Recovering Outstanding Body Corporate Levies

NEWS & ARTICLES

Article Summary

It is reasonable for the body corporate to have taken the following steps:

  1. Set the contributions to be levied on owners;
  2. Given the correct notice of contribution payable;
  3. Set any discounts for timely payment (if at all);
  4. Set any penalty interest on outstanding levies (if at all); and
  5. If a lot owner is in arrears, serve an arrears notice.

If these steps have been completed (if required) then you will have to commence with the body corporate debt recovery process and engage a body corporate levy recovery lawyer.

Once engaged, a body corporate levy recovery lawyer will commence the legal process of recovering outstanding body corporate levies.  This is done in the following way:

  1. Issuing the lot owner debtor with a letter of demand;
  2. Commencing legal action in the Court with jurisdiction;
  3. Negotiating a settlement or compromise;
  4. Obtaining a judgment or enforceable money order;
  5. Enforce that judgment or Court order.

We will now go into a lot more detail in the article below.

Table of Contents

Recovering Outstanding Body Corporate Levies QueenslandAre you a body corporate with outstanding body corporate levies from a lot owner looking for body corporate debt recovery?

A lot owner in a body corporate scheme is required to pay an agreed amount annually in owners’ contributions and levies.

If lot owners do not pay these contributions and levies, then this could impose a financial burden on the body corporate and/or the other lot owners, forcing the body corporate to commence the body corporate debt recovery process.

Non-payment of body corporate levies may mean that the body corporate is actually in breach of their obligations under the relevant Act, because they do not have the funds to complete the works.

This article will explain the body corporate debt collection process and a bodies corporate rights and entitlements when trying to recover outstanding body corporate levies and owner contributions.

A body corporate in entitled to debt recovery costs reasonably incurred when collecting outstanding body corporate levies. Let us help you recover body corporate debt and overdue strata levies

What are Body Corporate Levies?

There are a number of different levies that need to be paid by lot owners.

The most common are the administrative fund levies and the sinking fund levies.  These levies are to pay for the day-to-day running of the body corporate and the more long-term maintenance works.

These levies include costs for manager fees, cleaning costs of common property, electricity on common property, exterior & interior painting, gardening and landscaping costs, insurance, gate and/or lift and/or intercom maintenance, onsite manager fees, costs of operating the pool, road maintenance & refurbishment.

Sometimes there may be some extra insurance levies, special levies, and exclusive use levies.  These levies are lot-specific levies and/or levies to deal with unexpected or unforeseen works that need to be completed – a tree on common property falls in a storm, for example.

If a lot owner does not pay these strata levies, then the body corporate may not have the funds to complete the works that need to be completed.

This effects the body corporate, the other lot owners, and residents.

Understanding ‘Body Corporate Debt’: A Closer Look

A term often encountered but not always understood in the realm of strata management is ‘body corporate debt’. So, what exactly does it entail?

The definition of “body corporate debt” is contained in Schedule 1 of the Body Corporate and Community Management (Standard Module) Regulation 2020 (Qld) and says:

“body corporate debt” means a following amount owed by a lot owner to the body corporate—
(a) a contribution or an instalment of a contribution;
(b) a penalty for not paying a contribution or an instalment of a contribution by the date for payment;
(c) another amount associated with the ownership of a lot.
Examples of another amount—
• an annual payment for parking under an exclusive use by-law
• an amount owing to the body corporate for lawn mowing services arranged by the body corporate on behalf of the owner

At its core, a ‘body corporate debt’ refers to an amount that a lot owner owes to the body corporate.

This can encompass a variety of financial obligations, including:

  1. Contributions or Instalments: These are regular payments that lot owners are required to make to ensure the smooth functioning of the body corporate. They cover expenses like maintenance, insurance, and other communal services.
  2. Penalties: If a lot owner fails to make their contributions on time, they might incur penalties. These are additional charges imposed to encourage timely payments and to compensate the body corporate for any inconvenience or financial strain caused by the delay.
  3. Other Associated Amounts: This category is broader and can include any other financial obligations tied to the ownership of a lot. For instance, if a lot owner has been granted exclusive use of a parking space under a by-law and there’s an associated annual fee, that fee would fall under this category.

