Under the Strata Schemes Management Act 2015 (NSW) (SSMA), an owners corporation and a lot owner can enter into a formal payment plan to pay off overdue strata contributions in manageable installments.

While lot owners have the right to request a payment plan, an owners corporation is not legally obligated to accept every proposal and may reasonably refuse a request. However, owners corporations must exercise caution: adopting a blanket policy of automatically refusing all payment plan requests is unreasonable and non-compliant with strata governance standards.

Under the Strata Schemes Management Regulation 2016 (NSW) (SSMR), an owners corporation or strata committee must provide a formal written response within 28 days of receiving a completed payment plan request from an owner.

The Legal Gap: Who Has the Authority to Decide?

Importantly, neither the SSMA nor the SSMR explicitly specifies who within the scheme’s governance structure must make the decision to approve or refuse a proposed payment plan.

There is no statutory requirement that payment plans can only be determined by the owners corporation at a general meeting, nor is there a requirement restricting the decision strictly to a strata committee meeting. Equally, the legislation contains no prohibition against delegating this decision-making authority to a strata managing agent.

Because the legislation remains silent on a single designated decision-maker, authority typically falls to one of three entities.

1. The Owners Corporation at a General Meeting

The owners corporation holds ultimate decision-making power for the scheme. It can vote to approve or refuse a lot owner’s payment plan proposal by ordinary resolution at an Annual General Meeting (AGM) or Extraordinary General Meeting (EGM).

2. The Strata Committee

The strata committee is empowered to exercise the functions of the owners corporation, provided those decisions do not run counter to a decision of the owners corporation or involve matters restricted by law or by a resolution of the scheme. Unless the owners corporation has specifically restricted the committee’s power regarding financial recovery, the strata committee can formally vote on and decide a payment plan request.

3. The Strata Managing Agent

A strata managing agent can approve or refuse a payment plan if the relevant authority has been expressly delegated to them through their agency agreement or a resolution of the owners corporation or strata committee. So long as that delegated authority remains active and has not been limited or revoked the agent can legally act on behalf of the scheme to resolve levy payment plan requests.

Determining Your Scheme’s Decision-Making Authority

Whether a strata managing agent, strata committee, or owners corporation holds the legal standing to sign off on a payment plan depends entirely on the specific governance arrangements, agency contracts, and delegated authority instruments of that particular scheme.

Failing to follow correct delegation rules or missing the statutory 28-day response window can complicate levy recovery actions and expose schemes to unnecessary disputes at the Civil and Administrative Tribunal (NCAT).

Need Expert Guidance on Strata Levy Recovery and Compliance

Recovering overdue levies requires a balanced approach: protecting your scheme’s finances while remaining strictly compliant with statutory frameworks.

Our specialist team provides plain-English legal support for owners corporations and strata managers. We assist with:

• Levy Recovery Service: Full end-to-end management so you can focus on running your scheme.

• Delegated Authority: Clear policies and frameworks for managing payment plans.

• Governance Reviews: Ensuring your processes align with NSW strata legislation.

Levy Debt Recovery: Expert Advice or End-to-End Management

Need Expert Strata Law Advice?

Whether you are navigating a complex dispute or looking to protect your scheme, our specialist NSW and Sydney strata lawyers are here to help. We provide clear, practical advice on all aspects of strata law, including by-laws, strata disputes, building defects, and fast levy debt collections. Call our team on 02 9562 1266 or email us here today.

As a strata manager, your time is your most valuable asset – yet it’s often consumed by the administrative heavy lifting of managing levy arrears and payment plans. Balancing empathy for owners in hardship with your fiduciary duty to the scheme is a delicate, time-consuming task. However, the landscape has shifted.

Recent reforms have fundamentally changed the requirements for levy payment plans, placing significant pressure on strata managers to ‘dot every i and cross every t.’ What might once have been viewed as a flexible arrangement is now a strict legal obligation.

We are seeing a growing trend where the importance of the actual plan and paperwork is being underestimated; if the nuances aren’t handled with absolute precision, the owners corporation is left exposed.

At JS Mueller & Co Strata Lawyers, we believe you should be free to focus on managing communities, not chasing bank transfers or navigating complex legislative traps.

Our specialised service is designed to give you your time back by taking the complexity of debt recovery off your desk.

