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[PL]

Query for a NSW strata scheme.
Our OC has just changed strata managers. Usually our AGM is held in the 1st quarter of each new year but as the previous strata managers’ contract ended last week they didn’t hold the AGM or send out levy notices for the 1 April 2020 quarter. As the new strata manager has just received all records, she has not had the opportunity to review them and arrange the AGM for 2020.

This raises a query about payment of levies. All owners should have paid levies up to 31 March 2020. As no AGM has occurred, levies for this year have not yet been determined but levies fall due on 1 April 2020. So my questions are:

i)     Is the new strata manager obliged to or allowed to send out levy notices for the 1 April 2020 quarter in the same amount payable for the previous four quarters even though the AGM hasn’t been held?  The purpose is to keep the AF and CWF in credit so that cleaners, etc., can be paid. Most units in our scheme are leased and many of the leasing agents and even owners refuse to pay levies unless they receive a levy notice for each quarter. So it’s important for levy notices to be sent out.

ii)    The Act says that levies are payable even if levy notices are not received. So if the strata manager cannot issue levy notices because the AGM hasn’t been held, should the strata manager notify owners of the provisions of this section of the Act? At the same time she would advise owners that the same amount is payable each quarter until new levies are determined at the next AGM.

iii)   In either circumstance is interest payable for late payment?

We’re aware that the AF can borrow from the CWF but if sufficient levy payments aren’t made, reimbursement can’t occur by the next quarter.

We would be very grateful for your advice.

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[Mailbox]

The usual process for managing levy resolutions is for the levies for the 4 quarters of the Financial Year to be resolved upon and for the levies for the first following quarter to also be resolved. In addition the Resolution will incorporate wording to the effect that this quantum of levies CONTINUES  until otherwise resolved.

Did your last levy resolution incorporate this wording ?

Hopefully it did, so you are covered until the next general meeting.

If you DO NOT have this continuity wording, the owners corporation ( obligations & rights  fall on the OC not the strata manager) cannot  raise levies until a meeting is held to raise the levies and that of course means there is no authority to  send out levy notices.

I think you are  very aware of the measures  the OC will have to take to manage cash and for the urgent need for a general meeting, which is great.

Hope this assists

S T R A T A   A N S W E R S  PTY  LTD      practical solutions for strata living

e: solutions@strataanswers.com.au
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[PL]

Thank you for your explanation which is most helpful. We will draft the resolution wording as suggested by you for the next AGM so that we’re covered in future years.

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[Author]

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