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  • Sharon Spasenovic

Everything you need to know about levies

Updated: Nov 6, 2020



Why do I pay levies?

Levies are a contribution paid by all owners to cover the costs of maintaining common/association property.


How are the levy payments used by the owners corporation?

Levy payments are allocated into three different types of funds managed by the owners corporation: the administrative fund, the capital works fund, and special levies (if required).

  1. Administrative fund- these levies cover the day-to-day expenses incurred by the scheme, and include costs such as insurance premiums, cleaning, gardening, plumbing, electricity used on common property and fire inspections.

  2. Capital works fund- this is for major works such as repainting common property, and renewing or replacing fixtures and fittings that are part of the common property such as repairs to balconies or pathways.

  3. Special levies- these levies are raised by the owners corporation when there is insufficient funds to meet the cost of necessary or emergency repairs or replacement to areas of common property.

Why do I pay more levies than my neighbour?

Levies are apportioned to each owner by the allocated unit entitlements that were given at the time of the registration of the strata plan.


How are my levies calculated?

Your levies are calculated by dividing the budget approved at your AGM by your unit entitlement. This gives you your proportional contribution to the administrative and capital works funds.


Why do levies vary from building to building?

Levies are dependent on many factors, including the size of the complex, lifts, tennis courts and other facilities, and areas of open space. Generally the largest expense for an owners corporation will be insurance.


When is my levy notice sent?

An annual levy notice which contains all of the details of the four payment amounts due during that year is sent after the budget is determined. Most owners corporations will send out a reminder notice to the lot owner for these payments every 3 months. Should an address not be provided, then the levy notice is sent to the actual address of your lot. Please note that you have the option to receive levy notices via email or by post.


When must the levies be paid?

The due dates for the levy cycle are determined at the AGM. If money is not received to the trust account one month after it is due and payable, it bears interest at the rate of 10% simple interest a year (as prescribed by the regulations) from the due date until it is paid.


Who is the interest paid to?

The interest is paid to the trust account of the Owners Corporation, that is, it becomes a deposit to the trust monies of the Owners Corporation.


Can an Owners Corporation waive interest?

An owners corporation may, by special resolution to a general meeting, determine (either generally or for a particular case) that interest will not be charged.

Please Note: A strata manager does not have the authority to waive the interest as it is not money owing to the strata manager.


Who is responsible for payment of unpaid levies?

  • It is the responsibility of the proprietors/owners to contact the community/strata managing agent if a levy notice has not been received prior to the due date. The courts have determined that non-receipt of a levy notice is not a sufficient reason for non-payment. Due dates remain the same each year and these dates are listed on your AGM agenda, and the yearly contribution schedule sent to all proprietors/owners at the address currently on the strata/association roll.

  • If a lot is sold and there are unpaid levies, then both the owner at the time the contributions were levied and the new owner are jointly and severally liable for the payment of the contribution and the interest payable. This is a matter for your conveyancing lawyer to address.

  • Similarly, if your strata manager does not receive timely notification of a purchase, then the penalty interest and charges should be addressed with your conveyancing lawyer.


How does an Owners Corporation recover unpaid contributions and interest?

Legislation allows an owners corporation to recover as a debt any contribution not paid at the end of one month after the due date, together with any interest payable and the expenses of the owners corporation in recovering those amounts. If your strata agency agreement with your strata manager provides a delegation, then your strata manager will manage unpaid levies.


The debt recovery process

  • A reminder notice is sent if a contribution is unpaid for more than one month after the due date.

  • If the contribution and interest is still unpaid, final notice is sent advising the owner that they have 28 days to pay before the matter is sent for debt collection.

For further details please see the Office of Fair Trading website:

https://www.fairtrading.nsw.gov.au/housing-and-property/strata-and-community-living/strata-schemes/levies-and-capital-works-funds







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