The following is the process implemented by Progressive Strata Services Pty Ltd in relation to recovery of levy arrears (special and quarterly).
i) For quarterly levies - the notice is produced and posted 14 days before the 1st of the month it is due, eg levy due 1 July would be generated and sent around 15 June.
ii) By law nothing can be done to recover levies in the 30 days that are interest free. If funds are urgently required, the Owners Corporation (via ourselves) can only write and request/urge owners to pay earlier and inform them of the cash flow problem, but legally nothing can be done to get the money in before the end of the 30 days.
iii) On or around the 39th day after the due date, a reminder notice is issued similar to one you may receive if you hadn’t paid an electricity bill. A charge for this service is made automatically to their lot, to recover same.
iv) Two weeks after the 39th day notice, if it is still outstanding based on the example above, a letter would be prepared stating the rate at which interest is recovered, that they are being charged for additional services in recovering the debt, and should suitable arrangements not be made to pay the money, then the matter will be referred to a legal/debt recovery firm. Again a charge for this is added to that person’s lot statement.
v) If, after a further 14 days the funds have not been received we write to the collection company we use and instruct them to recover the money for the Owners Corporation. Under S80 of the Strata Schemes Management Act all fees in relation to recovering arrears, including ours, are payable by the owner, even if Judgment is not issued by the court. Usually the process commences with a letter of demand to let the owner know it has gone down that path. Also if they are going to avoid further legal costs, they had better act fast. It will escalate from there with Writs, Garnishees etc even bankruptcy if it becomes necessary for cash flow reasons for the Scheme, or drags on for a number of months. We have not had an unsuccessful case.
vi) Should the owner place the property on the market, a S109 prepared by us details the outstanding sums and legal fees. This is seen by both lawyers (vendor and purchaser's) so they can prepare the settlement cheques. It is the purchaser’s lawyer's job to ensure his client is not left paying for the previous owners arrears. The scheme is paid even before the bank/mortgagee.
Example for a levy due 1 June
i) Notice is sent out by PSS before 14 May. Note it is possible to receive these via email if your scheme has passed the bylaw to allow such.
ii) If not paid by no later than 26 June, and thus in the scheme’s bank account by 30 June - interest will be charged (ie note if you pay on 30 June whilst it may have left your account, it will not be in the scheme’s account till 1 July or later, and interest will be charged in accordance with the Act – and Coshott’s case – herewith link - http://www.austlii.edu.au/au/cases/nsw/NSWSC/2008/854.html.
Interest received goes to into the scheme’s account, not Progressive Strata Services. We do not have discretion as to reversing interest if payment is not made in time. That is a matter for a meeting of the Owners Corporation – you would have to provide a resolution for the next meeting, or make an application to the Office of Fair Trading.