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 or strata committee.
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.
- You need to submit a request for a payment plan using the standard form for approval by vote at an owners corporation meeting or strata committee meeting.
- Action cannot be taken to recover overdue levies through the NSW Civil and Administrative Tribunal (the Tribunal) or a court where your payment plan has been approved for those levies and you are following the plan.
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. Consider how long your payment plan should go for, since you will need to pay the instalments on time. Payment plans can be for a maximum of 12 months.
Since a payment plan is only for overdue strata levies owed by an owner, the owner will still need to pay future strata levies when these levies fall due.
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.
Submit a request for a payment plan
Complete the standard payment plan request form and submit the request for review.
Your strata scheme cannot request additional information other than what is in the payment plan request form.
The payment plan request form also allows you to request that interest be waived on your overdue levies. Even if refused, it is worth asking since this will reduce the overall amount you will need to pay.
Wait for a decision to be made on the payment plan request
The owners corporation or your strata committee will make a decision on your payment plan request at a meeting of the owners corporation or strata committee. This cannot be delegated to the strata manager.
The decision will be recorded in the meeting minutes.
Approval by the owners corporation or strata committee will require a simple majority vote. Their decision-making will consider whether starting the payment plan would result in the owners corporation’s capital works fund or administrative fund having insufficient funds.
If you have requested for interest to waived on your overdue levies as part of your payment plan request, the owners corporation or strata committee may at the same meeting make a separate decision on your request for interest to be waived. Approval will also require a majority vote and cannot be delegated to the strata manager.
While your approval is pending
- You will receive a response within 28 days of submitting your request.
- You may need to negotiate adjustments to the plan in order for it to be approved.
- 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
- the amount of any interest payable for the overdue levies and the way in which it is calculated
- 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
- the date the payment plan was agreed to.
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.
Repayments made under a payment plan must be applied first to overdue levies (from old to new), then to any interest due, then to any costs for recovering the overdue contributions. This requirement applies unless a Court or Tribunal order, or you as an owner, specifies how payments must apply.
Action cannot be taken to recover overdue levies where a payment plan has been approved for those levies, and the plan is being followed.
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 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 refused
If your request is refused, the written response that is provided to you must include reasons for the refusal and how they apply to your request.
If 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 for an order that the refusal was unreasonable and the owners corporation must agree to the request.
Common questions about payment plans
How does a payment plan get accepted?
Once you have submitted a payment plan request, the owners corporation or strata committee will convene a meeting and make a decision on the request by voting.
Approval by the owners corporation or strata committee will require a simple majority vote. Their decision-making will consider whether starting the payment plan would result in the owners corporation’s capital works fund or administrative fund having insufficient funds.
This may be the case if:
- the fund would fall into deficit, or
- there would not be enough money in the capital works fund for the owners corporation to meet its duty to repair and maintain the common property, or
- there would not be enough money in the administrative fund to pay for expenses, or
- there would not be enough money to comply with:
- an enforceable undertaking entered into with Fair Trading,
- a compliance notice issued by Fair Trading, or
- another order issued under another Act.
My strata scheme wants proof of my financial situation. Are they allowed to ask for this?
No, a strata scheme cannot ask for additional information that is not part of the standard payment plan request form. This includes proof of your financial situation.
Can a strata scheme start legal or debt recovery action, even if I comply with a payment plan?
No, a strata scheme cannot start legal or debt recovery action against an owner where there is a payment plan in place for their overdue levies, and the requirements of that plan are being met.
Will other owners know my financial situation if I ask for a payment plan?
No. The standard form which must be used when requesting a payment plan does not require you to provide information on your financial situation. Your strata scheme cannot ask for additional information that is not part of the form.
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.
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.