Levy Framework
Property owners pay an annual levy (sometimes referred to as a ’contribution’ or ‘fees’). This is to help maintain and repair common property, and to meet running costs and protect your community.
At the community’s general meeting, a proposed budget is provided as part of the agenda for the meeting. The budget sets out the total levy charges to owners. The budget should also set out when levies should be paid – typically, 4 times per year.
After reviewing the financial statements and the proposed budget, owners vote on a ‘motion’ to approve them.
A majority owners attending a community’s general meeting must vote in favour to approve the proposed levy amount, which, for standard strata levies, are typically broken into 4 instalments to be paid during the community’s financial year.
It is recommended that an owner always attend the community’s general meeting to ask questions and ultimately vote on the budget and the levies proposed.
Your Legal and Financial Obligation
If you own a property in a strata scheme in New South Wales (NSW), you are legally required to pay these strata levies and failure to pay your strata levies can have serious consequences, including the immediate impact of:
- Interest and Fee Charges: The owners corporation is entitled to charge you interest on overdue levies. This rate can be up to 10% per annum, calculated daily, unless the owners corporation resolves otherwise. There may also be other owners corporation collection fees charged
- Loss of Voting Rights: If your levies are not paid, you may lose your right to vote at meetings of the owners corporation until your arrears are cleared.
Legal Action and Debt Recovery
If an owner continues to neglect payment, the owners corporation can take further action to recover the debt. This typically involves:
- Formal Notices and Reminders: You will receive reminders and formal notices requesting payment.
- Debt Recovery Proceedings: The owners corporation may engage a debt collection agency or commence legal proceedings in the NSW Civil and Administrative Tribunal (NCAT) or local courts.
- Additional Costs: You may be liable for any legal costs, court fees, and recovery expenses incurred by the owners corporation in pursuing the unpaid levies.
Strata Sense Approach
Strata Sense appreciate that financial and cost of living challenges can occur at any time and are committed to work with lot owners to work through the available options on behalf of the owners corporation.
To this end, we advocate an owner communicating as early as possible if there might be difficulty is paying an upcoming strata levy instalment. Strata Sense will always progress a reasonable payment plan request to a strata committee and generally assist in setting expectations with strata committees when payment will be made.
Supporting Owners Experiencing Financial Hardship
In addition, Strata Sense advocate for owners experiencing financial difficulty in paying strata levies, to contact the National Debt Helpline which offers free, confidential and independent financial counselling to assist you in managing payments and exploring your options. For assistance, contact the National Debt Helpline on 1800 007 007. This information is also included with Levy Notices that Strata Sense send to Lot Owners.