Recovering Strata Levies

The strata titles legislation contains strict requirements before an Owners Corporation can launch legal action. However, this no longer applies to legal action to recover unpaid strata levies.

In what is good news for Owners Corporations that have difficulties in recovering strata levies from non-paying owners, the process of recovering overdue levies and contributions has become significantly easier with the introduction of the new Strata Schemes Management Regulation.

Previously, if an Owners Corporation wished to seek legal advice or initiate legal action the expected cost of which was above a set limit, a resolution of members to initiate the action was necessary – which required the Owners Corporation to either call an extraordinary general meeting or wait until the next annual general meeting.

This requirement was both time consuming and frustrating, and often meant that by the time any action was authorised, the outstanding levies had already increased.

Now, the Strata Schemes Management Regulations contain a specific exception allowing Owners Corporations to take legal action without the need for a resolution at a general meeting if the legal action is to recover unpaid strata contributions and interest. This change enables the Executive Committee to instruct solicitors to take debt recovery action quickly and easily.

For matters other than recovery of unpaid levies and interest, there are still limitations on the amount of costs that a Owners Corporation can incur without a resolution at a general meeting .

Click here to use our online cost-effective debt collecting system.

For more information contact Tim Somerville (02) 9923 2321 tsomerville@somervillelegal.com.au