January 7, 2021 at 10:54 am #396897PersistenceMember
I have a question about Sect83(3) of SSMA NSW. Pursuant to that section, Any contribution levied by an owners corporation becomes due and payable to the owners corporation on the date set out in the notice of the contribution. The date must be at least 30 days after the notice is given.
Our first levy for 2021 (including special levy) supposed to be due on the 1/2/2021, as minuted in the AGM. However, our strata manager issued the levy notice on the 6/1/2021, which is 26 days notice, which is obviously not in accordance with Sect83(3) of SSMA.
Can the owner not pay the levy citing that the notice is less than 30 days? What can the owner do in this instance as the notice is less than 30 days? I ask is because the owners have issued a motion request a meeting to be reconvened to put the special levy on hold since 3/1/2021. The chairperson and the secretary have not responded and the motion request will be due in 14 days which is on the 17/1/2021.
PersistenceJanuary 11, 2021 at 8:56 pm #397138Amanda FarmerExpert
The levy still needs to be paid, but interest cannot accrue until 2/2/21.
Amanda.January 12, 2021 at 1:57 pm #397197PersistenceMember
Just to confirm, the interest cannot be accrued until the 2/2/2021 or the 7/2/2021?
The levy notice is issued on the 6/1/2021, so 30 days is 6/2/2021, isn’t the interest should accrue on the 7/2/2021? Why is it accrued on the 2/2/2021?
PersistenceJanuary 13, 2021 at 4:31 pm #397272PersistenceMember
The levy notice is issued less than 30 days which is not compliance with SSMA Sect 83(3) of SSMA NSW.
Can the owners request the strata manager to re-issue the correct notice, with due date corrected to 30 days from date of notice is issued?
What if the strata manager refused to re-issue the correct notice?
Persistence.January 14, 2021 at 9:39 pm #397343Amanda FarmerExpert
In relation to your earlier question about the interest, I have taken a closer look at section 85 which deals with interest. Interest is actually only payable 60 days after a levy notice is issued (at the earliest):
85 INTEREST, DISCOUNTS ON CONTRIBUTIONS AND PAYMENT PLANS
(1) A contribution, if not paid when it becomes due and payable, bears until paid simple interest at an annual rate of 10% or, if the regulations provide for another rate, that other rate.
(2) Interest is not payable if the contribution is paid not later than one month after it becomes due and payable.
So, a levy can be paid one month after it becomes due and no interest is payable. If the levy becomes due at least 30 days after the date of the notice (in your case, 7 Feb 2021), then interest is only payable if the levy is still unpaid as at 7 March 2021.
Note the difference between the words “accrues” (or “bears” – used in s 85(1)) and “payable”. If the levy is not paid by 7 March, interest will have accrued from 7 Feb and will be payable from that date.
Now, as for seeking the reissue of your levy notice, this time with the correct due date, I am not sure what this would achieve. I keep in mind that, even if a levy notice is never issued (correct or not), the levy must still be paid. See s 83(4):
(4) Regular periodic contributions to the administrative fund and capital works fund of an owners corporation are taken to have been duly levied on an owner of a lot even though notice levying the contributions was not given to the owner.
So, even with errors on the levy notice, the levy is still due and payable per the meeting resolution. I accept that when an incorrect “due and payable” date is stated on a levy notice, things get confusing for the application of interest, but in my view any court considering the issue would simply apply at least 30 days from the date of the notice as the ‘due and payable’ date, and then say the levy must be paid within one month of that date to avoid any interest (s 85(2)).
Amanda.February 2, 2021 at 10:27 am #397989PersistenceMember
What can the owner do if the strata manager charged the interest from the due date of the levy, and not 60 days from the date of notice as per SSMA Section 85?
What is the normal process for a strata manager to notify if they want to charge the interest? If an owner receive such notice, what would you suggest on how to respond to the strata manager that they have charged the interest not in accordance with SSMA Section 85?
PersistenceFebruary 2, 2021 at 9:45 pm #398021Amanda FarmerExpert
The owner should continue paying their levies as they fall due, but should not pay any illegally charged interest. When making payment of levies, the owner should direct the strata manager to only allocate the payment to levies and not to illegally charged interest.
The owner should direct the strata manager to correct their ledger so the illegally charged interest is removed.
If the strata manager uses this charge to prevent the owner from voting at meetings, or takes steps to recover the unpaid interest (eg sends letters, charges additional fees for the letters, commences legal proceedings), the owner may need to go to the Tribunal for an order that the interest is illegal and directing the strata manager to remove it from the ledger.
The Tribunal should not be the first step, though. There needs to be a number of requests for this to be rectified (in writing) and a paper trail showing the strata manager’s refusal to accept the position.
The owner could also propose a motion for the next general meeting, seeking the support of the majority of owners to resolve this issue. The strata manager has to comply with any decision of the Owners Corporation.
In my experience, the strata manager does not give any notice of an interest charge: their software simply puts it on the lot owner’s account and it turns up on the next levy notice/statement of overdue levies.
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