Fees in arrears – it’s an unpleasant topic that no committee wants to see and unfortunately, it is a subject that all owners corporation committees are likely to face sooner or later.
Anything to do with money is a sensitive topic, and even more so when it comes to late or unpaid fees. One way to best diffuse tensions is communication and we have some great tips for you below:
Calendars Sometimes bills get overlooked, particularly during the busy festive season. One way of helping all lot owners pay their fees on time is to issue a list of due dates for the year ahead.
At SSKB we provide all owners with a letter attached to their minutes following the adoption of their budget by the Owners Corporation. This letter details the owners’ corporation fees for the coming year and the due dates for each instalment. The letter recommends that lot owners mark the dates in their calendar or year planner. The letter also prompts owners to view their account on line and make payment on line if this is their preferred method of payment.
The Fee Process
The Victorian Civil and Administrative Tribunal (VCAT) outlines a straight forward procedure that provides the due dates for a fee notice and Final Fee Notice followed by the ability for the Owners Corporation to proceed to VCAT to retrieve unpaid fees. Fee notices are issued a month in advance of the due date to enable owners sufficient time to receive the notice and make payment on time.
A helpful reminder letter should be enough to spur most property owners into making their payment rather than proceeding to VCAT, and SSKB send this reminder notice shortly after the fee notice falls due to owners who may have missed making their payment on time.
|Fee Notice||Due date||Reminder letter||Final notice||Letter of Demand||Legal/VCAT|
|15 October||1 December||14 December||1 January||February||After February|
SSKB offer further options to the OC to collect outstanding funds in an attempt to avoid VCAT such as sending a letter of demand followed by attempts to contact the owner to recover the outstanding amounts. Should this not be successful, then the committee can send the account for collection.
Your owners corporation is entitled to recover costs associated with the recovery of the debt, but be sure to check your rules to see whether your owners corporation can charge interest on the amount in arrears.
The maximum rate of interest that your owners corporation can charge on overdue fees is determined by the Penalty Interest Rates Act 1983.
If the owner hasn’t responded, then depending on the resolutions of your Owners Corporation the matter can proceed to VCAT or straight to the Magistrates court to obtain judgement. In a very worse case scenario, the owners corporate could enforce the sale of a property or issue bankruptcy proceedings for non-payment of levies, although this is a very rare occurrence.
It is important that your owners corporation roll is kept up to date with the current contact details of all owners to ensure they receive all the important notifications regarding committee meetings, annual general meetings and, of course fee notices. An email address on the Owners Corporation roll will also help as Fee notices can also be sent by email to owners to ensure that they receive a copy.
If the committee find that there is an issue with late payment of fees in their complex, a letter could be included with the next Owners Corporation correspondence sent to all owners. Your letter should be a polite reminder, not only of the obligations to pay owners corporation fees, but also the benefits lot owners receive – perhaps point to the refurbishment of the lift, the fresh paint job or beautiful poolside deck to remind owners that they have a financial investment in their home’s common amenities.
If you’re buying a property in a strata committee, be sure to do your due diligence. If the previous lot owner was in arrears, then you as the new owner may be responsible for paying those back fees.