Recovering Unpaid Fees from Overseas Lot Owners


Issuing an application to recover unpaid fees has always had its problems, however the issue has been compounded by a recent decision in the Victorian Civil and Administrative Tribunal (VCAT).

When an application is filed with VCAT to recover fees, the application is usually then sent to the respondent. It has long been recognised that applications cannot be sent to owners outside of Australia as VCAT does not have the power to do so.

It had been hoped that the recent amendments to the Owners Corporation Act 2006 would help remedy this situation.  Those amendments being that notices could now be served on owners living outside of Australia.

In a recent matter, SSKB on behalf of the Owners Corporation filed applications to VCAT against the owners of three lots to recover unpaid fees. The lots were occupied and the tenant paid rent directly to the lot owner. There was no managing agent.

None of the lot owners had advised the Owners Corporation of a mailing address within Australia, however an overseas address for each lot owner was known to the Owners Corporation. On the basis of the recent amendments to the Owners Corporation Act an application was made to VCAT to send notices to the overseas addresses.

However Senior Member Vassie of VCAT said that although the Owners Corporation Act 2006 allows for notices to be sent to overseas addresses, his interpretation of the amendments to the Act was that an Application is not a Notice.

While the Act contains a number of specific references to notices, relating to fees and meetings and the term “application” in the context of VCAT, he decided that the terms are different.

Senior Member Vassie commented that although the amendments to the Act were most likely intended to allow VCAT to send notices to an overseas address, this was not specified in the text of the legislation. The amendments were therefore considered insufficient.

So, while Owners Corporations can validly send notices to an overseas address, an address in Australia is still required for VCAT to send an Application to a lot owner who is not paying their Owners Corporation Fees.

 

Whilst we are very disappointed with this narrow reading of the amendments to the Owners Corporation Act, we do take some comfort that Senior Member Vassie did offer suggestions as to how legislators might consider further amendments to the Act to enable Owners Corporations to recover fees from recalcitrant overseas lot owners.



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Recent Comments

4 Comments

Judi Smith On October 30, 2012 | Reply

Whilst Senior Member Vassie commented on the most likely intent of the amendments, did he clarify whether there was a “difference” between a notice /application for the purpose of securing payment of unpaid OC fees?
Is there provision to apply directly to the courts for amounts greater than $10K?
Our OC may have to consider raising a special levy ($2K-$3K) to cover major maintenance not only for scheduled repairs & maintenance but also anticipated non payment by overseas Lot Owners who have been in arrears for more than 2 years.

    Chelsey On November 2, 2012 | Reply

    Hi Judi,

    Senior Member Vassie clearly stated that there was a difference between a Notice and an Application and that an Application was not a Notice. Therefore he did not allow the Application to proceed.

    There is no monetary amount set in the Act for the recovery of unpaid fees.

    There is nothing that prohibits an Owners Corporation for applying directly to the Magistrates Court but the Owners Corporation would want to be sure that the lot owner is easily traceable overseas and that there is a good chance of recovering any costs.

    If you’d like some further information on this please call Rick Deering on 03 9642 0555 or email him on rdeering@sskb.com.au

Peter Anderson On March 22, 2013 | Reply

Is there any precedent for time limitations in an OC fee recovery

    SSKB On April 9, 2013 | Reply

    Hi Peter

    There are no time limitations in an OC fee recovery. The debt remains until it is recovered. The debt never goes away.

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