Published tribunal order
Tenancy Tribunal case 9044384 — Tenancy dispute in Auckland, Auckland
Decided 31 Oct 2023 · Published 31 Oct 2023 · Application 9044384
Landlord favoured
- Unit Titles
Order
- HHTS Limited must pay Body Corporate 406198 the sum of $100,000.00 immediately, calculated as follows: DescriptionsApplicant Levies$89,532.59 Debt collection costs - Secretary$402.50 Costs: Debt collection costs - Legal$5,010.69 Costs: Appearance at hearing - 1 hour $265.00 Filing Fee$500.00 Interest$4,289.22 Total payable by Respondent to Applicant $100,000.00
Reasons
- Only the Body Corporate representative attended the hearing. I am satisfied that the Unit Owner has been notified of the hearing, so I will proceed to consider the claim in their absence.
- The Body Corporate has applied for recovery of unpaid levies, interest, costs and the filing fee from the Unit Owner.
- It is relevant to note that the unit titled complex in which these premises relate, require significant and extensive remediation. In order to fund that work, the Body Corporate has a High Court approved Scheme under section 74 of the Unit Titles Act 2010. The respondent in the matter currently before the Tribunal was a respondent to that application for the creation of the Scheme before the High Court. I have reviewed that approved Scheme, which in short allows the Body Corporate to levy the unit owners calculated by way of the respective utility interest for the premises, in order to fund the remediation works.
- The Scheme also provide a dispute resolution mechanism, but also confirms that: If an Owner objects to a Body Corporate decision under clause 4 relating to the amount of a contribution the Owner is required to pay, the contribution must be paid before the objection may be lodged.
- It is the case that the Body Corporate has raised levies for the usual operational purposes, and also raised levies for the building remediation work under the Scheme. Those levies were invoiced to the Unit Owner, but they have not been paid. That is the subject of this application to the Tribunal, along with the relevant collection costs and interest.
- A hearing was scheduled on 31 October 2023. There was an appearance by the representative for the Body Corporate, but no appearance by 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. The Unit Owner is also liable to pay levies as raised under the remediation Scheme, see section 74 Unit Titles Act 2010.
- The Body Corporate has determined the levies payable and 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.
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.
- The Body Corporate has resolved to charge interest at 10% per annum on unpaid levies. The Body Corporate has proved the amount of interest owing from the due date to the hearing date.
- I note for completeness that the maximum order the Tribunal can make, is to order a party to pay up to $100,000.00. In this case the total amount of the claim is just over that level. The Body Corporate’s representative has requested that the interest ordered be reduced to ensure that the claim falls within the Tribunals jurisdiction. In doing so, it is the case that the Body Corporate cannot seek to recover any additional amount of interest charge which is excused, which totalled $1,140.08.
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. I am satisfied that the costs ordered above are reasonable.
- Because the body corporate has succeeded with the claim I have reimbursed the filing fee. Section 176(1) Unit Titles Act 2010 and section 102(4) Residential Tenancies Act 1986.