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QUESTION: We have overseas investors who are owners in our building, one of whom is currently more than $11,000.00 in arrears with Strata Levies. All notices of unpaid levies have been ignored, and currently legal action is underway to declare the owner bankrupt. This is not an isolated incident, and I believe is a common problem with overseas investors. Do you have any insight into this problem?
ANSWER: Having written a few times about the “buy and leave” syndrome that is affecting several world cities that have a high proportion of overseas investors. This is where an overseas owner buys an apartment but has no intention of either living it or renting it out in the foreseeable future. If they also neglect to pay levies the problem can be critical for the people left to pick up the tab on thier behalf.
Overseas owners have to provide an Australian address but that could be a real estate office, for all the good it does. Debt collection agencies are allowed to charge “reasonable costs” to the defaulting owner, but would that include flights to Honk Kong or Dubai as well as the costs of a local lawyer. I doubt it.
Meanwhile, entire buildings are being marketted overseas and there is the very real danger of large numbers of apartments not having their levies paid becasue their owners don’t see the point.
Bankruptcy proceedings might be the way to go but maybe we need a “buy and leave” law that says if your levies aren’t paid for a year the OC can grab the rent until the debt is cleared. And if it isn’t tenanted, then the owners corp can change the locks and give the unit to an agent to let until the levies are paid off.
One suggestion was to go after the mortgagee (if there is a mortgage) as they are probably not getting paid either. They could repossess the unit and let it or sell it to recoup everybody’s losses (and get another potential rental home back on the market where it belongs).
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