• Creator
    Topic
  • #48625
    MailboxMailbox
    Flatchatter
    Chat-starter

    Hi.. We have a strata special levy for the external renovation of our block of 20 units. Our levy is $116,000 and was due  on December 31, 2019. We haven’t been able to make a payment yet and have just been hit with $4000 interest for the month of January on the overdue levies.

    This calculates to 41% pa interest. What is the maximum interest that can be charged for over due levies such as these?

    We have since paid $60,000 and will be making the full payment by end of March. I am thinking that I will only pay what was owed (i.e. $116,000) and disregard any interest charges. What can strata do in that situation?

Viewing 4 replies - 1 through 4 (of 4 total)
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  • #48656
    Jimmy-TJimmy-T
    Keymaster

    Ten per cent p.a. interest on $116,000 is $11,600.  Penalty interest of 10 per cent  is a statutory amount eatablished in strata law.

    #48639
    AvatarAndy
    Flatchatter

    Looks like the SM calculated the interest on 12 months instead of the actual number of days interest was acrued.

    #48630
    Jimmy-TJimmy-T
    Keymaster

    You need to look at Section 85 and Section 86 of the strata Act. They allow for penalty interest of  10 per cent per annum on unpaid levies, plus the reasonable costs of recovery.

    That means if you simply don’t pay the penalty interest, they can hire debt collectors to retrieve the unpaid amounts at your, probably considerable,  expense.  And the unpaid amounts will start accruing interest too.

    As for the $4000, that may be the 10 percent interest broken down into three quarterly payments, but you would have to ask your strata manager how they reached this figure.

    The owners corporation has considerable leeway in how they charge penalty interest, and how it is paid, so your best bet is is to talk to the committee and the strata manager as soon as possible.

    If you simply don’t pay, you will not only accrue more interest, you will also lose your voting rights as an owner.

    #48629
    Jimmy-TJimmy-T
    Keymaster

    You need to look at Section 85 and Section 86 of the strata Act. They allow for penalty interest of  10 per cent per annum on unpaid levies, plus the reasonable costs of recovery.

    That means if you simply don’t pay the penalty interest, they can hire debt collectors to retrieve the unpaid amounts at your, probably considerable,  expense.  And the unpaid amounts will start accruing interest too.

    As for the $4000, that may be the 10 percent interest broken down into three quarterly payments, but you would have to ask your strata manager how they reached this figure.

    The owners corproation has considerable leeway in how they charge penalty interest, and how it is paid, so your best bet is is to talk to the committee and the strata manager as soon as possible.

    If you simply don’t pay, you will not only accrue more interest, you will also lose your voting rights as an owner.

Viewing 4 replies - 1 through 4 (of 4 total)
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