Steps to Attach Rental Income Through CSOS to Pay Outstanding Arrear Levies

Arrear Levies, Property Law

In community schemes governed by the Community Schemes Ombud Service (CSOS) Act, it’s not uncommon for disputes to arise over outstanding arrear levies. When owners fail to meet their financial obligations to the body corporate, it can strain the resources needed for the upkeep of shared spaces and amenities. One avenue available to community schemes seeking to recover these unpaid levies is to attach rental income from units owned by delinquent owners.

Here’s a guide outlining the steps involved in this process.

1. Understanding the Legal Framework:

Before initiating any action, it’s essential to understand the legal framework governing community schemes and dispute resolution mechanisms under the CSOS Act. Sections 38 and 39(1)(e) of the CSOS Act provide the authority for parties to make applications and seek orders for the payment or repayment of contributions or any other amount related to financial issues, including outstanding arrear levies.

2. Review Governing Documents:

Review the governing documents of the community scheme, including the rules, regulations, and management guidelines. These documents often contain provisions regarding levies, financial management, and dispute resolution procedures, which can guide your actions.

3. Exhaust Internal Resolution Mechanisms:

Before escalating the matter to the CSOS, attempt to resolve the dispute internally through negotiation, mediation, or arbitration. Open communication channels with the delinquent owner and explore options for repayment or resolution of any underlying issues contributing to non-payment.

4. Submit an Application to the CSOS:

If internal resolution efforts prove unsuccessful, file an application with the CSOS in accordance with the procedures outlined in the CSOS Act. Ensure that the application contains all necessary documentation, including evidence of the outstanding arrear levies, communication attempts with the owner, and any relevant supporting documents.

5. Adjudication Process:

Once the CSOS accepts the application, the matter will be referred to an adjudicator for resolution. The adjudicator will evaluate the evidence presented by both parties and decide based on the merits of the case and relevant legal provisions, as outlined in Section 50 of the CSOS Act.

6. Seek Order for Attachment of Rental Income:

In cases where the delinquent owner receives rental income from their property within the community scheme, request the adjudicator to issue an order directing the tenant to pay the rental income directly to the body corporate until the outstanding arrear levies are settled. This action is in accordance with Section 39(1)(f) of the CSOS Act.

7. Compliance and Enforcement:

If the adjudicator grants the order for attachment of rental income, ensure compliance by notifying the tenant of their obligation to make payments to the body corporate as directed. Monitor payments received and take appropriate enforcement actions in case of non-compliance.

Conclusion:

Attaching rental income through the CSOS to pay outstanding arrear levies can be an effective mechanism for recovering unpaid dues within community schemes. By understanding the legal framework, following proper procedures, and seeking resolution through the CSOS adjudication process, community schemes can address financial disputes and ensure equitable contributions from all members towards the maintenance and sustainability of shared amenities.

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