End-to-End Levy Recovery Service

We handle the entire lifecycle of the levy collection payment plan process, allowing you to bypass the paperwork and focus on your core priorities. Our service includes:

• Fast-Tracked Decisions: We evaluate the viability of payment requests, ensuring they are realistic and compliant with the latest reforms, so you don’t have to second-guess the legal validity of a proposal.

• Ready-to-Go Agreements: Our team drafts bespoke, legally robust agreements. We ensure the paperwork is right the first time, protecting the owners corporation from day one.

• Seamless Communication: We manage the execution and signing process directly with the lot owner, removing you from the exhausting back-and-forth.

• Automated Monitoring: Our dedicated paralegals track every payment. If a plan goes off track, we spot it instantly – saving you from manual ledger checks.

• Instant Strategic Advice: If a breach occurs, we provide immediate options for recovery, keeping the process moving without adding to your workload.

The ‘Muellers’ Levy Collection Service Advantage

For almost five decades, we have helped strata managers and committees navigate the most complex areas of law. Our team understands the technical nuances of the 2026 strata law reforms and applies them practically to ensure your schemes remain solvent and compliant.

By letting us handle the ‘heavy lifting’ of debt recovery, you reduce your professional risk and increase your capacity. We handle the precision of the law so you can handle the community.

Stop chasing payments and start reclaiming your time.

To find out more about our ‘Levy Recovery Payment Plan Services’. Click here.

Adrian Mueller I BCOM LLB FACCAL I Partner

Since 2002 Adrian has specialised almost exclusively in the area of strata law. His knowledge of, and experience in strata law is second to none. He is the youngest person to have been admitted as a Fellow of the ACSL, the peak body for strata lawyers in Australia. Profile I Linked

Contact Us

For all strata law advice including by-laws, disputes, building defects and levy collections contact our specialist NSW and Sydney strata lawyers here or call 02 9562 1266, we’re happy to assist

This week, our newsletter offers a fresh perspective, asking: can we learn from strata law around the world?

A South African Strata Lawyer with 14 years of experience. He’s observed that South African strata title shares many similarities with NSW and Australian strata laws in general. Fausto has recently moved to Australian shores, bringing his valuable insights.

“When the music changes, so does the dance.” – African Proverb

Strata law is no exception. It must evolve through reflection, adjustment, practicality and sometimes, through learning from others, some of whom may have learned from us.

For decades, South Africa studied and borrowed from the legislative frameworks of New South Wales and other Australian states in developing its sectional title (strata) laws. But in a turn of legal symmetry, is it now NSW that may have something to learn in return?

In the ongoing strata law reform locomotive in NSW, where much has been said about fairness, transparency and financial sustainability, one question seems to remain unresolved:

Do we need to protect owners who have already paid their share of a liability when the owners corporation is sued, judgment is granted against the owners corporation, and the levy debt remains unpaid by the owners corporation?

South Africa has answered that question. New South Wales has not.

An Unaddressed Exposure in NSW?

The Strata Schemes Management Act 2015 (NSW) (SSMA) permits proceedings to be brought by or against the owners corporation where lot owners are jointly liable. Section 254(3) then provides that any judgment is binding on the owners as though it were entered against them directly. Section 254(4) allows for proportional contribution by unit entitlement.

But what the SSMA does not do is protect a paying owner from further enforcement once they have already contributed their portion of the levy (e.g. paid a special levy that was raised to pay part of the contract or debt). There is no statutory barrier shielding those who have fulfilled their financial obligations from being rejoined in enforcement proceedings simply because the owners corporation, as a whole, cannot satisfy the judgment.

Smarter Strata Protection – Section 15 of the STSMA

By contrast, section 15 of South Africa’s Sectional Titles Schemes Management Act 2011 (the South African Act) seems to strike a better balance between collective liability and individual fairness.

It provides that where a creditor obtains judgment against a body corporate, and that judgment remains unsatisfied, the creditor may seek to join individual owners as co-debtors. However, and crucially, section 15(1)(c) of the South African Act expressly protects owners who have already paid their share of the debt via levies or contributions.

Here it is:

“Any member of the body corporate who has paid the contributions due by him or her … in respect of the same levy debt prior to the judgment against the body corporate … may not be joined as a joint judgment debtor in respect of the judgment debt.”

The law is therefore not blind to who has already carried their portion of the load.

The Problem with NSW’s Silence

While section 254(4) of the SSMA provides that contributions must be shared in accordance with unit entitlement, it is procedural rather than protective. It does not deal with the consequences of debt enforcement or allow an owner to raise payment as a defence to further liability. Are some owners paying twice?

