We have been asked a few questions from WA Lot Owners about overdue strata levies. These have been answered by Elizabeth Florence and Jordan Dinga from Abode Strata and Brian Rulyancich, StrataTAC.
Jump directly to the QUESTION you are after:
- QUESTION: Can a proxy of an unfinancial lot owner be counted as a quorum for an AGM? What section of the act shows this?
- QUESTION: Can the Strata Manager Change the locks to your premises for non-payment of outstanding strata levies?
- QUESTION: We have outstanding fees due to non payment of Strata levies. We are selling our apartment and planning on paying the full amount owing at settlement. Is this permissible?
- QUESTION: A lot owner has overdue strata levies. Are they entitled to attend the AGM? If so, can they vote?
- QUESTION: A lot owner’s personal financial problems have lead to overdue strata levies. Everyone in the building knows of the problem. Is this a privacy issue?
- QUESTION: In our self managed scheme, one owner owes money for the painting of the eaves. To recover outstanding fees, can we sue him for the money owed plus all costs to do so?
- QUESTION: Do you have any information on charging interest on overdue strata levies? We have one owner who is 10 quarters behind and the property is now in administration.
Question: Can a proxy of an unfinancial lot owner be counted as a quorum for an AGM? What section of the act shows this?
Answer: The simple answer is no, an unfinancial owner cannot be counted as a quorum for an AGM.
The simple answer is no, an unfinancial owner cannot be counted as a quorum for an AGM.
Under section 130 a quorum is made of those “who are entitled to cast the votes”.
Under section 120 an owner is not “entitled to cast the votes” if unfinancial.
130.Quorum at general meetings
- At a general meeting of a strata company for a strata titles scheme other than a 2‑lot scheme, a quorum is constituted if there are present persons who are entitled to cast the votes attached to 50% of the lots in the scheme.
- 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.
This post appears in Strata News #397.
Question: Can the Strata Manager Change the locks to your premises for non-payment of outstanding strata levies?
Answer: Short answer is no.
Short answer is no.
The strata manager and the council of owners do not have the authority to change locks due to non-payment of fees.
The strata company does not have a legal interest in a strata lot and can only recover fees in accordance with the provisions of the act and regulations. Clause 100 of the Strata Titles Amendment Act 2018 applies. The strata manager under instructions from the council of owners can impose interest at the prescribed rate and can again under instructions also instigate recovery action in a court of competent jurisdiction, Clause 100(10(d).
This post appears in Strata News #350.
Question: We have outstanding fees due to non payment of Strata levies. We are selling our apartment and planning on paying the full amount owing at settlement. Is this permissible?
We are lot owners and we are trying to sell our apartment.
We have outstanding fees due to non payment of Strata levies. We advised the Strata Manager we would pay the full amount owing at settlement. Is this permissible?
Answer: The matter would need to be referred to the council of owners for a decision.
That arrangement can be done, however, the strata manager would not have the authority to agree to the proposed arrangement and would need to refer the matter to the council of owners for a decision.
The role of the strata manager would be to advise the council as the strata manager would be privy to all the facts and would provide all relevant information to the council for due consideration.
The council of owners would have the right to impose conditions if they saw fit and also impose interest under Clause 100(4)(b) of the Strata Titles Amendment Act 2018. The role of the council of owners and the strata manager is to work on a balance so as to protect the interest of the strata company, which is paramount and their role but at the same time assist the lot owner during a difficult time.
This post appears in Strata News #350.
Question: A lot owner has overdue strata levies. Are they entitled to attend the AGM? If so, can they vote?
I live in a small strata where we self manage. We are due to have our AGM shortly and one member has not paid their quarterly levy despite repeated reminders.
Is this member entitled to attend the AGM and if so are they entitled to vote on any measures?
Answer: We look to the Strata Titles Act of WA: Schedule 1 – By-laws
Under the Strata Titles Act of WA:
- On a show of hands each proprietor has one vote.
- On a poll the proprietors have the same number of votes as the unit entitlements of their respective lots.
- Except in cases where by or under the Act a unanimous resolution or a resolution without dissent is required, 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 by the strata company from him at the date of the notice given to proprietors of the meeting have been duly paid before the commencement of the meeting.
This post appears in Strata News #326.
This post appears in Strata News #326.
Question: A lot owner’s personal financial problems have lead to overdue strata levies. Everyone in the building knows of the problem. Is this a privacy issue?
Our Strata scheme of 16 owners has one owner who has personal financial problem which have lead to overdue strata levies.
The Strata Manager has passed the problem to the Council of Owners. Consequently, all the lot owners and residents are aware of the personal financial problems via COO meeting minutes and by word of mouth.
I thought the Council of Owners didn’t get involved with Strata Fee collection and that it was the Strata Manager’s area of responsibility. The Family who is behind in payments are now aware that all their neighbours know of their personal issues. It has been highly upsetting for all involved.
Should this information not have been kept private? Can you please advise if this is how it should be?
Answer: It is standard practice that the lot owners position is included within the AGM Agenda Financials.
Having shared ownership in strata titled property is very similar in shared ownership of a business. Do you think you would have the right to know that your business partner is not meeting the contributions all parties agreed upon in order to protect your investment? The cash flow of your property relies on payments by all lot owners. What if all of a sudden you don’t have enough funds to pay the insurance renewal?
