Unpaid Owners Corporation Levies - the onus is on you as lot owner

Thursday February 14, 2019

Unpaid Owners Corporation Levies - the onus is on you as lot owner

If you are a 'lot owner' you may own an apartment, flat, unit, townhouse or office and are therefore liable for Owners Corporation levies that take care of the common property expenses such as insurance, cleaning and maintenance for gardens, stairwells, driveways, lifts and fences, etc.

Non-payment of Owners Corporation levies is a recurrent problem for many Owners Corporations and it's important that the process of recovering levies is handled correctly.

"I've changed my address"… a common excuse for non-payment of levies

As a lot owner and member of the Owners Corporation, it is your duty to update your details with the Owners Corporation and ensure payment of fees is on time.

Lot owners who have failed to pay levies raised by the Owners Corporation will frequently find themselves in unpaid Owners Corporation levy recovery proceedings. Commonly, the lot owner’s justification for non payment of fees is this – “I have moved homes. I did not receive any fee notices. I did not know I was in arrears." There is a simple answer for this. In accordance with section 135 of the Owners Corporations Act 2006 (The Act), the onus is on the lot owner to advise the Owners Corporation of any changes to the address for service of notices. By sending the fee notice and final fee notice to the owner’s last known address, the Owners Corporation has discharged their obligation under The Act.

The statutory procedure for non-payment of Owners Corporation levies is as follows

  1. The Owners Corporation issues a fee notice in the approved form seeking payment for unpaid fees.
  2. If after 28 days from the date of the fee notice the fees remain unpaid, the Owners Corporation will issue a final fee notice in the approved form demanding payment within 28 days.
  3. On the 29thday from the date of the final fee notice, under Part 11 of The Act, the Owners Corporation has the power to take action at the Victorian Civil and Administrative Tribunal (VCAT) to not only recover authorised raised fees but penalty interest and legal costs. It is not an infrequent practice for Owners Corporation managers to engage solicitors to recover unpaid levies, and on charge the cost of the solicitor's service to the lot owner.
  4. If the levy remains unpaid following a VCAT Order, enforcement action can be taken through the Courts (e.g. warrant of seizure and sale and winding-up proceeding). If the lot owner is an individual, a bankruptcy proceeding is possible for debts that exceed $5,000.

HOCW Lawyers act for many Owners Corporations, owners corporation managers and lot owners. Contact Harish Nair or Nicolle Ang for further information.

Nicolle Ang