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We are only a strata plan of four units, so probably don’t register as very important with the company that manages us. Last year they suddenly stopped sending us notices for our quarterly levies and, as a result, we went into arrears. The company has started charging us interest. Is it entitled to do this? And where does the interest go – to the company or into our sinking fund? Also, three of us were in arrears at the time of the AGM. Were we eligible to vote? In which case, are the minutes of the AGM null and void?
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There is no statutory requirement for the management company to send out quarterly notices, though it is obviously not in their interest or that of the strata plan for them to omit doing so. It is normal efficient business practice to get the levy notices out in advance of the period to which they apply. They are entitled to charge interest on overdue levies, except there is a period of grace of 30 days before interest @ 10% pa becomes payable, back to the due date. There is no requirement to advise when interest becomes payable. Interest is required to be paid to the strata sinking fund concerned. The legislation makes it quite clear that owners who are unfinancial are not entitled to vote or stand for committee. Depending on what the minutes said, they may not necessarily be null and void, but when it comes to acceptance of those minutes at the next general meeting it should be moved that this abnormality be recognised.
Quite frankly if the management company can’t do its job properly I’d be looking for a new one without further delay.
Just to clarify a few points.
Dave B’s right, there’s no statutory requirement for Strata Managers (SM) to send out quarterly notices of contributions, but there IS for Owners Corporations (O/C), and that function is customarily (if not always) delegated to the SM in their Agency Agreement with the O/C. Why would you engage a SM otherwise?
The NSW Strata Schemes Management Act states at Sect 78 that the manner of an Owners Corporation levying contributions to its Administrative and Sinking Funds will be by it “serving on each Owner a written notice of the contribution payable”, and further that these notices will be by way of “regular periodic contributions”.
The Agenda of each Annual General Meeting (AGM) must include a Motion to determine how much money the Owners Corporation needs to collect (via levies) in order to properly manage and maintain its Strata Scheme, and at that same Meeting must also determine the amount of each Owners contributions in accordance with Sect 78, and at what regular periods notices of those contributions (invoices) will be issued.
So have a look at the Minutes of the last AGM and see what’s been recorded there re. the above, and re. any un-financial Owners being shown as in attendance and entitled to vote; because as Dave B has advised, they can’t.
Now that those dreaded legal bits are out of the road, you must have a look at the Agency Agreement that your O/C has (in fact must have) with its inept Strata Manager (SM), and look for the section where the functions that your O/C has delegated to the SM include the issuing notices of contributions; I’ve never come across a instance where that’s not the case! Also look for the SM’s “debt collection procedures” as those customarily include reminder letters (that sometimes attract a fee), recognising that your O/C can decide whether or not the charge that statutory interest rate (10%) on overdue contributions beyond 30 days.
When you sorted all that, you really need to sort-out your inept Strata Manager, firstly by sourcing a new and better one, and then by your O/C moving to terminate that Agency Agreement – after first checking the conditions attached to that such as providing three (3) months written notice of termination in advance of the expiry date shown.
Owing to in lying & incompetent SM, (3 years), finally persuaded our strata to change Company.
New SM** First and second SINKING fund notices were received, however, neither 1st nor 2nd ADMIN notices received!
Aren’t we supposed to received ONE notice, i.e. Combined Sinking & Administration Levy notice?
I’ve sent sent email to SM regarding this but not received a reply.
Strata = 4 Owners.
Seems that we, as owners of one lot, are the only ones to ‘notice’!!
Your comment/advice would be appreciated
Frans.
If you think it possible to have a low level adult conversation with the other owners or at least with one other who could make up a quorum at the AGM you could suggest not having a SM and also make the payment of Admin./sinking funds a once yearly event; the notice accompanying the minutes to the AGM (or maybe part of the minutes to save paper). An undertaking could be given at the AGM that if one or more members of the EC send out notices, confirms receipt of payments, arranges payments of bills etc. that they will be voted a payment at the next AGM of say one third of what the current SM charges. If the office holders spend ten minutes reading “Strata Living” from the Dept. of Fair Trading they will likely be considerably more familiar with Strata Law than the SM’s that I have dealt with in recent years (whose only competence seems to be arranging sending out payment notices).
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