Apartment Owners – Have You Inadvertently Become a ‘Private Lender’ to Other Owners in Your Building?
Did you know that when you purchase an apartment in Victoria affected by an Owners Corporation, you automatically become a member of that Owners Corporation?
The Owners Corporation has powers to raise funds from its members and issue a Fee Notice requesting payment within 28 days. Whilst you may duly pay your Fee Notice on time, other owners may fail to fulfil this responsibility. The question then is, how does my Owners Corporation make non-paying owners pay, and what are the penalties to that owner?
In order to recover unpaid fees from owners, there is a statutory procedure to which all Owners Corporations must comply, as they would any other unpaid judgment debt. First, the Owners Corporation (usually through its appointed manager) issues a Final Fee Notice, which demands payment of the unpaid amounts immediately.
If the owner does not make immediate payment, then after 28 days from the date of the Final Fee Notice, the Owners Corporation may instruct a solicitor to file proceedings in the Victorian Civil and Administrative Tribunal (VCAT) seeking Tribunal orders that the owner must pay the amount of unpaid fees, plus penalty interest and costs. Once the VCAT Order is issued, and the owner still does not pay, payment can be enforced through the available enforcement methods applicable to other unpaid Court judgment debts.
It is more cost effective for an Owners Corporation to use a specialist law firm that has strong experience with recovering Owners Corporation levies, as the procedure for recovery is unique and lack of knowledge can lead to unnecessary delays in obtaining the orders needed.
Tisher Liner FC Law has a specialist Owners Corporation Legal Division who frequently recovers unpaid fees for Owners Corporations. Our point of difference? We focus on a long-term strategy to educate owners who have not paid, about their legal obligations to pay, the purpose of the collection of the funds, and sometimes even ‘what an Owners Corporation is.’
A complaint we frequently hear from owners in debt to the Owners Corporation is: “I moved addresses and ‘someone else’ should have called me to see where I had relocated”. Our response to this is that it is the legal obligation of the owner under section 134 and 135 of the Owners Corporations Act 2006 to notify your Owners Corporation of the address to which you want your Fee Notices sent. That obligation is on the owner, not the Owners Corporation. Owners Corporations are represented by voluntary owners between annual general meetings. It is unfair to impose additional obligations on them or the Owners Corporation Manager who assists the Owners Corporation to comply with its duties; to first, identify that you have changed address (which may be impossible for them to know) and second, to make attempts to contact you to ensure you comply with your duties to update your address (and your duty to pay your fees).
This is one of many complaints to which we provide owners with comprehensive legal responses. We aim to educate, with the view of ensuring awareness of the fee responsibilities of the owner in the future. Any further questions, feel free to contact a member of the Owners Corporation Team.
