Levy Collection Explained

Here’s a breakdown of the collection process:

1. Levy Assessment and Billing

Each member of a sectional title scheme is assessed a monthly levy based on the budget approved by the body corporate. This budget covers all foreseeable expenses such as maintenance, security, insurance, and administrative costs. Once assessed, levies are billed to homeowners regularly, typically on a monthly basis.

2. Payment Terms and Methods

Homeowners are expected to pay their levies by the due date specified in the billing notice. Payment methods can include direct bank transfers, debit orders, or other arrangements facilitated by the managing agent or trustees.

3. Monitoring and Communication

The managing agent or trustees are responsible for monitoring payments and ensuring that all members are up to date with their levies. Regular communication is important, especially if a homeowner starts falling behind on payments. Early intervention can prevent small issues from becoming significant debts.

4. Debt Handling Procedures

If a homeowner fails to pay their levies by the due date, the following steps are typically taken:

Initial Reminder: A friendly reminder is sent shortly after the due date.
Formal Demand: If the levy remains unpaid, a formal demand letter is issued, outlining the overdue amount and any potential legal consequences of non-payment.
Legal Action: If the homeowner continues to ignore payment requests, the body corporate may initiate legal proceedings to recover the owed amounts. This process may involve debt collection agencies or legal counsel.

5. Dispute Resolution

Sometimes, disputes arise regarding the amount or validity of levies. Homeowners have the right to challenge their levies through internal dispute resolution mechanisms or, if necessary, through the Community Schemes Ombud Service (CSOS). It’s important that all disputes are handled fairly and transparently to maintain trust within the community.

6. Special Levies

Occasionally, unexpected expenses may arise that are not covered by the regular budget. In such cases, a special levy may be imposed after a majority vote by the body corporate. Like regular levies, these are legally enforceable and subject to the same collection processes.