Implications for Lot Owners with Outstanding Debts

Owing a body corporate debt isn’t just a financial matter; it carries with it a range of implications. These implications include:

  1. Legal Repercussions: Bodies corporate have the right to take legal action against lot owners with unpaid debts. This can lead to court cases, additional legal fees, and potential judgments against the lot owner.
  2. Loss of Voting Rights: An ‘unfinancial’ lot owner, or one who has outstanding debts, may lose their voting rights in general meetings. This means they won’t have a say in important decisions affecting the community.
  3. Ineligibility for Committee Positions: Lot owners with debts might also find themselves ineligible to nominate for committee positions or to be elected to the committee, limiting their influence in the body corporate’s management.
  4. Interest and Additional Costs: Over time, unpaid debts can accrue interest, increasing the amount owed. Additionally, the body corporate might recover costs they’ve incurred in chasing the debt, such as legal fees or debt collector charges.

Understanding the concept of ‘body corporate debt’ and its implications is crucial for both lot owners and bodies corporate. It’s not just about money; it’s about maintaining harmony, ensuring fair contributions from all members, and upholding the integrity of the community.

In Green Meadows [2007] QBCCMCmr 486, the Queensland Body Corporate and Community Management Commissioner said:

The legislation is very specific about what constitutes a “body corporate debt” and what should be listed on a notice of contribution payable. “Body corporate debt” means a contribution or instalment, a penalty and another amount associated with the ownership of a lot. These other amounts, in the context of the examples provided and section 96(2) of the Standard Module, would be limited to amounts the owner has agreed to pay associated with services provided to their lot or related to an exclusive use by-law. Recovery costs incurred by the body corporate are not amounts associated with an owner’s ownership of their lot and do not constitute a body corporate debt.

So, care should be taken when assessing these things and a body corporate scheme, committee, or body corporate management should seek legal advice.

Outstanding Body Corporate Levies Recovery

Because of the effect that non-payment of outstanding body corporate levies can have on the body corporate, other lot owners, and residents, there are provisions in the Body Corporate and Community Management Act 1997 (QLD) and the module regulations.

These instruments allow a body corporate to recover:

  1. The amount of the contribution or instalment;
  2. Any penalty for not paying the contribution or instalment;
  3. Any costs (recovery costs) reasonably incurred by the body corporate in recovering the amount.

The Office of the Commissioner for Body Corporate and Community Management Practice Direction 24 also allows for a body corporate to be able to recover the following:

  1. Amounts incurred by a body corporate in repairing damage caused by an owner or in carrying out work which was the obligation of the owner;
  2. Agreed charges for the supply of services by the body corporate; or
  3. Amounts an owner is required to pay under an exclusive use by-law.

This article will explain these in more detail below.

The Amount of the Contribution or Instalment

If a lot owner owes contributions to the administrative fund levy, sinking fund levy, insurance levy, special levy, and/or exclusive use levy, then the body corporate can seek to recover these outstanding body corporate levies.

On-top of the amount of the levy contribution owed by the debtor lot owner, a body corporate is able to add a penalty for non-payment.

Any Penalty for not Paying the Contribution or Instalment

The Module Schedules allow for penalty interest to be added to the debt amount.

The Modules Schedules say:

The body corporate may, by ordinary resolution, fix a penalty to be paid by owners of lots if a contribution, or instalment of contribution, is not received by the body corporate by the date for payment fixed in notices of contribution given to the owners.

The penalty must consist of simple interest at a stated rate (of not more than 2.5%) for each month the contribution or instalment is in arrears.

Therefore, to be able to recover penalty interest, the body corporate must fix the penalty interest rate by ordinary resolution.

This ordinary resolution can be made at the same time as a resolution to engage a body corporate levy recovery lawyer.

