› Flat Chat Strata Forum › Levies and Unit Entitlements › Not financial › Current Page
I believe that either way that you look at 1/3rd of owners being unfinancial isn’t good. Most owners want to keep their levies to a minimum and as such strata budgets are mostly very tight with not a lot of room for late payers. These late payers cause real cash flow problems, especially looking at your Admin Fund.
1/3rd of a million dollar budget is $300k, if a large portion of this is Admin fund levies then it makes things difficult to manage as contractors tend to prefer to be paid on time.
Having a hard and fast levy collection process is essential otherwise before you know it one quarter behind becomes a year behind. Even if you start the process then it will still take time for the process to take effect and get the money from owners. In the worst case scenario an OC can bankrupt a non-paying owner (this is a sad occasion, but if the owner won’t sort out their finances then the OC is left with few options).
Some OC’s have resolved to implement the 10% discount if levies are paid before the due date. To do this responsibly they must budget the amount of the discount being allowed in the year. In effect this is encouraging owners to pay their levies on time, and instantly burdening those that don’t. The only problem with this is the owners that don’t pay attention to the discount and want to argue that they paid it on the due date hence should get the discount.
Per the act, the OC can recover their legal costs for collecting the levies (if they do this correctly).
Owners should be better educated about their responsibility to pay their levies on time, and also many owners have been getting themselves in over their heads, and just can not afford the costs of owning property, many look at reducing the amount of the levies as the solution, this is only going to delay the inevitable. If your budget is stretched you are living beyond your means.