3 Tips to reduce Levy Arrears in Owners Corporation Communities- VIC

3 Tips to reduce Levy Arrears in Owners Corporation Communities- VIC

3 Tips to reduce Levy Arrears in Owners Corporation Communities- VIC

Arrears is simply defined as, “money which is owed that was required by the due date.” The arrears process, or the collection of overdue contributions is a very important function in your Owners Corporation. It enables the Owners Corporation to meet its budget and maintain the cashflow required to meet the expenditure of the complex. Without the amount budgeted each year, basic maintenance and repairs may suffer resulting in property disrepair and Occupational Health and Safety concerns. 


I am in arrears, what is the process to get out of arrears? 

Having understood the significance of arrears and their impact on the success of your Body Corporate or Owner’s Corporation,  lets now briefly explore SSKB’s process for effectively collecting levy arrears.


The SSKB process can be broken down into the following 6 steps:

1.Reminder notice

If fees remain unpaid for 14 days after their due date, we may issue a Reminder Notice. This notice will explicitly state that there is an outstanding payment that requires immediate settlement.

2.Final Fee notice

If fees remain unpaid, we have the authority to issue a Final Fee notice 28 days after the Due Date.  This notice will request immediate payment or contact.  

3.Letter of Demand

A Letter of Demand can be issued after the expiry of the Final Fee Notice and can include follow up calls or emails if payments are still not made. This letter outlines that the Owners Corporation can sue if arrears is not paid.  

4.Letter of demand follow up

If, after 14 days from the original Letter of Demand, payments have still not been made, the Owner will again be contacted and instructions sort from the Committee.  This will determine whether legal action to recover the fees is necessary. Legal action is generally a last resort however is necessary in many cases. 

5.Legal Action

The Owners Corporation may apply to the Magistrates Court (or VCAT) and sue to seek payment of monies owed.  


The process has been designed to ensure that your strata scheme can run effectively by ensuring cash flow and budgets are met, and that Owners have more than sufficient time to pay their bills and are being treated fairly throughout the process. 

SSKB understands how important it is to have regular cashflow to meet these expenses. Our arrears team is on hand to discuss issues with Lot Owners and to liaise with Committees on effective recovery procedures. 


Below we present our three proven strategies that encourage prompt payment and reduce the number of levies in arrears:

  1. Interest on Late Payments:A Committee may reach a decision to charge interest on late Payments. According to the regulations, we charge penalty interest on unpaid contributions. This can commonly amount up to 10% per annum.
  2. Process and Policy: Please ensure that you follow the 6-step process listed above for late or unpaid contributions. It is important to be consistent and strict with the policy.
  3. Payment Plans: Reasons for non-payment of contributions are many and varied. The SSKB Levy Management team forwards any payment plan proposal received from a Lot Owner to the Committee to seek instructions. We kindly request owners to formalize their offer in writing, clearly stating the amounts and timing of the proposed payments. The Owners Corporation may also resolve to adopt a formal policy in relation to Payment Plans. 


If you would like to learn more about arrears, click here to watch our videos! 

At SSKB we want to educate our clients on the many different areas of strata living to ensure we make a positive difference to your community. Click here to contact SSKB for an obligation free consultation today. 

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