The Strata Schemes Management Act 1996 requires the Owners Corporation in a Strata Scheme to maintain an Administration Fund, and save for limited exceptions, a Sinking Fund. 

The Administration and Sinking Fund are the accounts from which the Owners Corporation pays the day to day, and longer term, expenses and costs to maintain the building and other common property. To raise the money which form part of the Admin and Sinking funds the Owners Corporation resolves by resolution at general meetings to levy contributions against the owners of the Owners Corporations- being the lot owners in the scheme.

Section 80 of the Act provides that an Owners Corporation may recover as a debt a contribution not paid at the end of one month after it becomes due and payable, together with any interest payable and the expenses of the Owners Corporation incurred in recovering those amounts.

In 2008 the Supreme Court Court of Appeal held in the decision of Strata Plan 36131 v Dimitriou [2009] NSWCA 27 that the word 'expenses' within section 80 includes legal costs incurred in recovering contributions but only to the extent that such costs and disbursements are reasonably incurred and reasonably in amount. 

The Dimitriou judgment was a significant development in the recovery of levies as it meant that the recovery of levies, which for the most part, fall within the jurisdiction of the small claims division of the Local Court were no longer subject to the capped costs provisions within this jurisdiction by reason of the costs (reasonably incurred and reasonable in amount) being part of the claim. 

Prime Lawyers represents Strata Managers throughout Sydney in the recovery of outstanding levies for Owners Corporations. We also advise on all things strata on behalf of the owners including building maintenance, defects litigation against the builder and by-laws. If you are a Strata Manager and would like to speak with one of our strata debt recovery lawyers then get in touch with your nearest Prime Lawyers office to see what we can do for your scheme.