- This topic has 7 replies, 8 voices, and was last updated 2 years, 5 months ago by .
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I am hoping you may be able to help me. I live in a block of four units, three are owner occupied and one is rented out. The owner of the rental apartment has not paid his levies for at least 10 years, and as a result there is never enough money in the capital works fund to address issues with the building, eg: leaking roof, painting, leaking planter boxes. When these issues arise (often and ongoing) we have to raise a ‘special levy’, which is on top of our quarterly level.
To make things even more annoying, the rented apartment has water problems from their bathroom, which has leaked downstairs to the foyer area, causing water to run out from the lights when it rains.
Our Strata Managers and tell us there is nothing they can do as to go to court will only cost more money, which we don’t have and that we will only get the money owed when/if he sells his apartment. By the way, he conveniently lives in the Cayman Islands!
Is there anything we can do? We are so desperate.
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The owners corporation is duty bound to keep the common property in good and serviceable repair and cannot defer this obligation because one owner is unfinancial.
If a special levy is required so that financial owners “pick up the slack”, then that should be done, even if the financial owners feel hard done by.
Separately, the owners corporation is obliged to recover unpaid levies, including the contribution to the special levy. Allowing an owner to remain unfinancial for 10 years is poor performance and may mean that some of the older levies are unrecoverable.
Irrespective, the owners corporation should promptly issue a Statement of Claim to recover the unpaid levies and costs and then obtain default judgment. Once it does so, it can garnish the rent to pay the debt.
David Sachs | Principal
Sachs Gerace Lawyers | Level 4 • 80 William Street • Sydney East NSW 2011
T: +61 2 9331 5177 M: 0448 300 094 P: GPO Box 876 Sydney 2001
E: sachs@sglawyers.com.au W: http://www.sglawyers.com.auUnfortunately doing nothing, i.e. not seeking to recover the unpaid levies does not seem to be working. It also raises time limitation issues, as a debt is usually only recoverable for maximum of 6 years. Meaning, that the owners corporation may only be able recover the last 6 years of unpaid levies.
Therefore, I suggest that the owners corporation obtains legal advice on the recovery of the unpaid levies, which may include a garnishee order on the rental income received. This is where the court orders any rent which is due to be paid by the tenant to be paid to the owners corporation to satisfy the debt.
Matthew Jenkins
General Manager / Partner, Bannermans Lawyers
Suite 702, 2 Elizabeth Plaza, North Sydney NSW 2060
PO Box 514 North Sydney NSW 2059
P 9929 0226 F 8920 2427
W http://www.bannermans.com.au
Level 2, Suite 1, 65 Berry Street, North Sydney NSW 2060
PO Box 514 North Sydney NSW 2059
P 9929 0226 F 8920 2427
W www.bannermans.com.au- This reply was modified 2 years, 6 months ago by .
I had an inkling about being able to get a court order allowing you to garnishee the rent from the property, so I’m glad to see our legal eagles have confirmed this possibility.
As for costs, I believe the reasonable costs of recovering strata debts can be added to the debts themselves (check with the lawyer you will need to pursue this).
And in the meantime you can get a strata loan to allow you to hire the lawyers to get your money back.
I’m curious to know why your strata managers didn’t suggest this to you. In the meantime, if you can only recover the last six years’ levies, as suggested above, then you have effectively given the slack owner a 40 per cent discount. Ouch!
The opinions offered in these Forum posts and replies are not intended to be taken as legal advice. Readers with serious issues should consult experienced strata lawyers.
- This reply was modified 2 years, 6 months ago by .
In respect of the four years levies prior to the six years – perhaps the OC could seek redress from the strata manager who has advised them incorrectly.
In relation to the leak from the bathroom that is coming out of the common property lights – the OC has the right to enter a lot to undertake repairs. Whether or not the leak is common property or part of the lot, I believe the OC would be advised to do that, and if appropriate add that to the money owing by the lot. You can’t just let water leak out of light fittings.
Overseas owner who has not paid levies for 10 yrs – if the OC continues to do nothing and eventually the lot is sold by a mortgagee exercising power of sale, can the OC require the outstanding levies to be paid to OC out of the sale monies in the absence of a court judgment?
On the sale of any type of property, part of the conveyancing process is the adjustment of the sale price. The purchasers conveyancer enquires as to what debts are outstanding and what bills have been paid ( ie rates). On settlement the sellers conveyancer makes out checks ( or transfers funds) directly to any debtors. In the case of strata, the buyers conveysncer will ask the strata whether there is anything owing, or prepaid in the levies.
I doubt that the seller would dispute debts even over the statutory period, as this will just hold up the sale, and could trigger penalty payments to the buyer.
Hi
You need to ask your Strata Manager for advice as to whether you can get a judgement on someone who doesn’t reside in NSW. Also ask if he will front NCAT for the OC at his hourly rate. If he won’t or does not know the answer to your question get yourselves a new Strata Manager. To garnishee the owner you will need to know their bank and the account number. if you garnishee the total amount there might be a wad of money sitting there and you could get a good surprise. Nothing ventured nothing gained.
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