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ARTICLE · 18 JULY 2024

Liquidators Should Be Aware Of Strata Levies

Vincent Young
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A liquidator has the power to sell all or any part of the property of a company to which the liquidator is appointed under section 477(2) of the Corporations Act 2001 (Cth) (Corporations Act).

AustraliaReal Estate and Construction
David Greenberg
David Greenberg

The effect of strata levies on a winding up

A liquidator has the power to sell all or any part of the property of a company to which the liquidator is appointed under section 477(2) of the Corporations Act 2001 (Cth) (Corporations Act). When the court appoints a liquidator to wind up a company that trades as a property developer, the liquidator can sell any developed or partially developed lots owned by the developer. However, it can be difficult for a liquidator to sell developed or partially developed lots when those lots are burdened by unpaid strata levies for building defects. These levies cannot be amended or rescinded by the developer company because of the effect of clause 15 of schedule 1 of the Strata Schemes Management Act 2015 (NSW) (SSM Act). As a result, the levies effectively increase the purchase price of the developed or partially developed lots and can make the lots difficult to sell.

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