Strata Manager Penalty Fees

[DistinctPM]

I am a PM and have recently seen a massive increase in fees being charged by Strata Managers to owners for late payment of accounts. These fees are paid to the Strata Manager and not to the Body Corporate. For example, one Strata Manager in Canberra applies a fee of $44 if payment is not made within 30 days and a first reminder notice is sent, this increases to $88 (in addition to the $44 initially charged) for the second and any subsequent reminders.

I know the simple answer is to pay the fees on time to avoid the fee however I'm keen to understand if anyone has had any experience challenging these 'fees' on the basis that they are in fact a penalty rather than a fee designed to cover costs. It seems to me that they are clearly excessive when all they are doing is posting a reminder notice, I could understand something under $10 but $44 and $88??????.

The other thing is the levy notices always seem to arrive more than 15 days after they have been printed (leaving 15 days or less for payment) - feels like a scam to me but seems fairly common in Canberra.

Has anyone had experiences with this?

 

[Scott No Mates]

Not sure about the legality of charging late fees - the SM is engaged by the BC, they cannot commit money unless it is in the bank so if fees are outstanding it either has be drawn from the sinking/admin funds or not paid.

 

[buzzlightyear]

This is the same principle that is being fought out against the banks on late fees on credit card payments.

Coincidentally, I am going through the same thing right now. The initial response was that they have the authority to charge the cost, but they are referring it 'up the line'.

Ultimately, if I paid on time, there wouldn't be a late fee, I admit. But i will waste a bit of their time, in defending their late fees, and keep on perstering them for the return of the excess amount, so at least they earn it!

 

[mattysavager]

It is a CONSTANT STRUGGLE paying BC Levies on time for our clients.

They always seem to take a week to get to us after the "issued date" and often that leaves less than 20 days to pay the levies (often well over $1000).

As far as I'm concerned - Strata Managers must have the magic formula for charging clients. My last annual statement for my IP including over $500 in photocopying (and I have a cheap strata manager).

Many of them give discounts if paid by the due date, so that anyone who pays late is penalised by paying the full amount.

I agree that the late penalties are extreme. One bunch I deal with charges 40% p.a. interest on the FULL levied amount if the full amount is not paid on time. I am confident that the sinking fund does not see a dime of that.

There does need to be a system to stop the chronic late and non payers - but I would be happy with maybe a 60 day invoice, which I'm sure would reduce the follow up required.