Published tribunal order
Tenancy Tribunal case 9049324 — Tenancy dispute in Mount Wellington, Auckland
Decided 15 Mar 2024 · Published 15 Mar 2024 · Application 9049324
Landlord favoured
- Interest
- Unit Titles
Order
- Snezana Karanfilovska Lozova, Aleksandar Lazov must pay Body Corporate 179319 $5,484.72 immediately, calculated as follows: DescriptionsApplicantRespondent Section 124 costs including GST and disbursements $4,643.99 Appearance at the hearing ($200.00 per hour plus GST) $230.00 Filing fee$500.00 Interest$110.73 Total award$5,484.72 Total payable by Respondent to Applicant $5,484.72
Reasons
- The hearing was held by teleconference on 28 February 2024. Both parties attended the hearing.
- The Body Corporate has applied for recovery of unpaid levies, interest, costs and the filing fee from the Unit Owner. The application was filed on 13 November 2023.
Does the Unit Owner owe the levies claimed?
- A unit owner must pay all body corporate levies and outgoings payable for the unit. See sections 80(1)(f) and 121(1) Unit Titles Act 2010.
- The Body Corporate has determined the levies payable and the Unit Owner's share has been calculated according to their utility interest.
- The Body Corporate has fixed the due date for the levies to be paid, and the Unit Owner has not paid the levies by that date. See section 124(1) Unit Titles Act 2010.
- The Body Corporate has provided records to prove the amount claimed.
- Since filing the application, the Unit Owner has paid the outstanding levies.
Is the Unit Owner liable for interest?
- If a unit owner fails to pay levies by the due date, interest accrues on the unpaid balance. A body corporate may charge interest up to 10% per annum. See section 128 Unit Titles Act 2010.
- Mr Lazov contends that they had not been properly informed of the unpaid levies. He says all previous payments had been made on time. However, they had to move to Australia for a while as his grandmother was unwell and did not receive notice of the levies despite checking his email. It was not until his father returned to New Zealand in November that they became aware of the outstanding levies and payment was therefore made.
- Mr Lazov submits that the Body Corporate failed to exercise their discretion not to charge late or penalty interests on the unpaid levies given they had a good history of payment. He was disappointed that there was no understanding or empathy from the Body Corporate.
- I am satisfied that the invoices were emailed to the Unit Owner’s address registered with the Body Corporate. While I acknowledge the Unit Owner’s circumstances, the onus remains on the Unit Owner to pay levies when due and to enquire if demand for payment of levies may have gone astray.
- I am unable to accept the Unit Owner’s submissions as the basis not to accede to the Body Corporate’s claim for penalty interests.
- Section 128(1) Unit Tiles Act 2010 clearly provides that if a unit owner owes money to the body corporate under section 121, 124, 125, 126, or 127, interest accrues as the debt remains unpaid. Section 128(2) authorises the body corporate to charge interest on unpaid debt provided they do not exceed 10% per annum.
- The Body Corporate has resolved to charge interest at 10% per annum on unpaid levies. This resolution must be followed through by the Tribunal in its determination of the Body Corporate’s claim. The Tribunal has no discretion to waive the interest charged by the Body Corporate under section 128.
- The Body Corporate has proved the amount of interest owing from the due date to 22 February 2024 totalling $110.73; accordingly, there will be an order for the Unit Owner to pay that amount of interest to the Body Corporate.
Is the Unit Owner liable for costs?
- Pursuant to section 124 UTA, and as resolved at meetings of the Body Corporate, the Body Corporate is entitled to recover any reasonable costs incurred by it in collecting unpaid levies as a debt due by the owner to the Body Corporate. In accordance with the judgments (of the District Court and Court of Appeal respectively) in Body Corporate 162791 v Cheah DC Auckland, CIV2014-004- 0120, 24 June 2014 and Body Corporate 162791 v Gilbert [2015] NZCA 185, the Tribunal must order that the reasonable costs incurred by the Body Corporate in recovering the levies, objectively assessed, be paid by a defaulting unit owner.
- Since filing the application, the Unit Owner has paid the strata debt collection charges.
- I am satisfied that the remaining costs ordered above are reasonable.
- The fact remains that the Unit Owner has defaulted in payment of those levies that fell due at the material time. Unlike businesses, there is no obligation on the Body Corporate to exercise “understanding or empathy” to the Unit Owner or to forebear with the late payment of levies.
- Likewise, the Tribunal has no discretion to waive the reasonable collection costs and reasonable solicitor-client’s costs incurred by the Body Corporate (when proved) in pursuing this claim before the Tribunal.
- As the Body Corporate has succeeded with the claim, I have also reimbursed the filing fee. Section 176(1) Unit Titles Act 2010 and section 102(4) Residential Tenancies Act 1986.