How to collect unpaid strata debts

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How to collect unpaid strata debts

Paying strata levies or fees is not optional if you own a lot in a strata complex – that’s a legal requirement

Many lot owners fall into arrears because of financial hardship, forgetfulness, or refusal to pay in the case of a dispute. If you’re experiencing difficulties with strata debts, read on to see how to collect unpaid strata levies.

Here are three areas that will help you learn how this problem can be addressed in your strata property:

  1. What happens when people don’t strata levies pay?
  2. How do you collect unpaid strata levies?
  3. What should you know about levy recovery?


1. What happens when people don’t strata levies pay?

When someone in your strata managed building doesn’t pay, it puts pressure on everyone related to strata living. For example:

  • It puts financial strain on the other owners who may have to make up for the shortfall
  • It could create a deficit in the budget outlined by your owners corporation to manage the property and maintain it up to standards – they may be unable to pay plumbers, electricians, and other professionals involved in managing strata property matters
  • If owners get away with not paying, it sends a message to others that they don’t need to pay either, leading to a snowball effect
  • The cost of collecting unpaid levies can mount up, leaving the owners’ corporation in an even worse situation financially
  • Owners who don’t pay or have arrears at the time of voting in general meetings are deemed ‘unfinancial’ and therefore excluded from voting in property matters
  • When people don’t pay, it causes friction and negative sentiments with their neighbours and other property owners. This can be overcome by getting your strata managers to chase the unpaid levies.


2. How do you collect unpaid levies?

Your committee has the responsibility of collecting levies in arrears. They can do the following:

  1. Send an overdue letter to the lot owner requesting payment
  2. If interest is payable, begin accruing interest
  3. Send a second overdue letter
  4. Refer the debt to a debt collector
  5. Ask your solicitor to send a letter of demand
  6. Take the debtor to small claims court
  7. Once a judgement is obtained, the legal system will take steps to enforce it
  8. If the debt remains unpaid, a lien may be registered over the property.[1]


3. What should you know about levy recovery?

  1. Define a process for debt recovery: Recovering unpaid levies can be a hard job, especially if there is no predefined process in place to anticipate shortfalls. Hence, the owners corporation should put their heads together to have a proactive approach and agree upon the procedure for collecting unpaid levies in an AGM.
  2. Define the by-laws and rules: Levy payment related matters should be clearly outlined in the by-laws and rules so that all owners are aware of the process, their responsibilities and the consequences of breaching by-laws. This makes it easier to successfully collect on unpaid levies when it happens, especially if the matter goes to court: being able to prove that you diligently followed the agreed process will help.
  3. Weigh the costs of recovery: Its important to weigh the costs resulting from unpaid levies against the cost of recovering them. If your levies are relatively low, it may not be worth chasing them until they exceed a certain amount. This is because the costs involved in chasing them usually outweighs the amount you’re owed.
  4. Allow flexible payment options: The larger the debt, the harder it is to recover. People can more easily find a few thousand dollars than tens of thousands. The strata legislation requires owners corporations to allow a flexible payment plan for owners who have fallen into arrears owing to genuine concerns.
  5. Know when to get active about unpaid levies: You should consider starting collections processes when levies are unpaid for 30 days or more. There are costs involved with each of these steps, so you need the help of a debt collections manager who is efficient, understands your needs and has a strong track record of collecting payments before it goes too far.


You should note that it’s theoretically possible to force the sale of a property to recover unpaid levies, although this is rarely done in practice. Depending on the size of your complex, unpaid strata levies could add up fast. It’s best to address any issues and chase payments promptly. By doing so, you’ll send a clear message to everyone in the owners’ corporation that unpaid levies won’t be ignored.


If you’d like to find out more on managing the financials for your strata property, click here to download your free Community Living guide. Or click here to ask a question at



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