What happens if you don’t pay strata levies in NSW?

Strata levies are not optional — they are how the building pays its bills, and the law treats them as a debt you owe the owners corporation. If you fall behind, a series of consequences follows. Here is what actually happens when a levy goes unpaid in NSW, what it costs, and the support available if you are in genuine difficulty.

When a levy is overdue

A levy is overdue the day after its due date. There is no grace period built into the legislation, though your scheme will usually send a reminder. From that point, the amount is treated as a debt owed to the owners corporation.

You become an ‘unfinancial’ owner

Once you have an unpaid levy, you become an unfinancial owner. The main consequence is that you lose the right to vote on most motions at general meetings — ordinary and special resolutions — until you are paid up. You keep your vote only on matters that require a unanimous resolution. For an engaged owner, losing your say at the AGM is a real cost.

Interest at 10%

If a levy stays unpaid for one month after the due date, interest starts to accrue at 10% per year (simple interest) under section 85 of the Strata Schemes Management Act 2015. The owners corporation can resolve to charge a lower rate or none at all — for example, in hardship — but the default is 10%.

Debt recovery

Unpaid levies are a debt the owners corporation can recover under section 86, and it can also recover the reasonable costs it incurs chasing the debt. In practice this can escalate from reminders to a letter of demand, and ultimately to recovery action in the Local Court. The longer it runs, the more interest and cost is added — which is why acting early always works out cheaper.

Your right to ask for a payment plan

You have a right to ask for help. An owner and the owners corporation can agree to a payment plan for overdue levies, generally up to 12 months. Since the 2025 reforms, an owners corporation cannot pass a blanket rule refusing payment plans — each request must be considered on its merits (though it can be reasonably refused in a particular case). And every levy notice now comes with a Financial Hardship Information Statement, so the path to help travels with the bill.

Help if you’re struggling

If you are worried about paying, the worst thing to do is go quiet. Contact your owners corporation or committee early, explain your situation, and propose a realistic repayment arrangement. Free, independent help is available from the National Debt Helpline on 1800 007 007, and NSW Fair Trading offers free mediation if there is a dispute about your levies. If you receive court documents, get advice straight away.

For the committee: handling arrears fairly and firmly

If you are on the committee, arrears are a cash-flow problem and a people problem at once. The scheme still has to pay its insurer and contractors, so chasing levies matters — but the 2025 rules require you to offer payment plans and treat hardship seriously. The practical answer is visibility: knowing exactly who is behind, by how much, and for how long, so you can act early and consistently rather than letting debts quietly grow.

Doing it the easy way with OneStrata

• Payment status, per lot. OneStrata tracks who has paid and who is behind automatically — arrears are visible the day they happen, not discovered at the AGM.
• Owners see their own balance. Through the resident portal, each owner can see exactly what they owe — which heads off the “I didn’t know” conversation.
• A clear record for recovery. Every levy, payment and reminder is recorded, so if a debt does escalate you have the clean history to support it.
• Hardship handled properly. With the full picture in front of you, offering a fair payment plan — as the rules now require — is straightforward.

Staying on top of arrears

• Issue levy notices on time, with the Financial Hardship Information Statement attached
• Track each lot’s payment status and flag overdue amounts promptly
• Send reminders early, before interest and costs build up
• Apply 10% interest after one month overdue (unless the OC resolves otherwise)
• Consider every payment-plan request on its merits — never refuse as a blanket rule
• Keep a clear record of levies, payments, reminders and any plan
• Escalate to formal recovery only after fair steps, keeping costs reasonable

This guide is general information for NSW strata owners and committees, not legal or financial advice. Levies, interest, recovery and payment plans are governed by the Strata Schemes Management Act 2015 (including sections 85 and 86) and were affected by the 2025 strata reforms; always confirm current requirements with NSW Fair Trading (nsw.gov.au). If you are in financial difficulty, free independent advice is available from the National Debt Helpline on 1800 007 007. OneStrata is record-keeping and management software for small to medium size strata schemes; it is not a licensed strata managing agent and never holds your funds.

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