The result is a system in which owners who have paid a special levy or ordinary levy linked to a judgment debt are still exposed. In addition, creditors have no clear legislative route to target only defaulting owners, and owners corporations are left with a governance vacuum when attempting to ensure proportional accountability.

Reform Through Reception

The South African legislature took a comparative, evolutionary approach to sectional title reform, drawing inspiration from both the Australian and Singaporean models, while adapting to local risk profiles. Its solution in section 15 of the South African Act is elegant and functional. It reflects an understanding that financial responsibility in community schemes must also be individualised when the collective fails.

New South Wales, for all its strata reform activity, seems to have overlooked this risk. As owners corporations turn to borrowing for capital works, insurance premium shocks, and defect remediation, the absence of a legal protection for paying owners becomes not just an oversight, but a structural flaw.

New South Wales has an opportunity to import a focused, practical reform (or adapt it accordingly): the kind that acknowledges the reality of mixed compliance within owners corporations and shields the responsible from being dragged down by the delinquent.

In this instance, it is not shameful to borrow from the borrower. It is sound lawmaking. South Africa has danced this dance already. Should NSW consider stepping in time?

Are Unpaid Levies a Problem for Your Strata Scheme?

Effective levy collection is vital for all Owners Corporations financial health. Insights suggest, robust management of arrears can protect owners from future liabilities.

JS Mueller & Co Strata Lawyers specialises in expedient and impactful levy debt recovery. With 45+ years expertise in NSW strata law, we provide prompt and decisive solutions to secure your strata scheme’s financial stability.

PS. Did you also know that NSW levy collections are set for big legal changes, to practice and procedures in 2025 later this year? Here we share the top 9 key changes.

NEED HELP WITH LEVY DEBT COLLECTION CLICK HERE NOW!

Contact Us

For all strata law advice including by-laws, building defects and levy collections contact our specialist NSW and Sydney strata lawyers here or call 02 9562 1266, we’re happy to assist.

With overdue strata levies on the rise due to the COVID-19 situation many strata schemes will soon find out how many of their owners are struggling to meet their levy commitments.

Also, recent Government announcements to personal and corporate insolvency laws will have a dramatic impact on the way overdue strata levies are recovered.

In this paper we provide:

• A Snapshot of the Changes to Levy Recovery Practice
• An Overview of those Changes
• Details of the Ramifications of the Changes
• Information about Payment Plans for Overdue Levies
• Information about Template Payment Plan Documents

After reading this paper Levy Recovery Practice Changes Due to Coronavirus if you would like a copy of our ‘template payment plan documents’ and/or would like assistance with managing your levy recovery payment plans please email jsmmarketing@muellers.com.au

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

On 22 March 2020, the Australian Government announced a further economic response to the Coronavirus that will effect levy recoveries.

That response includes changes to personal and corporate insolvency laws which will have a dramatic impact on the way overdue strata levies are recovered.

In this paper we provide we explain:

• A Snapshot of the Changes to Levy Recovery Practice
• An Overview of those Changes
• Details of the Ramifications of the Changes
• Information about Payment Plans
• Information about Template Payment Plan Documents

After reading this paper Levy Recovery Practice Changes Due to Coronavirus if you would like a copy of our ‘template payment plan documents’ and/or would like assistance with managing your levy recovery payment plans please email jsmmarketing@muellers.com.au

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

In a recent NSW Supreme Court case the builder brought an application to the Court seeking an order that the owners corporation provide security for costs to protect the costs of the builder in the litigation in the event the builder was successful and unable to recover his costs from the owners corporation.

So, did the court grant with the builder’s application? Owners Corporation Litigation Security for Costs

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

Thank you for your continued support. We’re looking for a new team member and reaching out to our strata community to help find one.

We’ve been servicing the strata industry for almost 40 years and as our business and the strata industry continue to grow, so does our team of strata experts.

We’re Hiring!

Do you know of a Strata Lawyer looking for a new opportunity who would love to:

• Work with an established and highly regarded law firm
• Learn from leading lawyers who are making new law
• Work across a wide variety of matters
• Progress their career
• Enjoy flexible working conditions
• Enjoy a great salary package

Confidential

If you know of a strata lawyer looking for a new opportunity please contact partner, Adrian Mueller, direct on adrianmueller@muellers.com.au

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

Thanks Strata, as a wrap up here are some useful links from 2017…

• We shared our strata knowledge through our new resource library
• We listened to you and launched our new brand and website
• We developed strata by-law and meeting templates for the new strata laws
• We tweeted, 54 times sharing the latest in strata law
• We posted, 45 times on LinkedIn with the latest updates
• We collected for over 600 new levy debt recovery matters plus our regulars
• We expanded our team to better service the strata industry

We’re taking a break from 5.30pm 21 December 2017 and returning on 15 January 2018.

