Levy recovery – What’s The Process?

17 Mar 2015

By BCS Strata Management debt recovery specialist Terry Kemp, General Manager at Kemps Petersons Receivables.


Members of strata, community and body corporate schemes will tell you the need to raise and receive funds is fundamental to pay for the maintenance of buildings and the administration of the scheme.

When lot owners fail to pay levies, the schemes can be left with a shortfall of funds to pay for essential expenses. The law allows an owners corporation to recover outstanding levies as a debt if they are not paid after a reasonable time.

If you’ve exhausted all avenues to secure payment from an owner with no success, a qualified and experienced debt collector could help you reach a solution.


What is the process for recovering a debt?

In the majority of instances, owners will settle their debts promptly following the issue of a reminder notice. However, for some owners additional proceedings may be necessary.

A debt collector will usually follow the below timeline:

  • Initial investigation – determining why the levies have not been paid

  • Reminder notice ­– via letter, email and phone

  • Final notice – if no payment has been made or agreement reached

  • Letter of Demand – outlining possible legal action

  • Local court proceedings

Typically, this process will last for a few weeks or months, depending on the level of debt, previous attempts from the corporation and the debtor’s circumstances.


What’s the benefit of involving a debt collector?

Regular cash flow is the staple diet for all businesses and needs to be maintained.

Debt collectors are experts in communication and gathering information for legal matters. Often emotions are running high when a neighbour sues a neighbour which could hinder any ongoing relationship.

Collectors work closely with clients to form tailored strategies to resolve debt collection challenges quickly and cost effectively. Debt will be collected faster, competently, professionally and allow the corporation to continue to operate efficiently.


Is there a rise in debt recovery?

The cost of doing business is increasing and debt enquiries are rising.

An owner has a responsibility to ensure they can cover ongoing levies, however there are options including payment plans to suit individual owners – this is something for the owners’ corporation to agree on.

Remember everyone is invested in the future of the scheme and communication is vital to avoiding legal proceedings.


# At 3:39pm, July 5, 2015, Jesslyn said:
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I don't even know what to say, this made things so much eaires!

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