing the Strata Managing for free when I bought my property right up until 2018. There is only 3 x Villas which do not warrant the services of a paid Strata Manager. The Wife decided she no longer wanted to be the Strata Manager and between her and her best friend who lived in #2, went ahead and organised for us to pay a Strata Manager. I was dead against the idea but #1 and #2 had the majority over me so a Strata Manager was hired without my consent. Two weeks after this, the lady in #2 sold her Villa and moved away leaving me stuck with a paid Strata Manager. I am home 24/7 and am a qualified Administrator. I offered to take over Managing our 3 x Villas for FREE but the wife in number #1 wanted to go all official and ignored my offer. I know Strata Management can be quite involved but like I said, there is only 3 x of us in the complex. I even offered to do an online quickie course in Strata Management, its not Rocket Science.To cut a very long unhappy story short, I am now very ill with Diabetes, Major Depression and failing Kidneys. I have worked from the age of 18 to 56 when unfortunately, due to my serious illnesses, was deemed unfit to work any further and I haven’t. I am now on a permanent “Disability Support Pension” and have to live on $450 a week to cover everything you could possibly think of including a Mortgage. I cannot meet at least 50% of my financial obligations. Last week I got a bill from the Strata Manager for $1032.16 which is $732.16 for Insurance + $300 for Fees due without fail in 9 x days.
I cannot pay this bill, its as simple as that. I am currently writing an email to the “Strata Community Association” asking if there is any form of exemption, discount, repayment plans or even waiving the bill due to illness and poverty in their Rules, Regulations or Policies. I am 60 x years old, I cannot lose my home, its all Ive got. If I lose my home, I will be become homeless. If I become Homeless, I will die within the first week. I am honestly not bragging – why would I but I suffer from 14 x different serious illnesses, conditions and disorders.
How and who can I approach about my dire and desperate situation.
I am a 10th Generation Australian with 2 x Grandfathers serving in the War 11. I cannot possibly be punished for being ill. I am so frightened this Strata Manager has the power to take away my home, Im having at least 6 x debilitating Panic Attacks a day due to the stress of this $1032.16 bill.
I do not nor will I ever have the money to pay this bill – end of story.
Please help me!.
Kindest thanks,
Janine.
As discussed aboved, there are different components that make up an overdue amlount that needs to be paid up to wipe the slate clean.
The various components can include:-
(1) the levy itself
(2) the simple interst on the overdue levy
(3) amouht that is charged by debt collection activities
(4) adminstrative amount that is charged to the Strata Company (by the Strata Managing Agent) that is on charged to the lot.
Being late for levies can render a person being unable to vote at meetings. Current STA (1985) Standard Schedule 1 14(6) says “no proprietor is entitled to vote at any general meeting unless all contributions payable in respect of his lot have been duly paid and any other moneys recoverable under the Act”……
Does this contribution include
(1) money owed to the Strata Company as a result of by-law breach?
(2) money owed to the Strata Company as a result of enforcing a by-law? For example, Strata Company has a debt recovery costs on-charging by-law, and the lot has incurred charges due to debt recovery activity.
(2) money owed to the Strata Company as a result of an agreement under STA section 37(1)(g)?
Lastly, does a council member need to be financial to vote in a Council of Owners meeting?
Thank you for your insights.
I have recently been hit with over due levies for two quarters.
Levies are $405 a quarter with $82 for sending a notice and $15 interest.
My overdues amount is around $250 which I am trying to break down.
Basically my unit was vacant for a few months and being managed by a real estate agent. I put in $1500 after a few months to cover various expenses.
Its only after I reviewed my bank statement that I found the extra cost and subsequently found out there was an ongoing email war between the real estate and the strata manager which I was unaware.of.
Is there any where I can go to get some resolution on this
Hi Alan
We have received the following reply back from Strata Martyr:
Section 36 (4)(b) is the section of the Strata Titles Act you refer to.
The prescribed rate of interest on late payment of levies is 15% simple interest.
The other charges you describe relate to administration. The simple rate can be calculated daily from the time it is overdue.
You should contact the Strata Management company and ask for a breakdown of the account if they haven’t given it to you already. Ask them how they worked out your late payment Interest.
In a separate correspondence to “The Council of Owners” ask them if they will consider waiving the interest as you have been the victim of poor service from your property manager who has poorly managed and it was never your intention to avoid payment.
The real charges here are the debt collection administration ask the Council of Owners to stop pursuing the overdue debt till ratification at the next general meeting can be gained. At the general meeting, there would be an agenda item indicating that your lot was seeking to have late payment interest waved. I doubt if the Management Company will waive their $82 fee as they have already done the work.
You should:
* pay your levy bar the late payment fees;
* Ask your Council of Owners to instruct the Strata Manager’s debt collection to cease on your lot for overdue interest.
* Request that your late payment interest fees be waived at the AGM.
* Alternately pay everything and pursue the above as reimbursement to avoid additional cost from the Strata Manager’s debt collection procedures.
A Strata Company has the ability to introduce its own late payment policy at a general meeting if owners agree.
Strata Martyr
This article is misleading. The Act does not provide for an interest free period as indicated.
Due dates are determined at the AGM and minutes are distributed to all owners.
Logically, unless the owners passed a resolution waiving interest or allowing an interest free period, interest accrues from the day after the due date.
Incongruously, during a SAT directions hearing, when I referred to the failure of our strata company/manager to charge interest from the day after the due date, the Member asked if the strata company “decided” to charge interest.
