Hi, just talked to a REA regarding an apartment that I want to sell. He is selling another apartment in the same building so I talked to him. He said he is struggling to sell because the building management is chasing $20K of unpaid strata. His apartment was under offer twice but came back. So I got to know my building has a strata problem. Has anyone dealt with this problem? How do you recover the strata and what impact is that scenario going to have?
The Strata Manager needs to be a bit (LOT) more pro-active and follow up unpaid strata levies or hand-over to a debt collector.
Strat corp may need to sue the owner with outstanding payments. There was a forum member bankrupted over something similar a while back
@Terry_w - do the levies form a charges over the title and are to be paid for from the settlement monies or by the purchaser if there's insufficient funds after secured creditors/mortgagee?
In Qld, strata fees are collected at settlement off the purchase price as a priority, even before any bank mortgage is paid (I believe). Therefore the agent shouldn't have a problem selling the unit due to unpaid strata fees. It suggests however that there may be issues with the body corporate, and therefore it would make sense to review the body corp minutes and budgets for the past 2-3 years to see what's going on.
See if you can get a strata report and have a talk to some of the lot owners that actually live in the building. There sound like there may be an issue as to how it is run, If it is just an strata manager issue, then it is a lot easier to deal with compared to lot owners at war issue.
Are there any other options available to a body corp when one of the owners refuses to pay their levies? For example, cut off their gas/electricity etc?
The BC needs to get a judgement against them and orders to sell the unit etc. A long & arduous process.
It depends on the state but body corporates have broad powers to recover unpaid levies. I wouldn't be too concerned as a purchaser as long as the body corporate manager is actively following up the unpaid levies (this will be evident from the minutes of the latest meetings and from the correspondence held by the body corporate manager). If the body corporate manager is not diligent in following up the unpaid levies you could look into when their management agreement expires (maximum period of three years in Qld) and whether the management agreement can be terminated due to their non-performance.
