Top 4 Tips to Reducing Levy Arrears in Owners Corporation Communities (NSW)

Living in an Owners Corporation is all about sharing – sharing common property facilities as well as sharing physical infrastructure.

Something else which is shared are the associated costs in keeping the building compliant with its legal and statutory requirements, as well as ensuring the property and facilities are kept in good order.

After all, it’s more than investment – it’s also a home.

That’s why everyone has to pay their fair share.

That takes the form of levies which provides regular cashflow to meet these expenses.

Failure to collect all the levies due, or to budget incorrectly for expenses means basic maintenance and repairs suffer. That presents a health and safety risk, as well as devaluing the property.

SSKB understands how important it is to have regular cashflow to meet these expenses. Our arrears team is on hand to discuss issues with Lot Owners and to liaise with Committees on effective recovery procedures.

Here are our four proven strategies that encourage prompt payment and reduce the amount of levies in arrears:


Owners Corporation may decide to offer an early payment discount. Many of our buildings have found that a 20% discount is an effective incentive.

Interest on Late Payments:

A community may resolve at a general meeting to charge interest on late payments. Penalty interest (simple interest) on unpaid contributions is charged in accordance with the Regulations, which may an amount up to 30% per annum or 2.5% per month.

Process And Policy:

SSKB recommends all Owners Corporations adopt the following processes for late or unpaid contributions. Once the process is adopted, SSKB will follow it on behalf of the Owners Corporation:

Having those levies paid means there's money for maintenance and repairs, SSKB gives top strategies for managing levy arrears

Having those levies paid means there’s money for maintenance and repairs, SSKB gives top strategies for managing levy arrears

  • First Notice – Reminder Notice: Fourteen days after the due date for contributions.
  • Second Notice – Overdue Notice: Seven days following the first reminder notice
  • Penalty Interest: If non-payment continues and penalty interest is applicable, this will be applied to the Lot Owner’s account on the 1st day of the following month after the due date and will appear on the lot ledger and future notices issued. Interest is only applicable on levy amounts and not on “other” amounts such as arrears levies, or interest.
  • Third Notice Letter of Demand: Fourteen days following the issue of the Overdue Notice
  • Non-Payment Of Letter Of Demand: Following the issue of a Letter of Demand, if there is still no payment or contact by the owner, time is spent in trying to contact or locate the owner and recover the outstanding amount and costs. This action forms part of the fee charged for the Letter of Demand.
  • Legal Action: The first two notices and letter of demand will be issued by SSKB on behalf of the Owners Corporation in accordance with the policy adopted to recover outstanding contributions. If the action taken has not resulted in payment of the account and contact with the owner has been unsuccessful, then further instructions to proceed with legal action to lodge a Claim and Statement of Claim will be sought from the Owners Corporation.

Payment Plans:

Reasons for non-payment of contributions are many and varied. When a Lot Owner contacts SSKB Levy Management team with a payment plan proposal, this is forwarded to the Committee to seek instructions. Owners are requested to formalise their offer in writing to set out amounts and timing of payments proposed. The Owners Corporation may also resolve to adopt a formal policy in relation to Discount Applications and Payment Plans.

SSKB is Australia’s leading strata management company specialising delivering expert advice and management to Owners Corporation and Body Corporate communities.

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