Can strata companies not charge interest unless they passed resolutions to do so?
Can strata companies recover lost income from strata managers who unilaterally decided to grant interest free periods?
We have bylaws that state that money owed for submetered utilities and parking licences can be “recovered as if they were contributions levied pursuant to section 36 (1).
The strata manager’s lawyer advised that a lit-s financial status and eligibility to vote would be dependent on the payment, prior to the commencement of a general meeting, of amounts owed for such debts on the day that notices of meetings are distributed commences
Accordingly should interest not be incurred when these debts are not paid by the “due date”. This raises several issues:
1. Can the strata company assert that the due date for utilities and parking licences us other than the AGM minuted due dates for levy payments?
2. Can interest be charged when such debts are not paid?
How frustrating for you Alan
It can be confusing.
Do remember that ALL OWNERS form the STRATA COMPANY – that includes you.
The “Strata Manager”, or probably strata management company, may have duties delegated to it but is only authorised to make charges and deductions as agreed in the contract. The management agreement should be available for you to look at if you wish to check the fees they are charging the strata company (all owners as a single entity).
Generally, to on-charge administration fees to individual owners required a motion at each AGM or a by-law to be registered on the strata plan.
However, interest is charged from the due date, which on your quarterly levy is ~$15 therefore your owner account will show (for example)
$405.00 DR due date Q1
405.00 DR due date Q2
15.19 DR interest 15% (for x days – roughly 3 months) between due dates Q1&Q2
If you have paid the first levy then the interest stops but you may owe interest on the unpaid period for two lots of levies which may not appear until due date Q3
There are assumptions that the strata company (or it’s delegate) should deal with property managers but even though in practice this happens and often not well, the legal responsibility remains with the individual owner.
The easiest way to resolve this is to
> Pay the overdue levies Q1&Q2 plus the outstanding interest as soon as possible;
> contact the strata management company representative know you have now received strata advice (rather than property manager advice), are better informed about your rights and responsibilities and apologise for the misunderstanding (that should make them better disposed to listen to you).
> request quarterly levy notices are emailed direct to you (and you take responsibility for payment by forwarding to the property manager (if rented), or pay direct (if vacant).
Note: that although it is customary for levy notices to be issued quarterly, under the Strata Titles Act 1985 there is no requirement for this to occur – notification of due dates in the minutes of an AGM is sufficient!
> ask that in this instance the admin charges be waived and that the council of owners be contacted to obtain this.
If (and only if) the representative refuses or is very difficult, request IN WRITING, details of the by-law or motion approving on-charging of fees, that was approved by the majority of owners at a properly convened annual general meeting.
Finally, be a little more active with your investment. Property is valuable and is worth the average 30 minutes a month to ensure you know what is going on. Read through the agenda and appoint a proxy for meetings if you can’t take an hour each year to attend. When minutes of that meeting arrive do read them. If there’s anything you don’t understand – ask for clarification.
I love strata and see the value of making our investments (whether as owner or investor) work hard for us. However, oversight is really best done by an interested party – usually the owner.
All the best!
We have received this comment via email from Jeff Smith, Exclusive Strata Management:
Your article raises a very topical issue that we have been discussing in our office.
The Act actually states that interest applies from the due date not 14 days after the due date.
We had previously allowed 14 days prior to applying interest, however, as this would appear to contradict the Act we have recently reverted to applying interest if the debt is not paid by the due date.
In WA, The Strata Titles Act 1985 section 36(4) states in relation to levy contributions that:
(4) Any contribution levied under this section —
(a) becomes due and payable to the strata company in
accordance with the terms of the decision to make the
levy; and
(b) if not paid when it becomes due and payable, bears
interest on the amount unpaid at the rate of simple
interest prescribed, unless the company determines
(either generally or in a particular case) that an unpaid
contribution shall bear no interest or interest at a lesser
rate; and
(c) including interest accrued under paragraph (b), may be
recovered as a debt by the strata company in a court of
competent jurisdiction and the strata company may
agree to a compromise of such a debt.
The prescribed amount is specified in the Strata Titles General Regulations 1996 section 26 which states:
“The prescribed rate of interest under section 36(4)(b) is 15%.”
In practical terms, when and if the property is sold, the agent should be made aware that there are outstanding amounts owed to the strata company. The Section 43 certificate should clearly indicate the amount outstanding against the property (including the interest). These sums, along with any other outstanding amounts against the property must be paid on or before settlement.
Simply put, simple interest is a daily calculation based on the original amount of the debt. With simple interest we do not compound (ie add) the prior interest charges to the original debt.
For the simple interest calculation, it will be best to calculate the interest accrued on each debt separately and then add all of the accrued interest together. Accrued interest is just the interest we calculate as being owing.
I have created a simple spreadsheet which will help you calculate these values. I am happy to provide such to you directly or through the operators of this web page.
I do not live in WA and thus I can not attest to whether the 15% interest your council has decided to charge is valid. Also given that the owner is now in administration, you will need to lodge a formal claim of debt with the administrators and there may be rules around how much interest they will be able to pay (eg they may only be liable for interest after the date of their appointment). Best speak to a lawyer regarding all of this.
Additional information supplied by David White, uploaded by LookUpStrata Admin:
Body Corporate – Late Penalties – Simple Interest Spreadsheet
Hi David
Thanks for your response.
It would be great to include a link to your spreadsheet in the article as a resource. Do you mind sending it through to me at nikkij@lookupstrata.com.au and I will upload it as a PDF at the bottom of your comment?
Thanks
Nikki