“From a health perspective, the support from the community meant everything to the mental health of Nitsa and Spiros – they cried while reading the messages of support, but their tears were tears of sincere gratitude rather than tears of fear, helplessness and anguish.”
The Tzavellas’ original debt was around $18,000, of which they say they paid $13,000 in regular installments before receiving legal advice to stop paying. Two weeks ago, the debt had risen to $44,000 due to a 10% interest rate and rapidly growing legal fees from the owners’ corporation and the condo corporation.
The nephew set a fundraising goal of $60,000 based on Khalil’s advice on the likely amount needed to settle the debt.
This is not expected to affect the couple’s pension, as a Services Australia spokesperson said the agency generally treats money received from crowdfunding or other fundraising appeal as a gift rather than l assess as income.
Khalil said bankruptcy proceedings have been adjourned until August 9 and that she has entered into discussions with the plaintiff’s attorney to negotiate a settlement before that deadline.
She was also looking for a lawyer who could advise on how best to distribute the funds, such as whether an in-trust account is needed.
“Another unresolved issue is that every unit owner’s windows have been replaced except for [theirs]Khalil added. “This latest injustice in this whole debacle also needs to be righted.”
A little while before The Herald of the Sun article, the couple applied for Centrelink’s Home Equity Release Program – a government program similar to a reverse mortgage for retirees. Khalil said they would pursue this request because it was important for retirees to have access to emergency funds to pay for unexpected expenses.
She said comments on social media showed the community expects the government to fix the legislation so that vulnerable people are not forced into bankruptcy over strata debts. The Herald of the Sun The article quoted several consumer finance experts calling for reforms such as raising the personal bankruptcy threshold to $50,000 from the current $10,000 and requiring landlord companies to offer difficulties.
Khalil said it was inappropriate for people to direct anger at the strata society, which was simply acting under the instructions of the owners society, and that the real aim should be to seek to change the legislation to include provisions on the difficulties.
Strata Community Association (NSW) president Stephen Brell said the organization sympathized with the Tzavellas but had confirmed with their Strata society that the improvements to the building were necessary works to maintain safety and building integrity.
Brell said landlord companies should be aware that they do not have to charge interest on strata debt and can offer payment plans for overdue levies, and should only consider bankruptcy if last resort. However, he opposed raising the bankruptcy threshold to $50,000, saying it had the “potential to create financial calamity” by removing the consequences for homeowners who refuse to pay their debts.
Strata attorney Amanda Farmer of Your Strata Property said the law requires buildings to have a capital fund plan to plan for predictable maintenance costs up to 10 years in advance. “The problem is, there’s no legal requirement to follow this plan,” Farmer said.
“There are many apartment buildings in Sydney that are failing to meet their obligation to repair and maintain common property. They are only increasing the bare minimum of levies and the current owners are keeping their fingers crossed and hoping that any problem on the track is not theirs, it will be the problem of a future owner they have sold to.
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