Unit Owner Ordered to Pay Interest and Costs for Late Levies
📌 In brief
The Tenancy Tribunal ruled that a unit owner must pay interest and costs when they fail to pay levies on time. This decision was made under the Unit Titles Act 2010, emphasising the importance of timely payments to avoid additional charges.
⚖️ Legal holding
A unit owner is liable for interest, costs, and filing fees under the Unit Titles Act 2010 when they fail to pay levies in a timely manner.
📖 What the law says
This rule allows a body corporate to decide how much money is needed for its funds and to charge unit owners for these amounts. These charges, called levies, are used to set up and maintain the various funds for the property.
This rule states that a body corporate must set a due date for levy payments. If a levy is not paid, the body corporate can recover the unpaid amount, along with any reasonable costs for collecting it, as a debt from the unit owner.
This rule explains that if a unit owner owes money to the body corporate under certain sections of the Act, interest will be added to the unpaid amount. The interest rate charged by the body corporate cannot be more than 10% per year.
Plain-English explanation — does not replace advice from a lawyer.
📖 Technical summary
The claimant successfully recovered interest, costs, and filing fees from the respondent under the Unit Titles Act 2010.
📜 Headnote Official document
In a case before the Tenancy Tribunal, the claimant successfully recovered interest, costs, and filing fees from the respondent under the Unit Titles Act 2010. The Tribunal found that the respondent was liable for these charges due to failing to pay levies in a timely manner.
📚 Full judgment Official document
__________________________________________________________________________________ 9061464 1
[2025] NZTT Remote Location 9061464
TENANCY TRIBUNAL AT Remote Location
APPLICANT: [redacted]
RESPONDENT: [redacted] Owner, Owner
UNIT ADDRESS: Unit/Flat 39(AL), [ADDRESS], [POSTCODE], [ADDRESS]
1. [NAME] must pay [NAME] $8,220.91 immediately, calculated as follows:
Descriptions Applicant Respondent
Unpaid debt collection charges $97.75 Preparing and filing the application $776.25 Filing Fee $500.00 Attendance at the hearing and disbursements @ $195.00 p/hour + GST
$224.25
Total Interest to 30/01/2024 $6,622.66 Total award $8,220.91 Total payable by Respondent to Applicant
$8,220.91
Reasons:
1. A hearing was held on 22 January 2025 by teleconference. Ms [NAME] attended for [NAME] and [NAME] attended for the Unit Owner.
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2. [NAME] has applied for recovery of interest, costs and the filing fee from the Unit Owner.
Relevant law
3. The relevant provisions of the Unit Titles Act 2010 (UTA) support [NAME]’s claim. Under section 121, [NAME] is responsible for maintaining a fund to cover expenses and levying contributions from unit owners. Section 138 mandates that [NAME] must repair and maintain common property, while section 135 requires it to insure buildings to their full insurable value. Further, section 80(1)(f) imposes an obligation on unit owners to pay all levies and other charges related to their unit. Section 124(2) states that any unpaid levies, along with reasonable debt collection costs, are recoverable as a debt. Additionally, section 128 allows [NAME] to charge penalty interest at up to 10% per annum on unpaid levies.
4. In this case, [NAME] validly appointed [COMPANY] (“Boutique”) as its Secretary/Manager and authorised it to collect levies on behalf of [NAME]. At the Annual General Meeting in August 2017, [NAME] resolved to adopt a structured debt collection policy, which was communicated to all unit owners. This included authorising Boutique and its collection agency, [COMPANY] (“BCLS”), to recover arrears, including penalty interest and all associated costs. The High Court’s section 74 scheme order on 11 February 2019 further confirmed that unit owners were liable for remedial work levies, which were apportioned based on ownership interest.
Is the Unit Owner liable for interest?
5. The UTA imposes a clear obligation on unit owners to pay levies when due. [NAME]’s authority to charge interest at 10% per annum is explicitly permitted under section 128, and [NAME] properly resolved to do so.
6. The Unit Owner faced challenges in making timely payments for remedial work levies, leading to interest accumulating on the unpaid balance. While the Unit Owner has expressed that financial difficulties caused by COVID-19 and caring for a sick father have significantly impacted their ability to pay, the legislation does not provide the flexibility to waive penalty interest in such circumstances. It’s important to acknowledge the personal hardships involved, but ultimately, the responsibility for ensuring timely payment of levies rests with the Unit Owner, even in difficult times.
7. Moreover, the Unit Owner had agreed to a payment plan but still accrued significant late fees. [NAME] fairly rejected the request to waive penalty interest, as doing so would disadvantage other owners who either paid on
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time or incurred similar charges. The Tribunal, therefore, finds that [NAME] is entitled to the full amount of $6,622.66 in penalty interest.
Is the Unit Owner liable for costs?
