A strata levy is also known as a strata fee or contribution or a body corporate fee.  It is a regular financial contribution made by lot owners that go towards the insurance and maintenance of the strata property.

Strata levies are set by the owners’ corporation (sometimes called the body corporate or strata committee) and are payable by all lot owners (for example an apartment, unit, villa, or townhouse) in the building complex to cover projected costs and expenses of the strata scheme.

The owners’ corporation refers to the group of owners that collectively own the land on which their unit, apartment, or townhouse is situated.  All lot owners in a strata scheme are part of the owners’ corporation and have a right to participate in decision making.

The amount each lot owner pays in strata levies is based on their unit entitlement or share of the ownership in the strata scheme.  Generally, a larger property will have a larger unit entitlement and therefore pay a higher levy than a smaller unit.

The owners’ corporation uses these funds to pay for things like:

• Maintenance and upkeep of the building and any common areas
• Building insurance
• Strata managing agent fees
• Utilities for any common areas such as electricity for parking in the garage, elevators, and lighting in the common areas
• Periodic repairs

A special levy is an extra financial expense paid by lot owners.

An owners’ corporation can vote to introduce a special contribution or ‘levy’ to be paid by lot owners if there are insufficient funds to cover expenses such as large capital works or unforeseen building repair work.

Special levies may have to be paid as a lump sum amount or as an amount in addition to the quarterly general levy.

Yes.  You must continue to pay your levies even if you have a dispute.

There are limited circumstances in which a lot owner can object to, or dispute, a strata levy or special levy once a resolution has been passed and it has been agreed to by the owners’ corporation.

It is important that you continue to pay your levies in full and on time even if you have a dispute with the owners’ corporation or have concerns about the amount payable.  Your obligation to pay your levies is independent of any other matter, or issue, between you and the owners’ corporation.  This means that if you do not pay your levies in full and on time:

• You will become a “non-financial” member and lose the right to vote at meetings or act on the owners committee.
• The owners’ corporation can charge you penalty interest on levies not paid by the due date; and
• You will be at risk of legal action being taken against you by the owners’ corporation to recover unpaid levies, together with any penalties, interest payable and reasonable recovery costs incurred.

If you have received a levy notice that you dispute or is higher than you were expecting, we encourage you to speak to the government department in your state or territory responsible for strata matters for more information about what you can do.   See the bottom of this page for a list of the relevant government departments.

Yes, it is possible but only if you do nothing.  That is why it is important to act quickly and take steps to get back on track as soon as possible.

If you do not have an agreed repayment arrangement in place and amounts remain unpaid, the owners’ corporation can take legal action against you to recover the unpaid strata levies together with any interest payable and the reasonable expenses incurred (such as debt collection, legal and court costs).

Unfortunately, many owners’ corporations can be quick to take legal action against owners who have fallen behind in paying their strata levies. Legal action puts you at risk of being forced into bankruptcy and losing your home.

There are two ways an owners’ corporation can take legal action:

1. Start proceedings in the local or magistrate’s court; or
2. In your state or territory’s Civil and Administrative Tribunal (the exact name may vary depending on the state or territory).

An owners’ corporation is more likely to start legal proceedings in court.

Legal action in court typically begins by serving you with a Statement of Claim giving you 28 days to remedy the debt.  See our page on Being Sued for more information about what your options are to remedy the debt before the 28 days expires.

If you do nothing after receiving a Statement of Claim, the owners’ corporation is likely to get default judgment against you. If they get judgment, they can recover the money you owe them by doing any of the following:

• Obtaining an order from the court that compels you to provide information about your financial position by post or in person at the court (called an oral examination).
• Requesting that the court order a repayment arrangement.
• Obtaining a court order allowing the creditor to take and sell your personal property that is otherwise not protected in bankruptcy.
• Obtaining a court order allowing the creditor to take money from your wages or bank account (called a “garnishee”).
• Obtaining a court order allowing the creditor to sell or “charge” real property (for example, your home).
• Commencing legal proceedings to make you bankrupt if the debt (including costs and interest) is over the $10,000.  If you are made bankrupt, you may lose your home.