Any Recovery Costs Reasonably Incurred by the Body Corporate

The reasonable costs of engaging body corporate levy recovery lawyers and the reasonable outgoings associated with the recovery of the non-payment of body corporate levies can also be claimed.

In Body Corporate for Sunseeker Apartments CTS 618 v. Jasen [2009] QDC 162 Newton DCJ said:

Having regard to the conduct of this litigation by Ms Jasen and the evidence of Mr George I am satisfied that the plaintiff is entitled to recover the sum claimed by way of recovery fees

In this matter Newton DCJ awarded the entire legal costs of the Body Corporate in the amount of $41.445.91.  In legal-speak, this is similar to indemnity costs – if fact the recovery of “reasonably incurred costs” under your particular module schedule may be better than the award of indemnity costs, and may include more than just legal costs.

As to the reasonableness of the costs incurred, Michael Howe, Adjudicator said in Body Corporate for SL8 v Falzon and Anor [2012] QCAT 556:

Whether a cost is reasonably incurred will depend on what was done, whether it was appropriate to incur the cost, when it was done, and the amount of the cost involved.

In an appeal from the Magistrates Court to the District Court on the Magistrate’s Order that:

The defendant pay to the plaintiff the whole of the recovery costs incurred by the plaintiff from and including the date of filing of Southport claim 52186/10, that is 7 December 2010.

It was submitted that there was no evidence as to what recovery costs had been incurred, and so it was not open to the Magistrate to order that all of the costs in fact incurred were both reasonably incurred and reasonable in amount.  McGill SC, DCJ went on to say in Ramzy v Body Corporate for GC3 CTS38396 & Anor [2012] QDC 397:

In relation to the costs of the proceeding in Southport, it was I consider open to the Magistrate to order that those costs be assessed, but this should have followed a conclusion that the conduct of that proceeding had been reasonable, and to have been ordered to be in accordance with the test appropriate to the Regulation, namely such costs as were reasonably incurred and reasonable in amount.

Both of the cases above were cited as good law by Judge Robin QC in Prins v The Body Corporate for the Wave [2013] QDC 66.

Therefore, to ensure that the appropriate award of costs is given, it may be necessary to apply for a costs assessment from a costs assessor, and that the order of the Court be that all reasonably incurred costs be awarded on the indemnity basis, to be assessed if not agreed.

Case Study

At Stonegate Legal we managed to negotiate a deal with a lot owner, where in exchange for discontinuing legal proceedings, she agreed to pay our fees in full, and not just the amount allowed to be claimed in the Magistrates Court scale. This was a great result for our client who was not out-of-pocket very much for legal expenses and the debt was repaid in full with interest.

Body Corporates can Claim Legal Fees in Recovering Levies

Queensland Courts have ruled that body corporates can pursue lot owners for unpaid levies and all associated recovery costs, including legal and debt collector fees.

This decision stems from the interpretation of section 145 of the Body Corporate and Community Management (Standard Module) Regulation 2008 (Qld), which allows body corporates to treat unpaid contributions as ordinary debts and recover any reasonable costs incurred in the process.

A key case in this context is Westpac Banking Corp v Body Corporate for the Wave Community Title Scheme 36237 [2014] QCA 73, where Justice Mullins clarified the extent of a body corporate’s right to recover debts.

The ruling emphasises that body corporates can recover unpaid levies, penalties, and all reasonable costs from the current lot owner, regardless of who accrued the debt. This includes situations where a bank takes possession of a property.

The implications of this ruling are significant for body corporates, empowering them to effectively manage and recover debts. It also underscores the importance for lot owners to stay current with their levy contributions and for prospective buyers to conduct thorough due diligence before investing in a body corporate property.

The case of The Wave specifically highlights the potential for body corporates to claim substantial recovery costs, as demonstrated by a claim of over $150,000 in legal fees for recovering a $5,000 debt (it ended up in a five (5) day trial).

This development provides a clear pathway for body corporates to handle unpaid levies, encouraging the engagement of legal professionals or debt collectors and, if necessary, pursuing court compensation.

