What will happen when you don’t pay the strata fee on time?

As a property investor can you ignore the strata levy though nobody likes them? The short answer is NO!

Why you should NOT ignore it

Firstly, a compulsory 10 per cent penalty interest rate is applied to all overdue levies.

Secondly, as well as interest, the costs of recovering the debt are entirely payable by the debtor – the owner who does not pay the strata fee on time.

How much it will cost you – How  a $3000 levy became $8000

Your strata manager and any debt collection agency will each have their own charges and if lawyers get involved the costs escalate again so the cost to you could be really high!

The story from Flat Chat

A story from Flat Chat illustrates how dangerous it is to put your levies too far down your list of priorities when you start running into financial trouble.

Adeze got behind with his levies during a period of unemployment. When he received a demand for a full and final payment of $3,000, he scraped together $1,400 which he sent as a part payment. However, he was immediately hit with an additional charge of $850 for debt recovery fees, and that’s when a whole tangle of miscommunications and missed payments got out of hand.

To cut a very, very long story short, by the time Adeze has paid off all the accumulated penalty interest and legal fees the $3,000 bill will have attracted more than $5,000 in additional fees so in total it costed him $8,000! This is how  a $3000 levy became $8000!

Lessons for Investors

The first lesson learned here is that as an property investor you should never put your strata levies on the back burner or consider them less important than other bills.

Secondly, if you do get into trouble, talk to your strata manager and executive committee about a way out of the problem.

Leave a Reply