Unpaid levies have a great impact on smaller schemes where every other owner has to carry the debt of others.
This forces future budgets on smaller schemes to be recalculated at the AGM.
Since I know there are particular owners who are notoriously late with levies and in our case one who we have before the court, I have to factor that in to future budgets.
I have to build in a buffer to run the scheme because of late payers and basically calculate the division of levies to not how many lots in the scheme, but to how many lots I know will pay their levies consistently. This causes increased levies to cover that culture in the building
I am sympathetic to genuine cases with short term financial problems, but you get many owners who claim financial distress on their investment properties. Sorry, but if you have an investment property, you are NOT in financial distress. You have the luxury of an investment property that you shouldn’t own if you can’t pay for it.
The court process can take while to work itself out, but it is necessary with some lot owners
Our case is near nine months in to a stage of garnishee orders, writ for levy of property and forced sale of property if pushed to the limit. The legal system is slow unfortunately.
When you have bad owners with bad faith, I would rather make them sell the property and perhaps take a loss even in a bankruptcy, than be stuck with an owner who will continually be an issue. Who you know may end up being forced to pay their debt by the court, but you just know they will do it all again and again.
Whilst it is standard that owners get 3 reminders about late levies automatically, the 4th stage of calling in the debt collectors is not triggered in the system. It’s up to committees to alert Strata managers when the 4th stage is triggered. Why it’s not automatically triggered in the system as the other 3 stages is a mystery to me.