A post to the Forum this week (and it’s a bumper edition) has reminded us one of the more disgraceful business practices perpetrated by less admirable strata managers.
Basically, it involves seeing the financial difficulties of strata residents as an opportunity to make extra money, rather than a challenge to be good citizens, all under the guise of doing the right thing for the owners corp.
It goes something like this: Bigstrata has a client scheme where one of the owners has fallen behind with their levies – this is not unusual.
Bigstrata also has a sweetheart deal with, or even owns a debt collection agency or legal firm that specialises in debt collection – also not unusual.
Bigstrata tells the indebted strata scheme owners corp “don’t worry, we’ll get your money back and it won’t cost you a cent.’ “Who-hoo!” says the OC treasurer, “the books will be balanced.”
When the time limit for paying the unpaid levies expires. Bigstrata’s friendly debt collectors are given the job of getting the money back, at which point all “reasonable” costs are added to the original debt, and must be paid by debtor.
The costs mount up, the mandatory 10 percent penalty interest accrues and the debt that might have been manageable gets out of control. The debt collectors make a profit, Bigstrata may get a slice of that too.
In extreme cases, this can result in the owner declaring bankruptcy, having to sell in a hurry – meaning they don’t get the full value of their unit – and ending up homeless. There have been worse outcomes too.
Think this is an exaggeration? It’s so common that the government is proposing legislation to force strata managers and owners corporations to be a bit more helpful with people who get behind with their levies.
Have a look at this story and scroll down to the section on unpaid levies to see what Fair Trading Minister Chanthivong said about it in the Second Reading of the Bill amending NSW strata law this week.
Now, we’re not saying the strata managers cited in the forum have done anything untoward, illegal or unfair. But handing a debt from a disabled owner, who is trying desperately to pay it off, to a debt collector? Come on! You can read more and have your say HERE.
Elsewhere in the Forum
- Neighbour says we can’t lease our exclusive use car spaces to other residents. That’s HERE.
- Does anyone know good software that calculates capital works plans. That’s HERE.
- Are our strata managers getting kickbacks from tradies? That’s HERE.
- Should building managers be required to have a “working with children” police check? That’s HERE.
- Blinded by common property lights. That’s HERE.
- Committee refuses to deal with bee swarm on common property. That’s HERE.
- Does converting a two-bedder into a three bedder require more permission that a strata committee OK? That’s HERE.
- Our unit entitlements are unfair – how do we fix them. That’s HERE.
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› Flat Chat Strata Forum › Current Page
A post to the Forum this week (and it’s a bumper edition) has reminded us one of the more disgraceful business practices perpetrated by less admirable
[See the full post at: Forum: Disabled owner thrown to debt collectors]
The opinions offered in these Forum posts and replies are not intended to be taken as legal advice. Readers with serious issues should consult experienced strata lawyers.
› Flat Chat Strata Forum › Current Page
› Flat Chat Strata Forum › Current Page