The Body Corporate Debt Collection Process

It is reasonable for the body corporate to have taken the following steps:

  1. Set the contributions to be levied on owners;
  2. Given the correct notice of contribution payable;
  3. Set any discounts for timely payment (if at all);
  4. Set any penalty interest on outstanding levies (if at all); and
  5. If a lot owner is in arrears, serve an arrears notice.

If these steps have been completed (if required) then you will have to commence with the body corporate debt recovery process and engage a body corporate levy recovery lawyer.

Body Corporate Levy Recovery Process

Once engaged, a body corporate levy recovery lawyer will commence the legal process of recovering outstanding body corporate levies.  This is done in the following way:

  1. Issuing the lot owner debtor with a letter of demand;
  2. Commencing legal action in the Court with jurisdiction;
  3. Negotiating a settlement or compromise;
  4. Obtaining a judgment or enforceable money order;
  5. Enforce that judgment or Court order.

We will now go into more detail below.

Step 1 – Issuing the Lot Owner Debtor with a Letter of Demand

The first step is to issue a lawyer’s letter of demand.

The letter of demand outlines the particulars of the debtor’s breach, gives then lot owner debtor an outline of the steps taken by the body corporate above.

The letter of demand also foreshadows pending legal action and puts the lot owner debtor on notice that if the body corporate is forced to commence legal action that the lot owner debtor will have to pay all recovery costs reasonably incurred, plus penalty interest (if applicable).

The letter of demand does two things – it encourages the debtor to pay without resorting to costly litigation; and/or if they continue to do nothing, it puts them on notice of an award of costs, which can be used in the cost recovery process.

If the lot owner debtor continues to ignore all reasonable attempts to resolve the matter without litigation, the body corporate may have to instruct the body corporate debt recovery lawyer to commence legal action.

Step 2 – Commencing Legal Action in the Court with Jurisdiction

The various module regulations prescribe that both the Queensland Civil and Administrative Tribunal (“QCAT”) and a Queensland court of competent jurisdiction.  An adjudicator does not have jurisdiction in a debt dispute.

The jurisdictions of the Tribunal and the Courts in relation to civil debt claims is determined by the amount of the debt.

The body corporate would have likely taken a serious wrong-turn in a lot owners’ debt is more that $150,000.00 so most legal action would be commenced in QCAT or the Magistrates Court.

There are advantages and disadvantages with commencing legal action in either QCAT or the Magistrates Court – as a general rule-of-thumb, as solicitors we prefer to commence legal action in the Magistrates Court.

In the Court, an action for the recovery of body corporate debt is commenced by claim and statement of claim.  Once the claim and statement of claim has been drafted and filed in the Court, it has to be served on the lot owner debtor.

Service of a Notice or Process

Service of an originating process on a lot owner who is a natural person must be done by giving a copy of the documents to them personally.  A body corporate is required to keep an address for service of a lot owner.

If the body corporate does not have an address for service of an owner of a lot, then the address for service is the residential or business address, as last notified to the body corporate for the lot owner.

Service of an originating process on a lot owner who is a corporation must be done by sending it by prepaid post to the address of the registered office of the company.

Once served, they will have twenty-eight (28) days to file a notice of intention to defend and defence.

Step 3 – Negotiating a Settlement or Compromise

At this stage, the lot owner debtor might attempt to negotiate a settlement or compromise of some kind.  This is quite common.

The body corporate should give some consideration to the commercial benefits of settling a matter early, without resorting to protracted litigation.

However, the lot owner debtor has obviously demonstrated that they are bad-payers, and so careful consideration should be given to any repayment plans or further promises.

We can help and assist the body corporate with the advantages and disadvantages of settling the matter early and offer a body corporate legal advice on best practices and ways to secure the debt.

More likely, the lot owner will either continue to do nothing, or attempt to defend the legal action.

Step 4 – Obtaining a Judgment or Enforceable Money Order

The main purpose of commencing legal proceedings is to obtain an enforceable money order.

There may be some other orders that a Court may make, but the main purpose for debt recovery proceedings is to recover the outstanding body corporate levies plus costs and interest.

