2. Make a Strata Payment Plan that Works for You and the Council
A strata corporation wouldn’t be doing its job if it didn’t actively try to collect what’s owed. However, that doesn’t mean the volunteers in charge of its management won’t be sympathetic to your challenges. After all, owners are neighbours, and some may be friends as well. Decide what kind of payment schedule might be reasonable for both you and the council and propose it to them in writing. This can give you the needed breathing room to pay your late strata fees without stretching your emergency budget too thin.
While making a payment plan is a good option, failing to follow through with it will only make things worse. That’s why it’s important to craft a realistic budget before you offer a way to clear up what you owe. Like any other creditor, your strata expects that when you’re unable to make your normal payments and agree to alternate arrangements, you stay true to your word. And like any other creditor, communication when you’re unable to pay is essential. If your strata council only hears silence from you, they’ll be left with no choice but to proceed with legal action.
What Happens If Legal Action Starts Against Your Strata Fee Arrears?
Should your council proceed with legal action, most stratas have a bylaw that allows those costs to be charged back to your account, rather than be shouldered by all of the owners. This means that you could owe as much as $1,000 in legal fees on top of your arrears. However, if your council proceeds with legal action, it’s not all bad news. When a lien is registered against your strata lot it is to protect the strata corporation from a potential loss. That lien also means that the council is in a better position to entertain a reasonable and affordable payment plan from you to catch up. In a perfect world, you will be able to escape having a lien registered against your home, but if it does happen, look over the information from the lawyer to learn more before panic sets in.
Re-Proposing a Strata Fee Payment Plan
If you have reneged on a previous payment arrangement, expect an uphill battle with any new plan you put forth, especially if there is no lien in place. That said, there are steps you can take to strengthen your position. Start by explaining if you’ve freed up cash in your budget that previously wasn’t available. This could be outlining which bills you’ve reduced and what that total comes to on a monthly basis. If you’ve taken in a roommate, that’s extra cash for strata arrears. Share as much as you’re comfortable sharing and provide proof wherever possible.
If you’re not behind with your monthly mortgage payments, you might be able to ask your lender for a hardship deferral. This would allow you to redirect mortgage payment money to catch up on your strata fees. Selling some possessions is another option to raise money for your strata payments. Whatever you choose to do, get proof and use it to show that this payment plan will end differently from the last one. Your goal is to convince the strata council that you have the ability to follow through with what you’ve proposed. Be sure that you can afford whatever you agree to, as it’s unlikely you’ll get another chance.
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