The peril of opposing a strata scheme
By Bailey Compton 10 Nov 2023
You need strong grounds – or risk high punishment.
As a lot owner, if you are going to challenge your strata scheme, you need to be on extraordinarily strong ground. If you lose, the punishment is far too high!
Look at levies, for one: payment of levies is not challengeable! The levy has been set by an annual general meeting or an extraordinary general meeting, and lot owners must pay. Having the strata scheme undertake repairs or maintenance on your unit is not grounds for not paying your levies. Levies are payable, they must be paid!
What is worse than not paying your levies is if it goes to court. Costs then must be paid, there is no chance of a lot owner defending a statement of claim against the lot owner not paying levies. Only defence is that:
- The levies have been raised without authority;
- The calculation of the strata manager is incorrect.
If you end up in court, neither of these aspects will be present. If you lose, the cost of enforcement of the strata scheme will be added to the levies payable to the owners corporation. This includes the cost of the strata managers, any debt collectors, and the solicitors involved to conduct the hearing. A simple $5,000 levies bill can blow out to almost $10,000. There is no value in challenging levies in court.
Despite that, lot owners at times like to take the owners corporation to NCAT. Lot owners are misinformed of the ability of NCAT to award costs. Although in tenancy matters costs are not awarded to either side, in strata matters, costs are normally awarded as part of the court.
We are presently involved with assessing the costs of a strata scheme. The lot owner, who did not have a good case, took the strata scheme to NCAT. Costs are now being ordered against him and he will receive a bill for approximately $5,000.
The court or tribunal is not the place for lot owners to air their grievances. Yes, if you really have a good case, you should take it to NCAT. Don’t, however, use NCAT as a mean of airing grievances that have no legal outcome.