Committee Operating Procedures

Bad Debtors are an Easy Target for Additional Income, But Regulators Are onto This

Tackle levy arrears effectively with our SOP for strata managers. Learn strategies for addressing common challenges like missed fee notices, owner ignorance, and financial hardship while maintaining compliance and delivering better outcomes.

By
Michael Teys
on
January 17, 2025
Category:
Governance

One of the issues taken up by the media this year in their war on strata management, was ‘over the top’ charges for collecting arrears of levies. Some of the cases reported were truly disgraceful. 

Strata managers should be paid for collecting arrears. But the charges must be for effective collection work, not just automated and poorly worded reminders and letters of demand. 

We participated in roundtable discussions with the NSW government on this topic throughout the year. One thing that became clear is that early intervention results in better outcomes. Leaving collection work until the bills are insurmountable is a recipe for disaster for both the owner and the owners corporation.

This preview is an extract from our Standard Operating Procedure (Victoria) for collecting fee arrears. It features two of the eight sections of the SOP – a description of the task, and common roadblocks and solutions. The roadblocks are the same in every state and territory.

Collecting Levies

1. What is the task?

This operating procedure is for collecting fees from owners in arrears. Sometimes fees are called levies or contributions – all these terms mean the same thing. This operating procedure details how and why we do this and the outcomes for us and our owners corporations.

8. What are the common roadblocks to collecting levies?

  • Owners not receiving their levy statements.
    Solution: Ensure the strata register is up to date. It must reflect any change-of-details notices we receive. Ensure that all mailing addresses are spelled correctly.
    Also, send a reminder text message to owners after the fee notice has been sent, before the due date.
  • Owners are ignorant of their obligation to pay fees.
    Solution: This is explained in our fact sheet sent to new owners when they join the owners corporation.
    At each AGM, explain the obligation to pay fees promptly. Also, explain the consequences of non-payment. Never assume owners understand their obligations.
    In the reminders and letters of demand sent before legal action, explain owners' obligations again. This may require a systems adjustment.
  • Owners in financial trouble give no priority to paying fees.
    Solution: Refer them to the national debt hotline. They can speak to a financial counsellor: https://ndh.org.au/debt-problems/strata-levies/#. They can call the National Debt Helpline, 8:00 am to 8:00 pm weekdays.

Some of these roadblocks, and the solutions, might seem obvious. But, in the busy day-to-day running of a strata management business, it can be easy to put off the work solutions…. until tomorrow. Then you are under pressure, working late to get them out at the last minute, and you are more likely to make a mistake. 

Our Operating Procedures, and solutions to roadblocks aim to help you. They should give you more time today, so you don’t have to put things off until tomorrow.

If you would like to learn more about our Complete Standard Operating Procedures System, book a free 30-minute call with me to discuss your needs. 

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Michael Teys

Michael Teys is the Founder and Chairman of The Strata Professionals Australia. He brings together more than 30 years of specialist strata law practice, a decade of strata business ownership, and an active programme of academic research into multi-owned property governance.