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4 Tips To Reduce Levy Arreas in Owners Corporation Communities – NSW

4 Tips To Reduce Levy Arrears in Strata Communities -NSW

4 Tips To Reduce Levy Arreas in Owners Corporation Communities – NSW

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 workplace health and safety. 


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 – (contributions unpaid over $300)

If fees over $300 remain unpaid 14 days after their due date, a Reminder Notice may be issued. This notice will outline that there is an overdue payment that requires immediate payment.

2.Overdue notice – (contributions unpaid over $500)

If fees remain unpaid, we will issue an overdue notice within 10-14 days after the Reminder Notice. This notice will request immediate payment or contact.  

3.Letter of demand

A Letter of Demand for any payments not made can be issued 14 days after the Overdue Notice date and can include follow up calls or emails if payments are still not made. This letter outlines that the Owners Corporation can sue if arrear is not paid.  

4.Letter of demand follow up

 If, after 14 days from the original Letter of Demand, payments still have not been made, a follow up will be taken up with the owners and the committee.  This will determine whether legal action, to recover the fees is necessary however, legal action is generally a last resort. 

5.Committee resolution

Committee will pass a resolution at a general meeting as to how to progress with penalties and paying off payments. This penalty must consist of simple interest at a stated rate (of not more than 2.5%) for each month the contribution or instalment is in arrears. 

6.Legal Action

 The Owners Corporation can go to the Magistrates Court and sue to seek remedies. 


The process has been designed to ensure that A) your strata scheme can run effectively by ensuring cash flow and budgets are met, and B) 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 four proven strategies that encourage prompt payment and reduce the amount of levies in arrears:

  1. Discounts:Owners Corporation may decide to offer an early payment discount. Many of SSKB buildings have found a 20% discount is highly effective.
  2. Interest on Late Payments: A Committee may reach a decision to charge interest on late Payments. We charge penalty interest on unpaid contributions in accordance with the regulations. This can commonly amount up to 30% per annum or 2.5% per month.
  3. 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.
  4. 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 Discount Applications and 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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