straita

Levies & Funds

What can be done about an owner in levy arrears?

Short answer

Unpaid levies are a debt owed to the owners corporation, which can recover them. The usual path is a reminder, then interest on the overdue amount, then — if it stays unpaid — formal debt-recovery action. The debt-recovery rules were reformed recently (in force from late 2025) and the exact steps are still bedding in — an area where the industry is deliberately cautious. The cautious, correct path: treat the arrears as a recoverable debt, but follow the new hardship, payment-plan and notice-before-recovery steps rather than moving straight to court.

The usual steps

  1. Reminder — the owner is told the levy is overdue and asked to pay.
  2. Interest — a fixed rate applies to the overdue amount (how interest works).
  3. Recovery action — if the debt remains unpaid, the owners corporation can pursue it as a debt, including through the courts, and may recover reasonable recovery costs.

Because every other owner has to cover the shortfall, schemes are generally expected to chase arrears rather than let them build.

Hardship, payment plans and notice before recovery

NSW reformed strata debt recovery, with the current rules in force from late 2025. In broad terms they require the scheme to include hardship information with levy notices, to handle a request for a payment plan fairly and respond in writing, and to give an owner notice before starting recovery proceedings. A payment plan can run for a period set by the rules, and the scheme generally can’t pursue the debt while a compliant plan is being kept to.

These provisions changed recently and the detail matters, so confirm the current process and timeframes with NSW Fair Trading or a licensed strata manager before acting on a specific arrears case. (Flagged: the 2025 debt-recovery reforms — payment-plan duration, notice periods and hardship steps — are stated generally here rather than as fixed figures; verify against Fair Trading before relying on a number.)

Following the process without the guesswork

Arrears recovery is where a self-managed committee is most exposed — chase too hard and you breach the new hardship rules, too softly and the shortfall lands on everyone else. Straita takes the conservative path for you and keeps the work easy: it tracks who’s behind, applies interest correctly, surfaces the hardship and notice steps in the right order, and keeps a clean record of what was sent and when — so a committee follows the proper process without needing to memorise it.

Primary sources