Debt recovery remains a challenge for businesses, including strata properties when it comes to collecting levies. So expertise in debt collection makes all the difference for owners corporations of strata properties when it comes to ensuring strata levies are collected in full and on time. With more people choosing to live in strata buildings, the onus is on owners corporations to work closely with debt collection agencies to reduce the risk of levies being in arrears.

Over the past few years, there has been a 30 per cent reduction in unpaid levies from strata property owners being referred to debt collection agencies.

Our data indicates now, just 1.5 per cent of lot owners are referred to debt collection over a 12-month period. This is down from the previous average figure of five per cent of lot owners referred to debt collection from levies being late. Very few cases end up in court. Just 15 per cent of property owners who have been engaged in debt collection face legal action.

One reason why more property owners are paying their levies on time is because more strata properties are working with niche debt recovery partners to help improve their cash flow. This is giving owners’ corporations not just access to sound debt collection, but also a raft of other services, for instance specialist lawyers and negotiators.

Technology makes all the difference

Although most property owners pay their levies on time, there will always be a small proportion that are late or don’t pay at all. Technology and automation can make it as easy as possible for property owners to pay.

Tools such as self-service portals, mobile apps with reminders and flexible payment options all make it easier for property owners to pay their levies. A tech-savvy debt collection partner goes the extra mile to provide owners corporations with customised and timely reports with key insights that will make improve decision making and enhance the strata living experience.

Tips for debt-free strata living

Debt collection specialists can be actively involved with owners’ corporations by attending committee meetings to get a first-hand account of levy related issues.

  • Where property owners are unable to make levy payments on a quarterly basis, debt collection specialists can bridge the gap by discussing different options with the strata committee. This may include negotiating for the owner to make smaller, more frequent payments. However, more frequent payment processing may increase admin costs for the building, which should be discussed with the owners’ corporation.
  • Disputes do not negate a lot owner from their obligations to pay their levies by the due date. Not paying them may further impede the dispute resolution process.
  • Property owners who are in arrears should be encouraged to acknowledge reminder notices or demands from debt collectors and respond to any letters from the owners’ corporation as soon as possible to discuss how to move forward.
  • Property owners who are having financial difficulties should be encouraged to contact the strata manager or the owners’ corporation’s executive committee as soon as possible, so they’re not counted as defaulters. Even if certain exceptions are made on a case to case basis, they should also understand all future levies will still need to be paid by the due date.


Case in point

The following case study demonstrates how important it is to engage early with late paying lot owners and take a collaborative approach to dealing with owners’ corporations.

In this example, the customer was a large owners’ corporation on the NSW North Coast, which was having great difficulty collecting substantial unpaid levies from a number of lot owner investors living in Australia and also overseas. Some owners had left their apartments vacant, while others were tenanted.

The executive committee had spent a substantial amount of money engaging lawyers to resolve the situation without any return. The situation was so bad it was beginning to affect the building’s capacity to meet its financial obligations. The property required funds quickly.

We adopted a problem-solving approach to helping the customer achieve timely levy collections. Our team located and contacted the investor lot owners, explained the ramifications of an insolvent owners corporation and mediated matters amiably.

This consultative approach ensured the owners paid the overdue levies immediately, assisting to restore the building’s cash flow.

Strata living on the rise

Recent research shows more than nine per cent of Australians live in a strata or community-titled dwelling, with the sector predicted to grow by more than 10 per cent over the next 15 to 25 years.

Additionally, 40 per cent of all new dwellings are apartments or units. This trend is expected to increase as Millennials prefer the convenience of apartment living over houses.

With strata living on the rise, timely levy collection is more important than ever – this is especially the case with older buildings that will require more maintenance and upkeep and even special levies over time, as well as for the growing number of new apartments being built.

The challenge for debt collectors working with owners’ corporations is to maintain the relationship with the defaulted lot owner. This is especially important because the lot owner in default could also be on the owners’ corporation executive committee and, therefore, also a be client now or become one in the future.

So, the need for strata managers, owners’ corporations and debt collection specialists to continue to work collaboratively will only increase over time.


Terry Kemp

General manager and director

Kemps Petersons


T (02) 8216 0487

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