ARREARS RECOVERY POliCY
The following is the process implemented by Progressive Strata Services Pty Ltd in relation to recovery of levy arrears (special and quarterly).
- Normal levy notice goes out – generally 14 days before the 1st of the month it is due, eg levy due 1 July would be generated and sent around 15 June.
- By law nothing can be done to recover levies in the 30 days that are interest free. If funds are required the Owners Corporation can only request/urge owners to pay earlier, but legally nothing can be done to get the money in before the end of the 30 days.
- On or around the 39th day after the due date, a reminder notice is issued similar to one you may receive if you hadn’t paid an electricity bill. A charge for this service is made automatically to their lot, to recover same.
- Two weeks later – ie after the 39th day notice, that is if it is still outstanding at 22 August based on the example above, a letter would be prepared stating the rate at which interest is recovered, that they are being charged for additional services in recovering the debt, and should suitable arrangements not be made to pay the money, then the matter will be handled through legal channels. Again a charge for this is added to their lot statement.
- If after a further 14 days the funds have not been received we write to the collection company we use and instruct them to recover the money for the Owners Corporation. Under S80 of the Strata Schemes Management Act all fees in relation to recovering arrears, including our’s are payable by the owner, even if Judgment is not issued by the court. Initially it will start with a letter of demand from the recovery agency to let the owner know it has gone down that track, and if they are going to avoid legal fees they had better act fast. It will escalate from there with Writs, Garnishees etc even bankruptcy if it becomes necessary for cash flow reasons for the Scheme. We have not had an unsuccessful case.
Should the owner place the property on the market, a S109 which both sides lawyers obtain from us for settlement calculation detail the outstanding levies, and obviously the purchasers lawyer doesn’t want his client paying for the previous owners arrears. The scheme is paid even before the bank/mortgagee.