If the debtor does not file a notice of intention to defend and defence within the twenty-eight (28) days, then we can apply to the Court for a judgment in default.

If the lot owner debtor does attempt to defend the proceeding but the lot owner has no real prospect of successfully defending all or a part of the body corporate’s claim; and there is no need for a trial of the claim or the part of the claim, then we can apply for summary judgment on behalf of the body corporate.

Finally, and least likely, the lot owner debtor might make this matter go all the way to a trial.  If this happens (which is unlikely) then the body corporate will be given a judgment at the end of the trial.

Whichever of the above happens, once you have a judgment or enforceable money order, the body corporate can attempt to enforce that judgment on the lot owner.

Step 5 – Enforce that Judgment or Court Order

There are a number of ways to enforce a judgment or money order against a lot owner.  The most obvious being an enforcement warrant for seizure and sale of the real property contained in the lot.

However, if for some reason this is not available, or not preferred then there are a number of other ways to enforce a judgment or money order.

If the judgment debtor is a person, then the body corporate might consider bankruptcy as an enforcement option, or an alternative enforcement warrant to collect outstanding body corporate levies.

If the judgment debtor is a company then the body corporate should consider issuing the judgment debtor with a creditor’s statutory demand and commence winding up proceedings to recover outstanding body corporate levies by putting the company into liquidation.

However, the obvious choice is to apply for an enforcement warrant for seizure and sale of the lot owner’s real property.  This includes, but it not limited to the lot in the scheme.

This type of enforcement warrant is good for two main reasons – firstly it leverages the equity in the real property to pay the judgment debt; but it also removes and replaces the lot owner in the scheme (with hopefully a lot owner who pays the body corporate levies).

Case Summary – The Body Corporate for the Anchorage One v Huang [2022] QDC 119

The Body Corporate for the Anchorage One (plaintiff) sought to recover unpaid levies for contributions. The defendant, Yue Huang, challenged the validity of the contributions, arguing they were determined in breach of the Act. The defendant also filed a counterclaim, alleging damages due to negligence, nuisance, and breaches of the body corporate’s duties. The Court found that if a Defendant wishes to claim a set-off due to an alleged shortcoming by the Body Corporate, the opposing claims wouldn’t stem from the same circumstances, and there wouldn’t be an adequate link between them to allow for a set-off.

The Role of Debt Collectors

In the world of body corporate debt recovery, debt collectors play a pivotal role in ensuring that outstanding levies are recovered in a timely and efficient manner. When lot owners default on their levies, the body corporate, after exhausting initial reminders and internal recovery processes, may decide to engage the services of a debt collector.

This decision is often driven by the need for a specialised approach to debt recovery, leveraging the expertise and resources that debt collection agencies possess.

Debt collectors, in this context, act as intermediaries between the body corporate and the defaulting lot owner. Their primary objective is to recover the outstanding amount while adhering to the legal and ethical standards set out in the Australian Consumer Law and the Debt Collection Guideline.

They employ a range of strategies, from sending formal demand letters to negotiating payment plans, always ensuring that the rights of the debtor are respected.

Engaging a debt collector can have several advantages for a body corporate.

Firstly, it sends a clear message about the body corporate’s intent to recover the debt, often prompting defaulting lot owners to take immediate action.

Secondly, debt collectors have access to tools and databases that can assist in locating and communicating with debtors who might be evasive.

Lastly, by outsourcing this task, the body corporate can focus on its core responsibilities, ensuring the smooth functioning of the community.

However, it’s essential for bodies corporate to be aware of the legal implications of engaging debt collectors.

The collection process must be transparent, fair, and free from harassment or undue pressure. Any deviation from these standards can lead to legal repercussions for both the debt collector and the body corporate.

Therefore, it’s crucial to choose a reputable debt collection agency that is well-versed in the nuances of body corporate debt recovery and the associated legal framework in Australia.

