Published tribunal order
Tenancy Tribunal case 9055564 — Tenancy dispute in Mangere, Auckland
Decided 3 Dec 2024 · Published 3 Dec 2024 · Application 9055564
Landlord favoured
- Interest
- Unit Titles
Order
- Husnawati Hasfialdi, Hasfialdi Hasfialdi must pay Body Corporate 196637 $19,765.19 immediately, calculated as follows: DescriptionsApplicantRespondent Unpaid Levies$7,288.69 Body Corporate Manager's debt collection charges $1,090.20 Section 124 costs, including GST &disbursements $5,942.36 Appearance at hearing (1 hour a $270.00 per hour plus GST) $310.50 Filing Fee$500.00 Interest to 3 December 2024$4,633.44 Total award$19,765.19 Total payable by Respondent to Applicant $19,765.19
Reasons
- Both parties attended the hearing which was held by teleconference.
- The Body Corporate has applied for recovery of unpaid levies, interest, costs and the filing fee from the Unit Owner.
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 (“UTA”). This obligation is clear and non-negotiable, ensuring that all owners contribute their fair share towards the maintenance and operation of the shared property.
- The Body Corporate has determined the levies payable and Unit Owner's share has been calculated according to their utility interest. This method is consistent with the provisions of the Act, which ensures that each unit owner's financial responsibilities are proportionate to their interest in the property.
- 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. This failure to pay on time is a breach of their legal obligations, reinforcing the Body Corporate's right to claim the overdue amounts.
- Furthermore, the Body Corporate has provided proper records to prove the amount claimed.
- The Unit Owner acknowledged that there were unpaid levies due to difficult financial circumstances. But they did not consider it was as much as the amount claimed. The Unit Owner has not provided any independent evidence to support their view.
- Although the Unit Owner acknowledged the existence of unpaid levies, citing difficult financial circumstances, they dispute the total amount claimed. However, their position remains unsupported by independent evidence, leaving the Body Corporate's claim unchallenged and legally valid.
Is the Unit Owner liable for interest?
- The Unit Owner is liable for interest on unpaid levies, as per section 128 UTA. If the levies are not paid by the due date, interest accrues on the outstanding balance, and the Body Corporate may charge interest up to 10% per annum.
- Section 128(1) UTA clearly states that interest accrues on unpaid levies, and section 128(2) allows the Body Corporate to charge interest at a rate not exceeding 10% per annum.
- The Unit Owner disputes the claim for interest and considers the Body Corporate should have exercised discretion and waived the interest due to their financial difficulties and the effort made to pay the debt and establish a repayment plan. However, while I acknowledge the Unit Owner's circumstances, the responsibility to ensure levies are paid on time ultimately lies with the Unit Owner. The onus is on them to manage their financial obligations and make timely payments, regardless of their personal situation or efforts to pay the debt and set up a repayment plan.
- The Body Corporate has resolved to charge the interest rate of 10% per annum on unpaid levies. This decision is binding, and the Tribunal has no discretion to waive the interest charges. The Body Corporate has provided evidence of the interest owed, totalling $4,633.44 from the due date to the date of the hearing Therefore, the Unit Owner is required to pay this interest amount.
Is the Unit Owner liable for costs?
- Under section 124 of the Unit Titles Act, and as resolved in meetings of the Body Corporate, the Body Corporate is entitled to recover reasonable costs incurred in collecting unpaid levies as a debt owed by the Unit Owner. According to the rulings 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 is required to order the Unit Owner to pay the reasonable costs incurred by the Body Corporate in recovering the levies, as objectively assessed.
- I am satisfied that the costs ordered are reasonable. The Unit Owner considered these costs excessive, believing that the Body Corporate had accepted a payment plan arranged through their budget advisor. However, this was not confirmed by the Body Corporate’s representative. Despite this, the Unit Owner defaulted on the payment of the levies when due. Unlike businesses, the Body Corporate has no obligation to show "understanding or empathy" or to allow for late payments of levies.
- Furthermore, the Tribunal has no discretion to waive or reduce the reasonable collection costs and solicitor-client costs incurred by the Body Corporate in pursuing this claim, even when considering the Unit Owner’s personal circumstances.
- As the Body Corporate has succeeded in its claim, I have reimbursed the filing fee in accordance with section 176 UTA and section 102(4) Residential Tenancies Act 1986.