Levies
Information for strata committees and managers on setting levies, giving notice to owners and managing unpaid levies.
Setting levies
Property owners pay an annual levy (sometimes referred to as a ’contribution’ or ‘fees’). This is to help maintain and repair common property, and to meet running costs.
The budget sets out the total levy charges to owners. The budget should also set out when levies should be paid – for example, quarterly.
Levies must be charged according to each property’s ‘unit entitlement’.
Unit entitlement represents a property owner's share of the strata scheme and can be different depending on the property.
For example, a small apartment might have a unit entitlement of 10, while a larger apartment might have a unit entitlement of 15.
An owner with higher unit entitlements has a stronger voting power, but also pays higher levies.
Owners can find unit entitlement information by looking at the property on the strata plan.
How levies are decided
Levies are approved by the owners corporation at the annual general meeting (AGM). The steps below will take you through the process of deciding levies.
Before the meeting
The secretary must send an agenda to the owners. This must happen at least 14 days before any AGM and at least 7 days for any other general meetings of the owners corporation. The agenda must include a motion to accept the financial statements, including estimated levies for the next year.
You should provide your proposed budget with the agenda. This helps owners understand what to expect.
At the meeting
The budget should be shown with the scheme’s financial statements to give a clear idea of why the proposed levy amounts are needed.
After reviewing the financial statements and the proposed budget, owners vote on a ‘motion’ to approve them.
Over 50% of owners must vote in favour to approve the proposed levy amount.
The owners corporation can decide how often lot owners pay their levies.
For example, many strata residents may prefer paying smaller amounts more frequently.
After the meeting
Levies must be kept by the strata committee in separate funds. See Managing strata finances and insurance for information on fund types.
The owners corporation must give lot owners written notice of the levies to be paid including at least 30 days’ notice to pay.
An owners corporation works out that it needs $200,000 over 10 years. This means it would need to levy (raise) $20,000 each year.
This scheme has a total unit entitlement of 200.
To calculate the levies, the $20,000 for the year should be divided by the total unit entitlement number (200). This will show that $100 is needed for each point of unit entitlement.
Therefore, every lot owner must be charged $100 for each point of unit entitlement they have. There are 20 lots in the scheme.
- Five lots have a unit entitlement of 15. They must each pay $1,500 in levies that year.
- Ten lots have a unit entitlement of 10. They must each pay $1,000 in levies that year.
- Five lots have a unit entitlement of 5. They must each pay $500 in levies that year.
Altogether, this will make up the $20,000 needed for that year.
Special levies
The owners corporation can vote to introduce a ‘special levy’. They corporation may do this when there is not enough money to cover expenses, such as major repairs.
Special levies must be introduced at a general meeting of the owners corporation. The meeting must follow the same steps outlined as for introducing annual levies.
Like annual levies, special levies are worked out based on the unit entitlement of each owner.
Emergency repairs
The owners corporation may need to introduce a special levy to cover emergency repairs to the property.
Emergency repairs are repairs to the common property that are necessary to mitigate a serious and imminent threat to the health or safety of the residents. The strata committee must provide written notice of the special levies to be paid for emergency repairs with at least 14 days’ notice.
Limiting financial pressure on owners
Owners corporations should aim to limit excessive financial pressure on owners when there is a need for special levies. Consider:
- Instalments - breaking up the special levies into more affordable instalments, in line with the funds actually needed at specific points in time
- Urgency - if special levies aren't needed urgently, give owners as much notice as possible (on top of the required written special levy notice).
- Saving money elsewhere - if the strata committee is preparing its budget for the AGM, review your expenses. For example, check better deals on services and remove unnecessary costs. If you have already got an approved budget, budget revisions will need to be endorsed by the owners corporation at a general meeting.
- A ‘strata finance’ loan to cover a shortfall in funding for necessary expenditure. This can help you break up special levies into smaller instalments for owners to pay over a longer period of time.
It is best to inform owners that if they can’t pay the special levies on time, they should contact their strata manager (or the relevant contact on the strata committee) as soon as they can, so they can discuss potential options with them.
Levy notices
The levy notice is the bill the strata manager or treasurer sends to each strata owner with the amount of strata levies or ‘fees’ they need to pay.
What to include on levy notices
Levy notices should include:
- the amount of strata levies due and which fund they contribute to
- date when strata levies are due
- how to pay
- contact details of the treasurer or strata managing agent
- the period the levy payment covers.
We also recommend including the following:
- detail of any interest payable on overdue levies
- information about contacting your strata manager or committee to discuss options as soon as possible if you are struggling to pay your strata levies due to financial hardship. Learn more about Supporting strata owners in financial hardship.
- Options may include an affordable repayment plan, waiving interest charges, more time to pay, or other options to help with your financial hardship.
- If you need help with managing your expenses, you can seek free, confidential and independent financial counselling support through the National Debt Helpline. Call 1800 007 007 to speak with a financial counsellor or visit https://ndh.org.au/debt-problems/strata-levies for more information and to use their live chat service.
- Information on owners' rights under NSW strata laws is available on the NSW Government website.
As well as the formal levy notice, it is best to give:
- owners as much notice as possible about their strata levies and any upcoming changes
- a reminder to pay when strata levies have fallen due, as well as reminders after the due date.
If an owner is late in paying a levy, the committee or manager should speak with the owner early.
Paying levies in smaller instalments
Some owners may wish to pay their levies in smaller, more frequent instalments
Even though levies invoices are typically issued quarterly, the annual levy amount can also be divided into weekly or fortnightly payments, with the last payment made by the date the levies are due.