8. Pursuant to section 124 UTA, and as resolved at meetings of [NAME] is entitled to recover any reasonable costs incurred by it in collecting unpaid levies as a debt due by the owner to [NAME]. In accordance with the judgments (of the District Court and Court of Appeal respectively) in [NAME] 162791 v [NAME] DC Auckland, CIV2014-004- 0120, 24 June 2014 and [NAME] 162791 v Gilbert [2015] NZCA 185, the Tribunal must order that the reasonable costs incurred by [NAME] in recovering the levies, objectively assessed, be paid by a defaulting Unit Owner.
9. [NAME] properly adopted a structured debt collection process and communicated it to all unit owners. The costs incurred in pursuing the outstanding levies, including the $97.75 for issuing a notice of intention to issue proceedings and $776.25 in application preparation costs, are reasonable and recoverable under this provision.
10. While the Unit Owner believes these costs are excessive, the case law establishes that Unit Owners are liable for reasonable recovery costs. The Tribunal has no discretion to waive or reduce these costs based on financial hardship or payment plans. The fact that the Unit Owner eventually cleared the levies does not negate their obligation to pay the debt collection costs incurred due to their late payments.
11.As [NAME] has succeeded with the claim, I must order the other party to reimburse the filing fee. Section 176(1) Unit Titles Act 2010 and section 102(4) Residential Tenancies Act 1986.
[NAME] 17 March 2025
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Please read carefully:
SHOULD YOU REQUIRE ANY HELP OR INFORMATION REGARDING THIS [COMPANY] [PHONE].
MEHEMA HE PĀTAI TĀU E PĀ ANA KI TENEI TAKE, PĀTAI ATU KI TE [COMPANY] [PHONE].
AFAI E TE MANA’OMIA SE FESOASOANI E UIGA I LENEI MATAUPU FA’AMOLEMOLE IA FA’AFESO’OTAI’I LOA LE OFISA O LE [COMPANY] [PHONE].
Rehearings:
You may make an application to the Tenancy Tribunal for a rehearing. Such an application must be made within five working days of the order and must be lodged at the Court where the dispute was heard.
The only ground for a rehearing of an application is that a substantial wrong or miscarriage of justice has or may have occurred or is likely to occur. Being unhappy or dissatisfied with the decision is not a ground for a rehearing. (See ‘Right of Appeal’ below).
Right of Appeal:
If you are dissatisfied with the decision of the Tenancy Tribunal, you may appeal to the District Court. You only have 10 working days after the date of the decision to lodge a notice of appeal.
However, you may not appeal to the District Court:
1. Against an interim order made by the Tribunal. 2. Against an order, or the failure to make an order, for the payment of money where the
amount that would be in dispute on appeal is less than $1,000. 3. Against a work order, or the failure to make a work order, where the value of the work
that would be in dispute on appeal is less than $1,000.
There is a $200.00 filing fee payable at the time of filing the appeal.
Enforcement:
Where the Tribunal made an order that needs to be enforced then the party seeking enforcement should contact the Collections Office of the District Court on [PHONE] or go to www.justice.govt.nz/fines/civil-debt for forms and information.
Notice to a party ordered to pay money or vacate premises, etc:
Failure to comply with any order may result in substantial additional costs for enforcement. It may also involve being ordered to appear in the District Court for an examination of your means or seizure of your property.
http://www.justice.govt.nz/fines/civil-debt
⚖️ What tends to weigh in cases like this
✅ Tends to be accepted
- The Unit Owner is responsible for paying levies as mandated by the Unit Titles Act 2010.
- Penalty interest can be charged at up to 10% per annum on unpaid levies.
- Reasonable costs incurred in collecting unpaid levies are recoverable from the Unit Owner.
- The filing fee is recoverable from the Unit Owner as per the Unit Titles Act 2010.
❌ Tends to be rejected
- Financial difficulties caused by COVID-19 and caring for a sick family member do not exempt the Unit Owner from paying penalty interest.
- The Unit Owner's agreement to a payment plan does not prevent the accrual of late fees and penalty interest.
- The Tribunal does not have discretion to waive or reduce recovery costs based on financial hardship or payment plans.
Patterns observed in similar cases in this collection — every case is unique.
❓ Frequently asked questions
What did this decision decide?
The Tenancy Tribunal decided that the unit owner must pay interest and costs for failing to pay levies on time.
What was the dispute about?
The dispute was about whether the unit owner was liable for interest and costs for not paying levies promptly.
How did the court decide, and why?
The court decided that the unit owner was liable for interest and costs because they failed to pay levies on time, as required by the Unit Titles Act 2010.
Which laws or rules were applied?
The Unit Titles Act 2010, sections 121, 124(2), and 128 were applied.
What was the argument that mattered most?
The argument that mattered most was that the unit owner had a clear obligation to pay levies on time and was liable for interest and costs under the Unit Titles Act 2010.
Was the decision for or against the person who brought the case?
The decision was for the person who brought the case.
What does this mean for someone in a similar situation?
For someone in a similar situation, it means that they must ensure timely payment of levies to avoid interest and costs.
What evidence or documents mattered?
The judgment does not specify the exact evidence or documents that mattered.