An owners corporation can recover a contribution when it has not been paid one month after it became due and payable. Interest payable on that unpaid contribution and the reasonable expenses of the owners corporation incurred in recovering those amounts can also be claimed under section 86 of the Strata Schemes Management Act 2015.
However, before an owners corporation can commence legal proceedings to recover an unpaid contribution, it must first give the debtor at least 21 days’ notice of the potential legal action and give notice of:
- the amount of the contribution, interest or expenses sought to be recovered,
- the recovery action proposed e.g. court or Tribunal proceedings,
- the date the amount was due to be paid,
- the manner in which the amount may be paid,
- whether a payment plan may be entered into,
- any other action that may be taken to arrange for payment of the amount.
A letter of demand requiring payment is often given as the notice and is the first step in the levy recovery process. In the majority of cases we find that our letters of demand will result in an unpaid contribution being paid without the need to commence legal proceedings.
If however an unpaid contribution remains unpaid 21 days after a letter of demand is given, an owners corporation can commence proceedings in a Court of competent jurisdiction to recover the amount as a debt.
Once judgment has been obtained, an owners corporations has a number of methods to recover the debt owed. These include:
- Garnishee Order, which is a court order requiring the entity it is served on (e.g. bank or employer) to pay money from the debtor’s bank account or wages to the owners corporation.
- Writ for Levy of Property, which is a court order authorising a sheriff to seize and sell assets from the debtor to repay the debt.
- Bankruptcy Notice, which puts a debtor who is an individual on notice that bankruptcy proceedings may follow if the debtor does not pay the debt.
- Creditor’s Statutory Demand, which puts a debtor who is a company on notice that winding up proceedings against the company may follow if the debtor does not pay the debt.
Our experience in levy recovery and enforcing judgments means we consult with your strata managing agent and strata committee to ensure that once judgment against an owner is obtained, the owners corporation is given considered and timely recommendations on how to enforce the judgment debt.
Please contact our office if you would like us to assist with a levy recovery matter.
Authors: Jasmin H.Singh & Allison Benson