At any time, with notice, an owner is allowed to inspect the strata company records – which would bring to light the financial position of all owners.
It is also standard practice that the lot owners position is included within the AGM Agenda Financials. The Strata Manager bringing it to the Strata Councils attention is very standard so that the council can decide how they want to deal with it. Note that the Strata Manager makes no decisions. It isn’t their position to do so. We provide best practice options and assist under instructions.
I can appreciate that everyone has difficulties paying bills from time to time. I am the first to have sympathy for some owners when we deal with cost recovery. But it shouldn’t ever be to the detriment of other owners and there are systems in place for that purpose.
So ultimately to answer your question it sounds like everything is as it should be.
This post appears in Strata News #253.
This post appears in Strata News #253.
Question: In our self managed scheme, one owner owes money for the painting of the eaves. To recover outstanding fees, can we sue him for the money owed plus all costs to do so?
We have some eves that run the circumference of the building and they require painting. Money were required to be put in the Sinking fund to pay for the work. One owner has not put any money forward and is not replying to any requests relating to this subject and has previously cried “poor” on any issue.
What are our options? To recover outstanding fees, can we sue him for the money owed plus all costs to do so? He attended one meeting where we discussed the painting issue and raised no objections, but now is just stonewalling us.
We are located in Western Australia and at the moment self manage our Residential site.
Answer: Unless a specific Cost Recovery By-Law has been passed and lodged then NO, costs may not be recovered.
Are the eaves common property according to the strata plan?
Was the meeting valid?
If one or more of the below was omitted the meeting may be invalid.
Postal Delivery time: unless there is a by-law which sees electronic correspondence the agent must be posted to all owners at least 18/20 days prior to the meeting.
AGM agenda motion: was the motion within the AGM agenda and was it specific? ie what was to occur, was a quote included, the total amount to be sent and how were funds raised ie $5,000 expenditure to repair eaves payable by one instalment of $500 per unit entitlement on or before (insert date).
AGM: was there a quorum, was this motion passed by a majority?
Levies due and payable? Section 36 of the Act explains the strata company’s duty and responsibility relating to levies and collection.
Cost Recovery? Unless a specific Cost Recovery By-Law has been passed and lodged with Landgate or the Court of Jurisdiction ordering the owner to reimburse the Strata Company for Costs incurred as a result of Debt Recovery on that lot owner; then NO, costs may not be recovered. Debt Recovery Costs may not be used by the Strata Company unless they are noted within the adopted budget for the property.
Strata Manager – To avoid risk, liability, unnecessary conflict and drama we suggest employing the services of a professional strata manager.
Debt Recovery By Law – a necessary by law in today’s marketplace.
AGM agenda – It’s true that Prior Preparation Prevents Poor Performance. Yes, you may set a suitable date for an AGM however the preparation for your AGM starts after the last one. Only once you have all proper content for a clear and concise AGM, should you finalise and then set the AGM date, noting that the postal delivery time is met.
This post appears in Strata News #297.
Question: Do you have any information on charging interest on overdue strata levies? We have one owner who is 10 quarters behind and the property is now in administration.
Do you have any information on charging interest on overdue strata levies? We have one owner who is 10 quarters behind and the property is now in administration.
The council members originally started charging 15% interest simply by adding 15% to each quarter that was overdue. But now we think this was incorrect and that there is a formula to use. We are located in WA.
Answer: An unpaid levy attracts 15% a year if not paid within 14 days after it’s due. This annual amount is calculated as a daily rate to coincide with the number of days overdue.
10 Quarters is a long time between drinks. Possibly this owner does not believe they have to pay levies?
Your annual budget not receiving those funds would have put a strain on cash flow to a point where the strata company has not been able to function as per the wish of the Strata Company agreed at a general meeting.
Section 36 (4) (b) refers to interest being charged on late levies. Firstly my advice would be to pursue this debt through a Strata Lawyer.
An unpaid levy attracts interest at the rate of 15% simple interest a year if not paid within 14 days after it’s due. This annual amount is calculated as a daily rate to coincide with the number of days overdue.
When an amount comes due another 14 days applies before late payment interest starts to be calculated. A calculation whereas 365 days of the year are incorporated simple interest is an annual amount and the amount of days overdue indicates the amount of simple interest charged. This is not compounded interest in which the principal amount (Levy) being charged increases daily and is then charged interest on that increased amount.
Simple interest means the amount of interest that can be accumulated daily against the outstanding amount and depending on the number of days overdue is calculated and added on to the principal amount (Levy) for payment.
Each quarterly levy would be different, as the first quarterly levy is now 2.5 years overdue. Overdue levies should not get to this stage and should be pursued sooner. I am not an account or lawyer, I am a Strata Manager.
An accountant to work this out for you and a Lawyer to send a letter of demand would be prudent. To get some idea of what those amounts may be I would recommend a “simple interest calculator” off the internet.
All matters discussed above can be deemed of a legal nature and as such, not being a lawyer or accountant all advice given is deemed my general opinion only and I take no responsibility for any omissions or mistakes. Clarification is at your discretion as I would seek clarification myself it the matter was under my management.
This post appears in Strata News #160.
Please note this advice was provided prior to the proclamation of the new strata title amendments and will be updated in due course.
Have a question about overdue strata levies or something to add to the article? Leave a comment below.
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