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Levy contributions are a critical part of strata living – maintaining the upkeep of the common property as well as the health of the body corporate.
When levies are not paid on time, it may lead to cash flow issues and delays in essential maintenance or services. Here’s a look at the main reasons behind late or unpaid levies and practical strategies to manage these.
Change of email address, phone numbers, or contact details
One of the most common causes of missed levy payments is outdated contact information.
Owners who change their email address, phone number, or mailing address without updating the body corporate records may miss important communication, levy notices or payment reminders, subsequently leading to arrears.
It’s critical for owners to notify the body corporate manager immediately when there are changes to their contact details.
BCsystems provides a convenient online form for the update of contact details. It is also critical in this day and age to regularly check your Spam box in your emails for important emails from your body corporate.
Lack of awareness or understanding of the importance of levies
Some owners may not fully understand what body corporate levies are, how they are calculated, what they cover, or the deadlines for payment.
Communication and awareness are key to ensuring all owners are informed about their financial responsibilities.
BCsystems provides an extensive library of videos, e-books and content about levies and how they are used, calculated and allocated.
Financial hardship
Unexpected challenges, such as job loss, illness, or personal crises, can affect an owner’s financial stability. During these times, paying body corporate levies may become a lower priority, resulting in arrears.
Many bodies corporate committees offer support by providing payment plans or working with owners to find flexible solutions. Open communication is key, and owners should feel comfortable reaching out to their body corporate via the body corporate manager to discuss their situation. Please be aware that only the body corporate committee can approve any special circumstances regarding the timing of the payment of levies and that no committee can waive the requirement to pay a levy.
The body corporate is legally obligated to recover all levies from lot owners, as these funds are essential for covering the operational costs of the property. If a significant number of owners fail to pay a levy installment on time then all owners may have to have an increase in next year’s levy to compensate.
Disputes or disagreements
Disagreements between owners or disputes with the body corporate can sometimes lead to an owner withholding levy payments in protest. As levy contributions are a legal requirement under body corporate legislation, this approach is not advisable and will probably result in levy arrears recovery action against the owner.
Regardless of any ongoing disputes, owners are still obligated to pay levies on time.
Addressing concerns through open and constructive dialogue is the most effective way to resolve disputes. Conflict resolution strategies such as mediation can help find common ground and prevent unpaid levies from escalating.
Changes in ownership
Changes in ownership can sometimes lead to confusion regarding levy payments. When a property is sold, the responsibility for paying outstanding or upcoming levies typically transfers to the new owner. If this isn’t clearly communicated during the settlement process, it can result in missed or delayed payments.
To prevent this, ensure you use an experienced solicitor or conveyancer to manage your purchase.
Note: Your body corporate manager does not see your settlement calculations as this is private between you and your legal practitioner.
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