22 Apr My neighbour won’t pay their levies. What now?
Have to overpay your levies because a neighbour is in debt? It’s even worse when you’ve tried to follow them up with little or no success. That’s where we come in. We’ll take the necessary steps to ensure everyone’s paying their fair share. Here’s how debt recovery works at Turnbull Cook.
STEP 1: Fee notice
First, we’ll issue the lot owner a fee notice.
We typically issue fee notices 28 days before they’re due. The due dates for fee notices fall at the start of every quarter: 1 January, 1 April, 1 July and 1 October.
STEP 2: Fee reminder notice
Reached the due date and the levy still hasn’t been paid? In this case, we’ll issue the lot owner with a reminder notice.
No interests or charges will be incurred to the lot owner at this point.
STEP 3: Final fee notice
It’s 28 days passed the due date. And the fees still haven’t been paid.
This is when the owners corporation can issue a final fee notice to the lot owner. The owner will be charged a debt recovery fee, as well as any interest accrued from the levy due date.
The interest rate is determined at each AGM. It must not exceed the maximum interest rate payable under the Penalty Interest Rates Act 1983 – and accumulates daily until the debt is fully paid.
The owners corporation may waive penalty interest if mitigating circumstances have led to delays in payment.
STEP 4: Legal action notice
If the lot owner fails to comply with the terms of the final fee notice within 28 days, we follow up with a call and issue the lot owner with a legal letter.
This letter gives the lot owner another chance to comply with the final fee notice before proceedings begin. The lot owner then has another 14 days to pay the fees before legal action begins.
STEP 5: Legal proceedings
Legal proceedings typically follow the process below.
For payments not paid within 14 days, we’ll send the debt to a solicitor. There, the solicitor will start performing the relevant actions to recover the debt. We’ll take all steps to ensure the owners corporation does not incur the costs of debt recovery action.
If the indebted lot owner fails to comply with all previous attempts for payments, the owners corporation will take the matter to VCAT.
VCAT will order the lot owner to pay the debt. The owners corporation’s legal and administrative costs will be considered separately by the tribunal. Both parties must attend the hearing.
Magistrates’ court order
The lot owner hasn’t complied with VCAT’s order to pay their outstanding debts? At this stage, the owners corporation can apply to the Magistrates’ Court for an enforcement order. Before any enforcement action, the owners corporation must register the certified copy of VCAT’s orders with the Registry of the Magistrates’ Court. Registration lets the owners corporation pursue the debt repayment enforcement as if the VCAT order were a judgment of the Magistrates’ Court.
Before the enforcement, the owners corporation or the indebted lot owner may seek to enter a payment plan to pay off the debt. Whether or not to enter a payment plan should be decided and endorsed by the owners corporation committee – and recorded in the minutes.