Developing and assessing a payment plan for unpaid strata levies
Owners in financial hardship can be given the option to enter a payment plan, if approved by the owners corporation.
Key information
- A payment plan sets out the conditions for repayment in instalments for overdue strata levies.
- The strata committee needs to assess the impacts of a payment plan on the overall scheme.
- The owners corporation votes to accept or refuse a payment plan proposal.
Owners with overdue strata levies have the option to explore entering into an affordable payment plan with their owners corporation. The payment plan will set out the conditions for them to pay the levies they owe over an agreed period (up to 12 months).
The following information outlines the process involved in developing, assessing and providing a payment plan – as well as the option to extend a payment plan. You should also read our Scenario of an owner with unpaid levies. This will guide you through the type of situation in which this alternative repayment option can help.
Another option to support an owner is waiving interest charges (which may be in addition to the payment plan).
See more information on alternative options at Supporting owners in financial hardship.
How to develop and assess a payment plan
Establish financial hardship
To assess an owners request for an alternative payment arrangement, such as a payment plan, you can:
- ask the owners to confirm their financial situation in writing, and their need to be supported with alternative arrangements
- request that the owner provides a letter from a financial counsellor, which confirms their financial circumstances and need for support.
You should treat any information an owner provides with sensitivity and not disclose any unnecessary information in managing their request for support.
Develop a payment plan proposal for review
It is helpful if the strata manager or strata committee supports the strata property owner to work through the details of their payment plan proposal.
To approve the proposal, it will need to be reviewed and approved by a majority vote at an owners corporation meeting.
The process to review an owner’s payment plan request (and ultimately decide whether to approve them having a payment plan) lets your strata scheme take into consideration whether the payment plan is reasonable and its impact on scheme finances. The process may also result in extra negotiation that can adjust the proposed payment plan, so it can be approved.
Convene an owners corporation meeting
The owners corporation needs to agree to payment plans by resolution (majority vote) at a general meeting of the owners corporation.
Provide a payment plan statement
If the owner is approved to enter into the proposed payment plan by the owners corporation, the strata scheme must give the owner a payment plan statement.
The payment plan statement should 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.
If a payment plan is denied
If an owner’s request is denied and they believe the decision by the owners corporation was unreasonable, they may apply for NSW Fair Trading’s free mediation service.
If a decision is still not reached after mediation, they may apply to the Tribunal to 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.