Body Corporate Strata Levies large arrears

Urgent advice required please; we own a unit within a complex of 8 units. 2 of the unit owners within the complex have a combined arrears of $20,000. (One owes $7000 & the other owes $13,000). Both units are owner occupied. What should the Strata Managing Agent be doing about about this?

 

Recovering owners corporations fees from lot owners | VCAT

I hope they are already acting and just haven't told you? Is there any mention in the last AGM minutes? Basically, serve the correct notices and then take to VCAT

Sorry edit - just noticed you didn't mention which state your property is in - if not Vic, just look up the one for your state.

 

I am the only member of the strata committee so I am aware of it. I have asked the strata manager to make all the others owners aware of it so that we can vote to resolve the issue. Is VCAT in Victoria? I’ve looked up NSW Fair Trading and the information is pretty basic.

 

Thank you @KateSydney. The unit is in Wollongong within NSW. I am the only member of the strata committee so I am aware of the arrears. I have asked the strata manager to make all the other owners aware of it so that we can vote to resolve the issue. I’ve looked up NSW Fair Trading and the information is pretty basic.

Basically apply 10% interest and take it up with the local court for debt recovery.

 

ncat.nsw.gov.au

But if you google "what happens if I don't pay my strata fees nsw" or recovery of overdue strata fees nsw there seem to be a lot of legal firms happy to blog about it - my only experience is in Vic.

 

Fantastic! I have done reading to do before the AGM. Thank you very much!

 

So you're secretary, treasurer etc?

How did you get voted on to the committee as you require a quorum?

Does the strata manager hold the proxies?

How did the strata manager get appointed?

Is this a new or well established block?

 

To be honest I’m not sure of the position title. BCS rings me when maintenance is required and sends copies of work orders to me.

I volunteered to be on the committee when the other 2 members became unfinancial and none of the other owners were interested.

The Strata manager and the company BCS has been managing the Strata since we bought the property 3 years ago. It is an established block - approx 40 years old.

 

There is a way of dishonest owners to never pay their levies.
They build up the levies and court costs to the ridiculous, then they sell their unit. The day before settlement they draw a bank cheque for all the arrears etc. After settlement the next day they go to their bank and say they lost the bank cheque, without presenting it. The body corporate is not only out of the money owed on levies but the many thousands in legal costs
And unfortunately the remaining unit owners pick up the bill.
Police and the courts will not help you.
I am aware of hundreds of thousands of dollars stolen in this way.

 

I'm not exactly sure why you think this would work. Or even if it somehow did, how it wouldn't be actionable by the courts or the police.

 

Yeah, we had a recalcitrant lot owner who kept racking up strata bills of over 10K. He just kept paying the bill (plus extras) when served the bankruptcy notice.

When he eventually sold, any arrears were paid up no probs.
If your strata manager hasn't started legal action to collect the arrears I'd be spewing.

And all the other lot owners would be aware of the debt, firstly from the minutes of the AGM and then by the shortage of funds in the admin/sinking fund. We had this problem and we had to raise special levies just to pay bills.

 

The Strata Manager is reluctant to go down the path of bankruptcy or financial distress. It seems like she may too have been in this position previously and she is viewing it in a personal matter. It’s the reason I have asked her to ensure all owners are aware of the arrears. I want action to be taken. If a payment plan was in place and adhered to it would be a start however $13000 is going to take ages to pay off if only paying $100 per fortnight. The additional fees and interest will mean it is never paid off.

 

I own the company that has been defrauded 4 or 5 tines in 20+ years. Perhaps WA laws are different to NSW laws. But parties subject to a contract can not ask the police for help if one party breaches (defrauds) on the contract

 

The strata manager is meant to be working for the owners not in the sole interest of one or two owners. Give them the order to start winding up the property owners who are in arrears as it is affecting everyone's capital values.

 

No in NSW an agent must receive instructions from the owners corporation before entering the OC into a binding legal matter.

 

A bit hard when there is only one person willing to be on the executive committee and you can't get up a quorum. Maybe a legal order on the owners to form valid BC is in order.

 

Nah. Sorry. Pay up or get out. This ain't a charity.

 

This isn't true in any state. Maybe you need to get some legal advice or something, or do better in reporting alleged fraud to police.

 

LOL. Have you ever reported a bounced cheque in a contract to police? Or are you talking about case law which we all know is not how the police see matters.
1 we have had barristers try and give advice to police on fraud in banking. To no avail.
2. In all cases we went to court and won. But then how do you find the vendor who sold. Especially when it is a company that liquidates as soon as settlement occurs
3. Our company employs 34 full time staff including one full time lawyer and one full time CPA.
4. Our company spends in excess of $200k a year on legal advice.
5. The writer has lectured at various Australian and overseas conferences on Strata Law.

Unfortunately, the word of law is not the same as fact when it comes to legal matters with Police. But you are 100% wrong on contract law vs criminal law. Police aren’t interested if someone does not hold their end of a contract by bouncing a cheque.

If you practise law in NSW perhaps we can call on you on to act on our companies and clients behalf.

 

In these situations then, before property is sold, can the owner's corp lodge a caveat for the delinquencies?