$3M for repair work – How to pay?

Under section 149, an adjudicator can make orders varying contributions if they are considered to be unfair.

My reading of this – and you should check with a strata lawyer – would be that the amount payable for each lot be calculated based on unit entitlements and the owners then offered the opportunity to pay up in front or repay loans which would, of course, accrue interest. The people who paid up front would then be excused the loan repayment component from the levies.

If this is done openly and fairly, I can’t see why anyone would object and, if they did, why an adjudicator would support them.

Or you could reverse engineer that and if an individual or a group of owners wanted to pay up front, you could seek orders at NCAT to allow you to do so.

The only problem that might arise would be if the work cost less than estimated and it would require a unanimous vote to repay the funds. That, of course, is highly unlikely.

You could also contact our sponsors Lannock strata finance to see how they have handled this situation

149   Order for variation of contributions levied or manner of payment of contributions

(1)  An Adjudicator may make either or both of the following orders if the Adjudicator considers that any amount levied or proposed to be levied by way of contributions is inadequate or excessive or that the manner of payment of contributions is unreasonable:

(a)  an order for payment of contributions of a different amount,

(b)  an order for payment of contributions in a different manner.

(2)  If an Adjudicator considers that the consent of an owner referred to in section 77 has been unreasonably refused, the Adjudicator may make an order for payment of a different amount of one or more contributions levied or proposed to be levied by the owners corporation.

(3)  If a contribution which is the subject of an order under this section has been wholly or partly paid:

(a)  an order to pay more has effect as if the owners corporation had decided to levy a contribution equal to the difference, and

(b)  an order to pay less imposes a duty on the owners corporation to refund the difference.

(4)  An application for an order under this section may be made only by the lessor of a leasehold strata scheme, an owners corporation, an owner or by a mortgagee in possession (whether in person or not).

Hi Kera & Jimmy

Our Strata considered this a few years ago and were informed by the Strata manager that all contributions (i.e. repayments) had to be distributed equally by unit entitlements, and thus it was not possible to have some owners pay upfront and other repay the loan (as those repaying the loan would have higher fees than those who paid upfront).  I also think that the Financier backed this position up but am not 100% sure.  We are now considering Strata finance again in a different block so would like to have this point answered definitively – if possible without reverting to NCAT to make a determination for unequal levies.