Strata NSW: Four Point Plan For Levy Recoveries

This article about levy recoveries post NSW Strata Reform commencement has been supplied by David Bannerman and Ben Robertson, Bannermans Lawyers.

A new strata schemes management act and regulation are expected to commence later this year. The new laws will not provide much assistance in relation to levy recovery. However, some changes have been made, which will in turn necessitate changes to forms and procedures. There are no transitional provisions in relation to levy recovery, so strata managers need to be ready to deal with the new rules when they commence.We suggest that strata managing agents to so by adopting the four point action plan set out below.

1. Annual General Meetings

Decide how you propose to deal with overdue levy contributions, which will differ from agency to agency, because it will depend on contractual arrangements with owners corporation clients and the extent to which a delegation has been made to the agency.Prepare a draft motion for consideration of the annual general meeting of each owners corporation client, ensuring that it accords with your agency’s procedures.

2. Statutory Notice for Recovery Action

Create a template statutory notice, noting the following:

  • 21 days’ clear notice must be provided to the lot owner for arrears not paid at the end of one month after it becomes due and payable. Ensure enough time is allowed for service, the same as that provided for serving notices on owners for meetings.
  • The notice must include:
    • The amount of the contributions, interest or expenses sought to be recovered.
    • The recovery action proposed.
    • The date the amount was due.
    • The manner in which the amount may be paid.
    • Whether a payment plan may be entered into.
    • Any other action which may be taken to arrange for payment of the amount.

Issue statutory notices promptly and consistently.