Fees In Arrears - SSKB - Strata Managers | Community Experts

Fees In Arrears


Having those levies paid means there's money for maintenance and repairs, SSKB gives top strategies for managing levy arrears

Lot owner’s contributions are made by all individual owners in a community scheme to cover body corporate/owners corporation expenses.  The annual levies determining how much each lot owner will pay is decided every year at the Annual General Meeting.

The body corporate/owners corporation must, by ordinary resolution, determine administrative and sinking fund budgets for the financial year, work out how much each owner will pay based on these budgets, and determine the number and dates of how the levies will be paid in instalments.  Additional levies must also be agreed to by an ordinary resolution.  These generally occur in the form of special contributions, collected by the body corporate if there are unexpected costs which were not budgeted for.

The body corporate/owners corporation must then issue each owner a written notice of the owed contributions 30 days before they are due.  However in some situations where owners do not pay their body corporate fees, the body corporate/owners corporation is entitled to begin a debt recovery action to claim the amount due.

The SSKB process for the recovery of outstanding levy fees has four steps.  These steps also include accumulating fees associated with the issuing of the notices.  Failure to comply with the final of these steps can result in the owner being order to pay penalty arrears.

Step 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.

Step 2 – Overdue Notice (contributions unpaid over $500)

An overdue notice can be issued 10-14 days after the Reminder Notice if fees remain unpaid.

Step 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.

Step 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.  Legal action is generally a last resort.

Penalties

The body corporate may fix a penalty to be paid by owners of lots if a contribution is not received by the due date for payment as per the notice of contribution.  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.

If you are unsure about payment of levies or late payments of owner’s contributions in your community, speak to your committee or your SSKB Community Manager.  We can provide you with expert advice on your scheme, to ensure the best outcome for you and your body corporate/owners corporation.



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Recent Comments

4 Comments

Jeanette On May 29, 2018 | Reply

I have body corporate of $220 per quarter and every time I am late they charge a late payment fee of $110 dollars I asked them does the late payment fee go into our body corporate account and they say no it goes to them for administrative fees
I think this is excessive.

    SSKB On June 20, 2018 | Reply

    Hi Jeanette,
    Every Body Corporate is independent of another. The Body Corporate, via the Community Manager, charging a late fee would only be the result of a formal resolution by the Committee or by the Owners. The late payment fee you refer to may be a combination of Penalty Interest of up to 2.5% per month and levy arrears activities. Levy arrears activities may consist of reminder notices, title search, engagement of a legal practitioner. Without specific details and knowledge of which scheme this query relates to, make this difficult to answer with any exact certainty. If you wish to contact our office directly and provide details of the scheme, this can be more specifically answered.

ROBERT I DERBYSHIRE On January 18, 2019 | Reply

I last receieved a levy notice in October 2018 which had arrears fees of $27.50 theoughout, plus penaltu interest . I paid this amount then in jan 2019 (today) i recieved another levy notice, nothing inbetween the 2 notices to remind me of any amounts owing, today’s notice already has several late fees arrears fines of $27.50 plus more interest. It appears bright and duggan are making excessive amounts off customers like myself by not sending reminders?

    Emma Smith On January 21, 2019 | Reply

    Good afternoon Robert,

    We write following receipt of your comments and write so as to explain this for you, however, we suggest that your Body Corporate Manager at Bright & Duggan should also be able to answer your query as quickly as we have.

    Firstly, we write assuming the Body Corporate in which you are an owner is located in Queensland and is governed under the Body Corporate and Community Management Act QLD.

    It appears that your Body Corporate has at a General Meeting prior to December 2018 established a system where the Body Corporate can charge Penalty Intertest of between 0.5% – 2.5% per month on any Lot Owner who has part of a levy in arrears for 30 days (2.5% per month equates to 30% pa). Providing this decision was done at a General Meeting, this is valid and lawful with the Interest charged being an income for the Body Corporate, the income does not go the Body Corporate Manager. Further to ensure this resolution is enacted and interest charged, it is normal practice for the Committee for your Body Corporate to establish a policy for the Body Corporate Manager (who in this case appears to be Bright & Duggan) to issue reminder notices and invoices to any such Lot Owner with a Levy in arrears. This process of following up is a cost from the Body Corporate Manager to the Body Corporate, which in turn is passed onto the individual Lot Owner who has a levy in arrears. This too is valid and general practice in the Body Corporate industry providing it has been a formal decision of the Committee.

    So in summary, each month (30 days) that you as a Lot Owner have outstanding levies, you will be charged Penalty Interest and then depending on the Committee policy, you may also be charged a fee(s) for the Body Corporate Manager to follow you up via a reminder notice(s) which could eventually involve the engagement of a legal entity to commence formal debt recovery action if the amount remains outstanding.

    Our initial advice would be to query your Body Corporate Manager for proof of these resolutions and to explain this process as we have and to then pay the outstanding amount to ensure you do not incur further Penalty Interest charges, and then discuss this matter with the Committee if you disagree with this practice.

    We hope this has provided some explanation for you in this instance and if you require any further explanation or discussion, please do not hesitate to contact our office.

    Regards

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