The owners corporation is responsible for recovering unpaid contributions levied against owners. The Strata Schemes Management Act 2015 (the Act) came into force after 30 November 2016 and introduced some important changes to the levy recovery process.
Pursuant to section 86 of the Act the owners corporation must not commence legal proceedings to recover an unpaid contribution unless it has first provided the defaulting owner with 21 days notice of the action. When recovering contributions the owners corporation must firstly issue a letter of demand to the owner which takes into account the 21 day notice period.
A letter of demand must also include specific information which is prescribed by the Act and the Strata Schemes Management Regulations 2016 (the Regulations). The letter of demand must set out:
- The amount of the contribution, interest or expenses sought to be recovered;
- The recovery action proposed;
- The date the amount was due to be paid;
- Whether a payment plan may be entered into; and
- Any other action that may be taken to arrange for payment of the amount.
It is important that any letter of demand meets the requirements of the Act to avoid delays or unnecessary costs incurred by commencing proceeding without taking the important preliminary steps.
As part of the recent changes to NSW levy recovery the owners corporation can now commence proceedings in the NSW Civil and Administrative Tribunal or the in a Court of competent jurisdiction. The Tribunal cannot enforce judgments once orders have been made. Therefore if levy recovering proceedings are commenced in the Tribunal the order will have to be filed in the Court of competent jurisdiction before enforcement proceedings can commence. The jurisdiction of the Court is determined by the amount of the claim. Amounts up to $100,000 fall within the jurisdiction of the Local Court.
If you require any assistance or have any questions on the above, please contact Kerin Benson Lawyers on (02) 8706 7060 or email firstname.lastname@example.org