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Here in Victoria one of the owners died more than two years ago.
Of course no fees have been paid since then and the amount is rapidly growing.
The Next-of-Kin (NOK) hasn’t advised of probate, and I haven’t received a request to complete the certificate for change of ownership, which of course won’t be done until all outstanding fees are resolved. We aren’t skint yet but will raise the fees soon to keep the budget in the black which means the amount of outstanding fees will rapidly increase.
Nor do they seem in any rush to do anything. It is the only unrenovated unit in the block (50 years old with one {now deceased} owner) and is most likely deteriorating rapidly inside. The NOK pay for the gardener to clean the courtyard as required but that’s it.
Two questions:
1) Can interest be charged on the outstanding fees, and if so is there an easy way to calculate said interest?
2) Is there a time limit on just how long until something has to be done by the surviving family?
Thanks in advance.
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Two questions:
1) Can interest be charged on the outstanding fees, and if so is there an easy way to calculate said interest?
Unlike in NSW, where penalty interest charges are the default, in Victoria they are an option which must be imposed (or not) by a simple majority decision taken at a general meeting or a strata committee meeting (if the SC has delegated powers). I say “or not” because a decision to waive penalty rates and the reasons for it must be reported to the next AGM.
The maximum penalty interest rate is 10 percent, I may be wrong on this but I believe you could calculate the money currently owed by compounding the interest starting with the first defaulting quarter. Say the lot owed $1000 from the first quarter, by the second quarter it would be $2100 ($1,000, plus 10% plus the next $1000). The following quarter it would be $3210 ($2,100 plus 10% plus another $1000 in new fees). You can see how this would add up very quickly
2) Is there a time limit on just how long until something has to be done by the surviving family? Thanks in advance.
I don’t think there is any set time so it is very important that you establish now how much is owed, with a revised bill going out every quarter. You need to establish your OC as a creditor so that you and your neighbours get what’s owed before the surviving relatives get their shares.
I think the receipt of an accumulating bill might prompt the beneficiaries of the estate to wrap things up. You can also look at establish the debt in a local court so the your OC gets the first payment to come from the sale of the unit.
Have a look at Section 29, Section 30, Section 31 and Section 32 of the Act. If the sums are high, it would be a very good idea to speak to a strata lawyer.
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Within a short time of death either an executor is appointed through the will, or the court appoints an administrator.
The executor or administrator step into the shoes of the deceased. They are legally termed the “Legal personal representative”. You can ask the next of kin who is the LPR or failing that you can search the records of the Supreme Court where the probate documents are registered.
You can then present the outstanding bills to the administrator and ask for payment. Whilst the LPR is responsible for the debt, if they don’t have the cash themselves, or the estate is asset rich but cash poor, then the strata will probably have to wait it out.
Jimmy
you may be wrong.
The penalty interest is 10% per annum, not per quarter and it’s simple interest, not compounded (that makes calculation easier).
Upon sale of a lot, the OC is always paid out any arrears. It’s what the lawyers call the adjustments. It’s for the purpose that the new owner is not stuck with the debts of the previous owner. The OC automatically gets a check for any outstanding amount.
Perhaps move a motion to engage a lawyer to start a debt collection. Include in the motion thst the defaulter pays all collection costs. Then take it to court.
This assumes that the building does not already have a motion outlining a debt collection process.
Jimmy you may be wrong. The penalty interest is 10% per annum, not per quarter and it’s simple interest, not compounded (that makes calculation easier).
I probably am wrong. However the debt is accrued quarterly so it would be reasonable to charge four penalty interest charges which would add up to the same (uncompounded).
And bear in mind this is in Victoria where the OC can decide not to impose penalty rates or chose the penalty interest they want to impose up to a maximum of 10%. Also according to this fact sheet, penalty interest can be charged 28 days after the final demand for levies (which can be issued 28 days after the initial notice).
Unlike in NSW, there is nothing (that I can find) in the OC Act about being able to charge reasonable costs of recovery to the lot owner, but that may exist in other legislation.
In this particular case, the imposition of penalty rates is really only suggested as a tactic to get the executors of the estate moving.
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The outstanding debt is the responsibility of the executor of the estate, not the beneficiaries. You can search the Supreme Court probate documents and find the name of the executor. Then lodge a claim of debt to them. The executor is required by law to pay out ALL debts before the estate is divided.
Some executors, particularly if they are related to the deceased fail to recognise the difference between estate assets and the legacy of the beneficiaries. It’s not a legacy until it’s properly distributed by the executor.