Strata Fee Debts Behind Half of Canberra’s Bankruptcy Cases, Inquiry Reveals
An inquiry has heard that half of all forced bankruptcies in the ACT last financial year were initiated by strata companies pursuing unpaid fees from unit owners—well above the 12% national average. The ACT Legislative Assembly is currently investigating the operations of strata management, focusing on licensing, powers, conflicts of interest, decision-making, and whether a strata commissioner should be introduced.
The community legal organisation Care, which supports people facing financial hardship, told the inquiry that unit owners unable to pay strata levies are often pushed into bankruptcy—some even losing their homes. Solicitor Tawanda Mukamuri described the figures as “alarming” and linked the issue to broader concerns like homelessness and mental health challenges.
He pointed to shortcomings in the Unit Titles (Management) Act 2011, which offers no mechanism for owners in hardship to request payment deferrals or instalment plans. Care is calling for reforms that would let owners request reasonable payment plans and access independent dispute resolution if denied.
According to Mukamuri, once a levy notice is issued and not paid, the matter is quickly escalated to debt collectors or legal action—further burdening homeowners. Financial counsellor Leasa Mayes added that many owners had requests for payment plans refused, often due to strata managers trying to avoid additional admin work or legal firms profiting from recovery fees.
Mayes noted that arrears as low as $2,500—roughly two missed payments—can lead to debt collection or court proceedings. One tribunal case cited included an additional $1,000 in legal fees on top of the original debt, with costs including appearance and filing fees, interest, and vaguely defined “allowable fees.”
Care also criticized the unpredictable nature of strata levies, which can rise sharply without warning. Mayes said the lack of caps on levy increases made it difficult for owners to budget, with some bills doubling from one quarter to the next due to urgent maintenance or body corporate decisions. Care has proposed legal limits on levy increases, similar to ACT rent controls.
The inquiry is ongoing, and the committee has not yet set a reporting date.
