Levies – Breaking it downdeveloper
As an owner, you will have to budget for levies in order to fund the annual running expenses of the Owners Corporation and its long-term maintenance. Ultimately, this protects the value of your financial investment. Below are our most frequently asked questions when it comes to levies:
Q: The Owners Corporation has sent me a levy notice. Do I have to pay it?
A: Yes. You must pay it by the due date. You cannot object to a levy by not paying it. Penalties apply for non-payment.
Q: The Owners Corporation keeps putting up the levies. What can I do?
A: Levies are decided at the annual general meeting and must be discussed and accepted by a vote of the owners. You can vote for or against the proposed levy amount or put up a motion for a different levy amount if you wish. A strata manager may put a motion for an increase in levies on the meeting agenda but cannot impose levies. Levies are normally only increased in line with escalating running costs of your building, or if there is a need to do new works or there are additional expenses. You may ask why the increase is being made if you are not sure. If you are concerned about rising costs you could try to negotiate paying in instalments. If you think the levies are too high, you can lodge an application for mediation with Fair Trading to try to resolve the matter.
Q: I did not get a levy notice, so I have not paid anything for a while. Is this a problem?
A: Your levies must be paid whether you receive a notice or not. Unpaid levies mean you will not be able to vote at meetings. To ensure you receive all notices, for both levies and notices, make sure your current address is correct with your strata manager. You can pay your levies any time up until a meeting starts, to be financial and therefore eligible to vote.
Q: Do unpaid strata levies incur penalty interest?
A: Yes. The penalty interest rate varies between states and territories but is generally comparable to what you would be charged for non-payment of council rates, which is approximately 10%. Any costs in recovering a debt are also entirely payable by the debtor. For specifics, please refer to the relevant legislation for your state or territory. For example, in New South Wales, Owners Corporations can impose a charge of 10% simple interest for levies not paid within one month of their due date. The Owners Corporation can also take debt recovery action through the local court.