As the financial pressure heightens with rising interest rates and cost of living increases we’re seeing more and more people default on their levy payments.

We all know that raising and collecting strata levies for building maintenance and scheme administration is fundamental to an efficiently run strata complex.

When owners corporations allow owners to fall behind in their levy payments it leads to cash flow problems for an owners corporation which could lead to critical building works not being addressed and many other issues.

Recovering Overdue Levies

The recovery of strata levies is unique and requires a detailed understanding of the various strata laws as they apply in NSW.

So, when it does become a legal issue, recovering overdue levies is highly technical with a number of steps that must be taken before commencing legal action to recover the overdue levies from an owner.

Muellers WINS Huge Levy Debt Case and Rewrites the Law!

Sale of Apartment Owned by Monk who Disappeared Overseas Sets Legal Precedent!

Owners Corporations and strata managers in NSW sometimes wonder how they can recover outstanding strata levies from owners of strata units who’ve disappeared and are nowhere to be found. Well, do not be disillusioned JS Mueller & Co Lawyers has now given hope to owners corporations and strata managers.

Read on…Sydney Morning Herald (SMH) Domain

Overwhelmed and Need Assistance with Levy Debt Recovery?

We are expert collectors and negotiators highly skilled in all essential aspects of levy debt collection.

• We have been collecting overdue levies for 30+ years.
• Our dedicated team of paralegals do nothing but levy debt collection.
• We do levy debt collection across regional and metropolitan NSW.
• We will get results.

Now you can, sit back, relax and let us collect those overdue levies for you!

Contact Us

Speak to the specialist NSW levy collections experts here, we’d be happy to assist.

We’ve been receiving a few enquiries in regards to the rules for levy recovery and payment plans under the new strata legislation.

You may recall late 2016 the new laws came into play giving lot owners the specific right to request an owners corporation to agree to a payment plan for any levies in arrears.

However, before a levy recovery payment plan can be put into place,  the owners corporation must accept the payment plan at a general meeting.

Therefore any lot owner who wants to pay their levies by instalments through a payment plan has to do the following:

1. Make a request (supported by owners who hold at least 25% of the unit entitlements) to the owners corporation to hold an EGM at which the owners corporation will consider the request of the lot owner to enter into a payment plan.
2. Pay the costs of holding the EGM at which the owner wants the payment plan to be approved.
3. Explain to the owners corporation why the payment plan should be approved to convince other owners why they should be given more time to pay their levies.
4. Have the payment plan approved at the EGM or alternatively, wait until the AGM for the plan to be approved.

Important

It’s important to note that by holding an EGM it is not guaranteed that the request for the payment plan will be approved as the entry into a payment plan is a discretionary matter for the owners corporation and it is not a mandatory requirement that such a plan has to be accepted.

Conversely, an owners corporation in a deserving and genuine case may decide to accept a request for a payment plan provided the owners corporation is of the view that the plan is likely to be adhered to and is fair and reasonable.

If a request for a payment plan is refused the lot owner may decide to take legal action in NCAT to ask for more time to pay their levies (but this would be unusual) or seek orders from the Local Court to permit the levies to be paid by instalments.

Any payment plan approved by an owners corporation cannot extend beyond 12 months and still does not prevent the owners corporation taking legal action against the lot owner to recover overdue levies.

For the full details of the new levy collection laws read our paper – Levy Collection New Laws

For NSW levy collection or strata legal advice please contact us here or call 02 9562 1266, we’re happy to assist.

During times when owners suffer financial difficulty, owners corporation can often find themselves out of pocket with overdue and unpaid strata levies. This can be a huge concern to strata communities, especially if an owner declares bankruptcy and they face the possibility of missing out on payment of any overdue strata levies or recovery costs.

So when can an owner who does not pay strata levies on time be made bankrupt? And what happens once an owner is bankrupted?

Bankruptcy is a legal process that can occur when an individual cannot pay their debts as and when they fall due.  In Australia bankruptcy is governed by the Bankruptcy Act 1966 (Cth) and is regulated by the Australian Financial Security Authority (AFSA).

Once a person becomes bankrupt, control is given up of their finances and assets to a Trustee in exchange for protection from legal action being taken against the person by an entity to which they owe money.

So, what happens when a lot owner is unable to pay their strata levies? Can they be bankrupted?

Bankrupting an Owner

• A bankruptcy notice can be issued in the event that an owner owes strata levies, is sued by the owners corporation, and judgment is entered against the owner for more than $5,000.
• Usually, we will exhaust all avenues for recovery of outstanding strata levies before seeking the strata manager/owners corporation’s instructions to bankrupt the owner.
• However, if the judgment debt is significantly higher than $5,000, the strata manager/owners corporation would normally provide an instruction for us to move to bankrupt the owner immediately after entry of judgment against them.
• Upon receipt of instructions, we perform a bankruptcy search to ensure the owner has not already been declared a bankrupt.
• If the owner is not already bankrupt, we draft and file a bankruptcy notice with the Australian Financial Security Authority – the current filing fee is $470.
• Once filed, we then serve the bankruptcy notice on the owner.
• Then, the owner has 21 days to make payment of the amount claimed in the bankruptcy notice.
• If the amount claimed remains unpaid after 21 days, we seek the strata manager/owners corporation’s instructions to issue a creditor’s petition to commence court proceedings to make the owner bankrupt.
• If the strata manager/owners corporation instructs us to proceed, we commence bankruptcy proceedings in the Federal Circuit Court against the owner.
• If the Court makes an order for the owner to be declared a bankrupt, a Trustee is appointed to the owner’s estate.

What happens once an owner is bankrupted?

• The Trustee obtains information about the owner’s financial circumstances including any assets owned by the owner and any liabilities of the owner.
• After completing his or her investigations, the Trustee will normally move to sell the owner’s assets to pay the liabilities owed by the owner.
• This often involves the Trustee obtaining possession of the owner’s strata lot and selling the lot.
• Once the lot is sold, the owners corporation is normally paid the overdue levies, interest and recovery costs.

For NSW levy collection or strata legal advice contact us here or call 02 9562 1266, we’re happy to assist.