Recovery of Outstanding Body Corporate Levies

If you are on a body corporate committee, or you can make decisions on behalf of a body corporate, and you need to engage a commercial debt recovery lawyer to recover outstanding body corporate levies, then you should give us a call.

Our lawyers have extensive experience in body corporate matters and debt recovery.

A body corporate in entitled to debt recovery costs reasonably incurred when collecting outstanding body corporate levies. Let us help you recover body corporate debt and overdue strata levies

Guidance on Handling Body Corporate Debt Recovery

For Bodies Corporate:

  1. Prioritise Clear Communication – Regularly update lot owners about their financial obligations, due dates, and any changes in levy amounts. Use multiple communication channels like emails, newsletters, and community meetings.
  2. Offer Flexible Payment Options – Recognize that lot owners might face financial hardships. Offer instalment plans, online payment options, or temporary relief for those in genuine distress.
  3. Implement Early Warning Systems – Use accounting software to set up automated reminders for upcoming and overdue payments. This proactive approach can prevent many debts from escalating.
  4. Seek Mediation Before Litigation – Before taking legal action, consider mediation or conciliation. It’s less confrontational and can lead to amicable solutions.
  5. Continuous Education – Organize regular financial education sessions or workshops. Educate lot owners about the importance of timely payments and the implications of unpaid levies.

For Lot Owners:

  1. Understand Your Financial Obligations – Regularly review the body corporate’s financial statements, budget forecasts, and levy schedules. If unsure, seek clarification.
  2. Set Up Automated Payments – Use banking apps or online platforms to set up automated transfers for levy payments, ensuring you never miss a due date.
  3. Communicate Financial Hardships – If facing financial difficulties, communicate with the body corporate management early on. They might offer flexible payment options or other forms of assistance.
  4. Dispute Resolutions – If you disagree with a levy amount or face unjust penalties, approach the body corporate for a resolution. Consider mediation if direct communication doesn’t yield results.
  5. Stay Updated with Community News – Attend community meetings, read newsletters, and engage with fellow lot owners. Being an active community member can provide insights into potential financial changes.

Debt recovery in the context of body corporates requires a balanced approach, respecting the rights and responsibilities of all parties involved. By adhering to these guidelines, both bodies corporate and lot owners can navigate financial challenges effectively, ensuring community stability and harmony.

Deferred Fees Available*

At Stonegate Legal we are so confident with our abilities, we offer a deferred fee service. This means that the body corporate does not pay us anything until we recover the debt, and then we will likely recover those fees directly from the lot owner. *subject to T&C.

Unpaid Body Corporate Levy FAQ

We get asked a lot of questions from body corporate managers or committees.  Here are a few frequensly asked questions.

What is a levy in body corporate?

Body corporate levies are levies which include costs for manager fees, cleaning costs of common property, electricity on common property, exterior & interior painting, gardening and landscaping costs, insurance, gate and/or lift and/or intercom maintenance, onsite manager fees, costs of operating the pool, road maintenance & refurbishment.  The most common are the administrative fund levies and the sinking fund levies.

How do we recover unpaid body corporate levies?

Once engaged, a body corporate levy recovery lawyer will commence the legal process of recovering outstanding body corporate levies.  This is done in the following way:

  1. Issuing the lot owner debtor with a letter of demand;
  2. Commencing legal action in the Court with jurisdiction;
  3. Negotiating a settlement or compromise;
  4. Obtaining a judgment or enforceable money order;
  5. Enforce that judgment or Court order.

What happens if you don’t pay body corporate fees Qld?

An owner will likely be sued for the levies and obtain a judgment or enforceable money order. There are a number of ways to enforce a judgment or money order against a lot owner. The most obvious being an enforcement warrant for seizure and sale of the real property contained in the lot.

If the judgment debtor is a person, then the body corporate might consider bankruptcy as an enforcement option, or an alternative enforcement warrant to collect outstanding body corporate levies.

If the judgment debtor is a company then the body corporate should consider issuing the judgment debtor with a creditor’s statutory demand and commence winding up proceedings to recover outstanding body corporate levies by putting the company into liquidation.