In bankruptcy your home (unit, villa, townhouse or apartment) will vest with your trustee.  This means that the trustee becomes the owner of the property and can deal with it for the benefit of the bankrupt estate.  The trustee will very likely sell the property if there is any equity, and once mortgage and rates are paid, the remainder of the equity will be used to pay the bankruptcy trustee’s fees, and then other creditors, including the owners’ corporation.  This could well leave you with little or nothing.

To avoid legal action, it’s important to make a repayment arrangement to pay the unpaid levies with your owners’ corporation as soon as possible.

If the owners’ corporation is threatening legal action or commences legal action call us on 1800 007 007 straight away for advice.

It is important to get back on track with your strata levies.

Here are some things you could consider doing to raise the extra money you need to catch up and pay your strata levies:

• Check whether you can get a utility relief grant to help pay your water and electricity bills and free up money for your strata levies.  See our page on Concessions and Grants for more information.
• Find out if you can get food, transport, phone or chemist vouchers from an emergency relief service near you; this will also help free up money. You can find your closest service on the Ask Izzy website.
• If your income has reduced or your living arrangements have changed, check if you are eligible to receive an income support payment or other payment from the Government.  The Centrelink Payment and Service Finder can also help you understand what Centrelink payments and other government assistance you could be eligible to receive.
• You may qualify for a Centrelink advance payment if you already receive a Centrelink payment.  You will need to pay this back over time out of future payments from Centrelink.
• If you are employed and have unused annual leave entitlements, you could ask your employer if you can cash these in, have them paid out, to put towards paying your overdue strata levies.
• Are you expecting a tax refund but haven’t completed your tax return yet?   If yes, then get your tax return in as soon as possible and use this money to help pay your strata levies.  You could get free help with completing your tax return from the ATO’s National Tax Clinic program.
• Consider selling items that you own but that you no longer use or need.  See our page on Selling Assets for more information.
• Review your budget and see if there are expenses you can reduce for example:  subscriptions, memberships, entertainment, phone / internet, etc.  In addition to this, consider if you can take on some extra work and earn more income.
• Check what cost of living support is available from your state or territory government.  There are a range of discounts, rebates, concessions and subsidies available to support individuals, households and small businesses so it is worth checking and applying for savings you may be eligible for. See our page on State & Territory Government Assistance for more information.
• Consider renting out a spare room, if you have one and it is safe to do so, to bring in some extra income.

Here are some other measures you could consider, but these have risks so it is important that you call 1800 007 007 and speak to one of financial counsellors about your situation, to get advice and talk through all your options first.

• You may qualify for the Home Equity Access Scheme (HEAS) if you are of age pension age and own your property outright.  This is a loan offered by the federal government that allows eligible borrowers to receive a tax-free fortnightly income stream, or lump sum advance, by taking out a loan against the equity in their home.  The HEAS is a type of reverse mortgage. There are risks in doing this and you should get independent financial and legal advice first. See the ASIC Moneysmart page on Reverse Mortgages and the HEAS for more information.
• Depending on your circumstances, you may qualify to access some of your super early.  The grounds for early access to super are very limited and there can be risks in doing this. See our page on Accessing Superannuation Early for more information.
• If you have a mortgage, you could speak to your lender / bank about what hardship support they can provide on your mortgage to help with your unpaid strata levies. See our page on Home Loans for more information about how to ask your lender for hardship assistance.

Across Australia a range of state and territory government departments and divisions are responsible for strata, or owners corporation, matters.

• Australian Capital Territory: Website: Access Canberra Phone: 13 22 81.  There is also more information here.
• New South Wales: Website: Strata – Living in NSW Phone: 13 32 20
• Northern Territory: Website: The Community Justice Centre Phone: 1800 000 473.  There is also more information here.
• Queensland: Website: Office of the Commissioner for Body Corporate and Community Management Phone: 1800 060 119
• South Australia: Website: Consumer and Business Services Phone: 13 18 82
• Tasmania: Website: Land Titles Office Phone: 03 6165 4444
• Victoria: Website:  Consumer Affairs Victoria Phone: 1300 558 181.  There is also more information here.
• Western Australia: Website: Landgate Phone: (08) 9273 7373 or 1300 365 288 (Please note that Landgate do not provide mediation services).