Can’t pay, won’t pay

Nobody likes paying levies but who pays to run the building when others just won’t do it?

Two correspondents have this problem.  One is chair of a neighbourhood association where many owners are behind on their levies.  Ironically, this strata plan’s over-arching community association doesn’t hesitate to charge interest if they are late in kicking levies up to them.

The other one is in a small six-unit block where an unemployed widow is consistently and considerably behind on her payments.  Legal action, they fear, could lead to her either being thrown out of her home or, more likely, a token amount being paid from her Centrelink account (helping no-one).  The question in both cases is, what to do?

Especially in the case of the unemployed widow, there is an admirable desire to help your neighbours. However, you have to draw the line somewhere and that would be right on the border between being considerate and being taken for granted.

If  you can’t afford to pay your levies, other owners are entitled to say “not my problem.”

The Strata Act allows for a penalty of 10 percent interest to be charged on late levies payments.  It also allows for the costs of debt recovery to recouped from the non-payer. But that doesn’t mean that you will get all your legal fees back when you take late payers to court.  It’s more complicated than that.

However, the threat of increased charges can often get late payers to pay up.

In America, some management committees have started denying access to facilities like swimming pools and even parking to non-payers. You’d need a by-law to do that here but ‘unfinancial’ owners lose their rights to vote so passing one might be easier than it sounds.

In both of the above cases, the correspondents would be advised to contact a specialist strata lawyer who’s also experienced in debt collection  to tell them whether or not it’s worth pursuing and what the alternatives are.

You can read both cases in full on flatchat.com.au/forum.  Log on to join in the discussion or ask your own question.

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