One of the most important part of an Owner’s Corporation is setting and collecting Levies. These funds are used throughout the year to pay for goods and services that offer a benefit to the property as a whole, ensuring that everyone’s investment and comfort are protected.
What are Levies?
Levies are the fees paid to the Owner’s Corporation. They can take several forms, with the most common being the annual levy set to meet the projected yearly budget. They are used for the upkeep of the group’s common property and expenses, and all members of the Owner’s Corporation are required to pay them. Maintenance, insurance and utilities of common areas all come out of the Levy payments.
How are Levies set?
Though Mayfield can advise you on how to set your Levies, the Owner’s Corporation is responsible for setting them at the Annual General Meeting. The first step is usually to draw up a budget with all expected expenses, then allowing a little extra surplus to meet unexpected events.
The Owner’s Corporation also determines how frequently the Levies are paid, which can be quarterly, half yearly or in some cases, annually.
What if an emergency happens?
If there are extraordinary expenses that exceed any surplus in the budget, the Owner’s Corporation can strike special Levies to account for this expense. It may be urgent repairs, the purchase of extra facilities for common areas or any other urgent communal expense not accounted for in the annual budget. Special Levies are never popular though, so it is very important to have a solid budget at the start of the year. Extra funds can always go into surplus.
What if someone doesn’t pay their Levies?
Owner’s Corporations can charge interest on overdue Levies, provided the rate does not exceed that set out in the Penalty Interest Rates Act 1983 (Section 29 OCA). In addition to charging interest, Owners Corporation may apply to VCAT to seek an order that fees must be paid. If this option is chosen by the Owner’s Corporation, it must be enforced equally across all members.
Can Mayfield help with the Levy collection?
Of course we can! Mayfield can help you every step of the way, from setting a budget to determining the Levy amount and sending out fee notices. Handling this area is one of the biggest benefits of having an Owner’s Corporation Manager. We can collect the fees efficiently and transparently, ensuring that the Owner’s Corporation has the necessary funds available to operate smoothly. In addition, Mayfield can arrange for a suitably experienced solicitor to represent the Owner’s Corporation in the VCAT process if necessary, so no matter what happens, Mayfield will be there to help you through it all.