We wish you and your families a safe and happy ‘Festive Season’ and look forward to working with you in 2018.

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

Owners Corporations and strata managers in NSW sometimes wonder how they can recover outstanding strata levies from owners of strata units who have disappeared and are nowhere to be found. Well, do not be disillusioned.

Muellers has now given hope to owners corporations and strata managers and has proved the naysayers wrong acting in what has been widely reported as the first ever sale of a strata unit by the NSW Sheriff.

In the recent case of The Owners-Strata Plan No. 7396 -v- Siak Hong law (unreported), in which Muellers acted for the successful owners corporation, the Supreme Court of NSW ordered that documents be served on a unit owner who was unable to be found, via substituted service orders.

More importantly, the Supreme Court also ordered the NSW Sheriff to sell the owner’s unit by a certain date to ensure the sale of the unit and recovery of overdue levies was not delayed.

This case shows that overdue levies can be recovered from an errant unit owner and that it is possible to force the Sheriff to sell a strata unit to ensure that overdue levies are paid to an owners corporation.

The outcome we achieved in the case was the result of much hard work, sheer determination and a never say die attitude to demonstrate that even in the most difficult cases it is possible for overdue levies to be recovered.

Setting a precedent, the case was also picked up by mainstream media:

• Sale of apartment owned by monk who disappeared overseas sets legal precedent
• Merry chase for mystery Malaysian monk who renounced his ‘worldly possessions’

At Muellers that is the approach we take to all our levy collection matters and that is why we are widely regarded as the leader in strata levy collections.

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

Did you know that the Sheriff can play an important role in the recovery of overdue strata levies?

How, you ask?

1. The Sheriff can be a very important ally when an owner fails to pay their strata levies, ignores repeated requests for payment and all else fails. So let’s bring in the Sheriff! Here’s how:

A Sheriff may act on a writ that we have arranged for the court to issue. Firstly, the Sheriff will attempt contact with the debtor via phone or written correspondence. If there’s no response the Sheriff will attend the debtor’s property and seize assets to be sold at auction to cover the value of the levy collection debt.

Sheriffs have been known to seize cars, bikes and household goods etc. This is called a ‘Sheriffs sale’ – it’s important to note that sometimes these can take time.

On a positive note, often just the Sheriff turning up on the debtor’s doorstep will action them into paying their strata levies.

2. Also, upon obtaining a Supreme Court Order for possession of a property, the Sheriff can then take possession of the property so it can be sold to pay the strata levy debt.

3. Sheriffs can also assist when the debtor has ignored an examination order to attend the court to explain his or her financial circumstances, an arrest warrant can be issued and the Sheriff can then arrest the debtor and take them to the court to be examined.

This can assist you in ascertaining the debtor’s financial circumstances and obtaining employment information so you can take further action and garnishee wages for payment of the outstanding strata levies.

So, how can you help?

Phone Numbers

Did you know that all Sheriff matters initially now go to the COU? From here, the Sheriff will attempt to make contact with the debtor via written correspondence and phone calls.

So, if you’re able to provide the debtor’s phone numbers at this point the Sheriff will more than often get a much better result.

Licence Plate Numbers

If the Sheriff has had no luck when phoning the person they will visit their premises during business hours and if the person isn’t available (as most people aren’t during these hours) they will leave a business card requesting them to call the Sheriff’s office.  Clearly, this is often ignored by the owner who is choosing not to pay their outstanding strata levies.

Again, if you can provide us with the licence plate number of the car the owner drives there is a strong chance that this will help us (and the Sheriff) locate the debtor quicker and recover the outstanding strata levies.

So, the Sheriff can be very effective in being that extra length of the stick to ‘poke the bear’ – and yes, some strata levy debtors will respond to the Sheriff even though they’ve already ignored repeated requests for payment of overdue levies.

Oh, and did you know…

Some interesting historical information on what was once part of a Sheriff’s role in NSW. They were once responsible for:

• Carrying out death sentences in criminal cases
• Discharging the duties of the Coroner
• Running the gaols
• Executing all the judgments, decrees and orders of the Supreme Court

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