What are levies in arrears?

Levies in arrears are the body corporate levies for the administrative fund levies and the sinking fund levies which have not been paid.

Can an owner withhold levies?

No.  If lot owners do not pay their levies and contributions, then the body corporate are required to start the debt collection for unpaid levies.

What are Body Corporate Levies?

Body corporate levies are fees that lot owners are required to pay. These levies cover costs for manager fees, cleaning of common property, electricity on common property, maintenance tasks like painting, gardening, and landscaping, insurance, and other amenities like gate, lift, and pool maintenance. There are different types of levies, including administrative fund levies, sinking fund levies, insurance levies, special levies, and exclusive use levies.

Why is it important for lot owners to pay their levies?

If lot owners do not pay their levies, the body corporate may not have the necessary funds to complete essential works and maintenance. This can affect the body corporate, other lot owners, and residents. Non-payment can also lead to legal repercussions for the defaulting lot owner.

What is ‘Body Corporate Debt’?

‘Body Corporate Debt’ refers to the amount owed by a lot owner to the body corporate. This can include contributions or instalments, penalties for late payments, and other amounts associated with the ownership of a lot, such as fees for exclusive use areas or services arranged by the body corporate.

What are the implications for lot owners who have outstanding debts?

Lot owners with outstanding debts can face legal actions, lose their voting rights in general meetings, become ineligible for committee positions, and incur interest and additional costs on their unpaid debts.

How does the Body Corporate Debt Collection Process work?

The process involves setting contributions, giving notices of contribution payable, and if a lot owner is in arrears, serving an arrears notice. If these steps are completed and the debt remains unpaid, the body corporate may need to engage a body corporate levy recovery lawyer to initiate the legal process of recovering the outstanding levies.

What steps are involved in the Body Corporate Levy Recovery Process?

The process includes issuing a letter of demand, commencing legal action, negotiating a settlement, obtaining a judgment or enforceable money order, and enforcing that judgment or order.

What happens if a lot owner doesn’t pay body corporate fees in Queensland?

The body corporate can take legal action to recover the unpaid levies. This can involve obtaining an enforcement warrant for the seizure and sale of the lot owner’s property. If the debtor is an individual, bankruptcy might be considered, and if the debtor is a company, winding up proceedings might be initiated.

Can the Body Corporate charge interest on late levies?

Yes, the Body Corporate can charge interest if they have decided by Ordinary Resolution to apply penalties to levies not paid by the due date. The penalty can be set at a rate of no more than 2.5% for each month the levy is in arrears (30% per annum) and is simple interest, not compounding interest.

How does the Body Corporate offer discounts on levies?

The Body Corporate may decide by Ordinary Resolution to apply discounts to levies that are paid by the due date. A discount must be set at a rate of no more than 20% of the amount of the levy instalment and must be shown on the levy notice.

Can a lot owner be prevented from voting or being elected to the Body Corporate Committee due to an outstanding debt?

Yes, a lot owner cannot vote at a general meeting or be elected to the Body Corporate Committee if they owe a debt to the Body Corporate. This debt can be a contribution, a penalty for late payment, or another amount associated with lot ownership, such as an invoice for an exclusive use by-law or payment for an agreed service supplied by the Body Corporate.

Is there a time limit for the Body Corporate to recover outstanding levies?

Yes, the Body Corporate can attempt to recover an outstanding debt within 6 years from the contribution becoming outstanding.

Can the Body Corporate waive levies for lot owners?

No, the Body Corporate does not have the authority to waive levies. However, the legislation provides that the Body Corporate ‘may allow a discount, or waive the penalty or recovery costs in whole or part’ if there are special reasons, such as illness or financial hardship.

How does Stonegate Legal assist in the recovery of outstanding body corporate levies?

Stonegate Legal offers expertise in body corporate matters and debt recovery. They can assist in the entire process, from issuing letters of demand to enforcing judgments, ensuring that bodies corporate recover their outstanding levies.

Contact us today for a free chat about our deferred-fee payment options.

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