How to arrange a payment plan for unpaid strata levies
If you are experiencing financial hardship, you can request to have a payment plan approved by the owners corporation.
Key information
- If you have unpaid strata levies, you can arrange a payment plan in conversation with your strata manager or strata committee, to pay off the debts in instalments.
- A request for a payment plan is generally arranged through the manager or strata committee and submitted for approval by vote at an owners corporation meeting.
Steps to arrange a payment plan
Work out what you can afford
For help in working out what sort of payment plan you can afford in your situation, have a look at your budget. Payment plans, if approved, are usually for 6 or 12 months.
For help with making a budget, visit the Australian government’s Moneysmart website.
You can contact the National Debt Helpline for specific advice around your situation and considering a strata payment plan.
- Call 1800 007 007.
- Visit the National Debt Helpline for strata debt tips and their live chat service.
Contact your strata manager or strata committee to discuss your request for a payment plan
Use the contact details listed on your levy notice.
Your strata scheme contact can work with you to develop a proposed payment plan that you can afford, over an agreed period. You can also share information with them that guides strata committees in supporting owners in financial hardship.
Consider how long your payment plan should go for, since you will need to pay the instalments on time.
Always request for interest to be waived as a part of your requested payment plan. Even if refused, it is worth asking since this will reduce the overall amount you will need to pay.
You can use the following example as a template.
“I would like to learn more about setting up a (6/12 month) payment plan to allow me to pay the strata levies I owe in instalments, as well as other options that consider my current financial circumstances.
Please also consider my request to waive interest charges on the strata levies I owe as part of a proposed payment plan.”
Keep records in writing of key discussions with your strata scheme representative throughout the process. This can be done by asking for an email or letter confirming what was discussed.
Develop a payment plan with your strata scheme representative
Your strata manager or strata committee will generally develop a proposed payment plan on your behalf. This will ultimately be decided on by the owners corporation.
To start this process, you may be asked to provide information to confirm:
- your financial hardship
- how you will be able to pay in instalments for the period of your proposed payment plan.
Your personal information should be handled with care and only disclosed as agreed with you for the purpose of assessing your request for a payment plan.
If you are uncomfortable with providing particular information, ask if there are alternative forms of information that you can provide. For example, it may be acceptable to provide a letter from a financial counsellor or to complete a simple ‘statement of financial position’ with information on your current financial situation and how you will be able to repay your debt.
The payment plan developed should contain:
- the full details of the lot owner (you)
- the details about the amount outstanding, including any interest payable
- schedule of payments for the amounts owing
- how the payments are to be made.
Make sure that any proposed payment plan that is developed will suit your financial circumstances.
Request owners corporation approval of your proposed payment plan
Once you have a proposed payment plan drafted, it will need to go before the owners corporation for consideration and a vote.
You can arrange for this to happen by writing to the strata manager or secretary (who is part of the strata committee). Ask that a motion to approve your payment plan is put on the agenda of a meeting of the owners corporation.
Wait for the owners corporation to decide at their next meeting
Your strata committee representative will put the proposal forward for a vote at the next owners corporation meeting. The decision will be made at the meeting and recorded in the meeting minutes.
Approval by the owners corporation will require a simple majority vote. Their decision-making may consider factors such as:
- whether the proposed payment plan is reasonable
- how the payment plan financially impacts the strata scheme
- any adjustments to the plan that may need to be negotiated (as a condition for them approving the plan).
While your approval is pending
- Ask your strata scheme contact about the timeline for the decision.
- Keep paying your ongoing strata levies.
- If you can, it is best to also keep paying your overdue levies at a rate you can afford (for example, making a payment each fortnight), even while your request or approval for a payment plan is pending. Make sure you receive a payment statement for any payment you make.
If your payment plan is approved
If your payment plan is approved, you must receive a payment plan statement. This must include:
- the lot owner’s name, address and lot number
- the strata levies owing
- payment schedule and information about payment methods
- what amount (if any) has been paid to date
- strata manager or strata committee contact details
- statement about the lot owner’s right to request to extend the payment plan – although the owners corporation doesn’t have to agree to this
- details on potential recovery actions available outside of the payment plan.
Begin your payments as per the agreed arrangement in the plan. Make sure you receive payment statements for each payment you make.
You must also continue to pay your ongoing strata levies as they come through the regular levy notices.
Pay on time
Your strata committee will be checking that you are repaying the overdue levies according to the agreed schedule. Keep track of when payments are due (for example, set reminders) to ensure you pay oy on time.
Make sure you regularly check your payment statements to ensure you are on track – as per your payment plan agreement.
If your payment plan is denied
If your request is denied and you believe the decision by the owners corporation was unreasonable, you can apply online for NSW Fair Trading’s free mediation service.
If a decision is still not reached after mediation, you may apply to the Tribunal so help resolve the dispute.
Common questions about payment plans
How does a payment plan get accepted?
Once you have worked out a proposed plan with your strata scheme representative, they will put the payment plan proposal forward for a vote at the next owners corporation meeting, which you can attend as an owner.
Approval by the owners corporation will require a simple majority vote. Their decision-making may consider factors such as:
- whether the payment plan is reasonable
- how the payment plan financially impacts the strata scheme
- any adjustments that may need to be negotiated as a condition for them approving the plan.
My strata scheme wants proof of my financial situation. Are they allowed to ask for this?
Yes, a strata scheme can ask for proof of your financial situation if you are requesting financial hardship assistance, such as a payment plan or to waive interest charges. This is to ensure that the hardship request is genuine and to assess how they can best support you.
If you are uncomfortable sharing detailed information, you can ask what specific documentation is required. Often, a simple statement of financial position or a letter from a financial counsellor may be sufficient.
You can also suggest or ask about alternative ways that you can demonstrate your financial hardship if you are asked to do this.
Can a strata scheme start legal or debt recovery action, even if I comply with a payment plan?
Yes. Currently, a strata scheme can start legal or debt recovery action against an owner, even when they are on an agreed payment plan.
If legal or debt recovery action starts when you have an agreed payment plan in place, and you are meeting the requirements of that plan, contact NSW Fair Trading to apply for our free mediation service.
You can also get free and independent advice from a financial counsellor by calling the National Debt Helpline on 1800 007 007 or visit ndh.org.au to use their live chat service.
Will other owners know my financial situation if I ask for a payment plan?
Yes. Once the plan is submitted to the owners corporation as a motion to discuss, the plan will be part of the meeting agenda. It will then require a vote at a general meeting of the owners corporation to approve or deny it.
Whether or not you enter into a payment plan, if you have overdue levies:
- your arrears will be visible to other owners when financial reports are provided at the AGM
- you will be considered a non-financial member of the corporation and lose the right to vote at meetings or serve on the strata committee until your levies are paid.
If your strata committee does not help with your situation
If your owners corporation rejects a payment plan or refuses to help, find out about applying for free mediation with NSW Fair Trading.
After mediation, you can apply to the Tribunalto help resolve the dispute.
Contact Fair Trading
If you have any further questions about strata, you can contact Fair Trading via phone or in-person at a Service NSW centre.