The strata manager or strata committee may wish to communicate this option and confirm payment options, or assist with setting up a direct debt function for recurring payments.
Minimum notice periods for levies
An owner must receive at least 30 days’ to pay for standard levies, as well as any special levies.
For levies related to urgent repairs to a building, a special levy notice must be sent at least 14 days before payment is due.
Debt recovery action - the last resort
Debt recovery action is the last resort. For good practice relating to managing unpaid strata levies, see Supporting owners in financial hardship.
The owners corporation must give at least 21 days’ written notice (for example, in a 'letter of demand') before taking any debt recovery action in the NSW Civil and Administrative Tribunal (the Tribunal) or a court.
The debt recovery notice must include:
- the amount of the strata levies
- interest and expenses to be recovered
- how the owners corporation proposes to recover the money
- the date the amount was due to be paid
- the way the amount may be paid
- whether a payment plan may be entered into.
An owner may also be ordered to pay reasonable costs based on what the owners corporation has spent to recover the unpaid levies. However, reasonable costs can only be recovered by order of the NSW Civil and Administrative Tribunal or court.
Legal and debt recovery action should always be a last resort to save time, costs and angst for all parties. To follow good practice rather than only the minimum legal requirements listed above, jump to Managing unpaid levies on this page.
If an owner has received the legal form known as a ‘Statement of Claim’, they have 28 days before further legal action can be taken. Refer to the information sheet on the Local Court New South Wales website.
Managing unpaid strata levies
The strata scheme should have a clear approach for managing unpaid strata levies that is well communicated to all owners in the scheme. This approach must also comply with current strata laws.
Subscribe to the Property matters newsletter to stay informed when strata laws change.
Your strata committee can support your scheme's process to manage strata levies with proactive education to owners about:
- their obligation to pay strata levies and what can happen if these aren’t paid
- what options and support owners can explore if they are finding it difficult to pay their levies.
They can also inform owners that in considering alternative payment arrangements, the committee will:
- assess whether the terms are reasonable
- consider the impact on the strata scheme’s finances.
Options for owners in financial difficulty
In addition to the operational information on this page, the strata committee should become familiar with our Supporting owners with unpaid strata levies information when dealing with unpaid levies.
Refer owners to our information on options and support for owners at Help if you can’t pay your levies.
Send a reminder when payment is overdue
Jump to the what to include in a reminder for overdue levies.
More time to pay
The strata committee can suggest to the owners corporation to give an owner more time to pay the levies that they owe. This must be introduced to an owners corporation meeting to be decided by vote.
Payment plans
An owner can be given the option to enter into a payment plan. This is ideally developed in partnership with the strata committee and must be voted on at an owners corporation meeting.
See our steps for Developing and assessing a payment plan for unpaid levies.
Waiving interest on unpaid levies
If an owner does not pay their strata levies within one month of the payment due date, they are charged interest at the rate of 10% simple interest per year.
The owners corporation cannot increase or decrease the interest. However, it can vote to charge no interest. This requires a simple majority vote by the strata committee or at a general meeting of the owners corporation.
The owners corporation can either:
- vote each time whether to waive interest in response to an owner’s request, or
- vote to waive interest generally.
Using a debt collector
Debt collection action is the last resort to recovering overdue levies.
Compare the services, value-for-money and experience of different debt collection agencies. This is to ensure the best fit for your strata scheme.
Ask questions about their process. For example, you might be wary about:
- indications that they will apply a ‘one-size-fits-all’ approach to different situations
- a lack of personalised engagement.
You may also wish to get references from their other clients.
Letter of demand
Before issuing a letter of demand, your strata scheme may want to provide notice to the lot owner first that:
- the owners corporation will send their arrears for debt recovery to a solicitor or debt collection agent
- unless the owner takes urgent action, they will receive a letter of demand from the appointed solicitor or debt collector to recover the money owing.
To issue a letter of demand from a lawyer or debt collector, you will need to engage their services.
Make sure you allow time for:
- comparing quotes of different service providers (if required)
- engaging the services of your chosen lawyer (with experience in strata-title law) or debt collection agency.
A lawyer can help with:
- a court or Tribunal application to recover the unpaid strata levies (plus reasonable recovery costs)
- complying with thewritten notice requirement to advise the strata property owner about action being taken in the Tribunal or court.
Reasonable recovery costs can only be recovered by order of the NSW Civil and Administrative Tribunal or court.
Using a reminder for late payments
Sending a reminder after an owner’s levy payments fall due forms part of an approach to manage overdue strata levies and inform owners.
This should be on top of your strata committee or strata manager reaching out to the owner, such as by having a conversation to understand their situation, clarify potential misunderstandings and provide additional support, if required.
What to include in the reminder
- Alert the owner that their strata levies are overdue.
- Warn about the potential consequences if they don’t pay their levies.
- Include clear contact details – for the owner to contact the strata manager or relevant contact on the strata committee.
- Provide a prompt for the owner to contact the strata manager or strata committee to discuss anything they need to clarify and/or discuss their options as soon as possible if they can’t pay their levies.
- Add the following information: "If you need help with managing your expenses, you can seek free, confidential and independent financial counselling through the National Debt Helpline. Call 1800 007 007 to speak with a financial counsellor or visit https://ndh.org.au/debt-problems/strata-levies/ for more information and to use their live chat service."
- Refer the strata owners to the Help if you can't pay your levies page to find out more about their options when dealing with unpaid strata levies.
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.