It’s no surprise, given we’re talking about dollars and cents, that issues about body corporate levies and debt recovery are commonplace. We’ve attempted to compile some of the more frequently asked questions below, with answers. As always, it is not legal advice and is provided as a guide only.

Q1. I am 2 months late with my body corporate levies. Can the body corporate charge me interest?

Yes. The body corporate may decide, by ordinary resolution, to apply penalties to levies if they are not paid by the due date. A penalty must be at a set rate of no more than 2.5% for each month the levy is in arrears. Any penalty amount that has been adopted by the body corporate must be stated in the contribution notice that is sent out at least 30 days before the amount is due.

Q2. How does the body corporate apply a discount to lot owners’ levies? If we all pay on time and everyone gets a discount we won’t have enough money to cover expenses.

Similar to the previous question, the body corporate may decide, by ordinary resolution, to apply discounts to levies that are paid early. A discount must be at a set rate of no more than 20% of the amount of the instalment and must be stated in the levy notice, the same as a penalty amount. In the event that the body corporate does not have enough funds to cover a certain expense, a special levy can be raised by ordinary resolution. A special levy is a one-off payment (though it can be paid in instalments) which is raised by the body corporate to cover a certain expense that was either not anticipated, or was not adequately budgeted for

Q3. I agreed for the body corporate to arrange for gutter cleaning on my behalf. I pay separately from my normal body corporate levies but I forgot to pay the last instalment. They are saying I cannot vote at the AGM and cannot be elected to the committee. Is that correct?

The legislation provides the following definition for body corporate debt:

body corporate debt means a following amount owed by an owner of a lot to the body corporate—

          (a) a contribution or instalment of a contribution;

          (b) a penalty for not paying a contribution or 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

Missing a payment for an agreed service supplied by the body corporate, such a gutter cleaning, means that a person owes a body corporate debt. A person who owes a body corporate debt does not have the right to vote at a general meeting and is also ineligible to be a committee member.

Q4. The owner of lot 5 is 3 years in arrears with his body corporate levies. Can the body corporate still attempt to recover the debt?

Yes. From the date that a contribution becomes outstanding, the body corporate has 6 years to commence debt recovery proceedings. This is in line with the Limitations of Actions Act 1974 and was confirmed in a Court of Appeal decision in 2018 (BC for Mount Saint John Industrial Park CTS v Superior Stairs & Joinery Pty Ltd [2017] QCA 173).

Q5. I am off work having treatment for a serious illness. I have not been paying my body corporate levies. In fact I am behind in all my bills and suffering financial hardship. Can the body corporate waive my levies?

The body corporate does not have the authority to waive your levies. The legislation provides that the body corporate “may allow discount, or waive the penalty or recovery costs in whole or part” if satisfied there are special reasons. This may for situations such as illness or financial hardship.

Q6. I have asked the body corporate to waive the penalty interest and recovery costs on my late body corporate levies. My spouse has just passed away and I just need a few months breathing space. The committee has said no. Can I dispute that decision through the Office of the Commissioner for Body Corporate and Community Management (BCCM) as I feel they are not being reasonable?

As with the previous question, it may be reasonable for the body corporate to waive penalty amounts and/or recovery costs in the event of a family death. If the body corporate makes a decision that an owner considers to be unreasonable, that owner can apply for conciliation through the BCCM. However, if debt recovery action has been started in a court (such as the Queensland Civil and Administrative Tribunal), the dispute cannot be conciliated. If debt recovery action is started after a conciliation application is lodged, the conciliation application must end.

Q7. The body corporate says I am behind $500 on my levies. I do not agree. Can I lodge a dispute application through BCCM?

Yes. An owner can apply for conciliation through BCCM to determine a dispute about a debt. However, if debt recovery action has been started in a court (such as the Queensland Civil and Administrative Tribunal), the dispute cannot be conciliated. If debt recovery action is started after a conciliation application is lodged, the conciliation application must end.

Q8. I am a new owner. The body corporate held a general meeting and set a special levy after I received the information certificate about fees but before settlement of the lot. Do I have to pay the special levy even though I knew nothing about it when I purchased?

A body corporate debt attaches to the lot. The liability for a body corporate debt is enforceable jointly and severally against a person who was the owner of the lot at the time the debt became payable and a person who becomes the owner of the lot before the debt is paid. It is important for people wanting to purchase a lot in a community titles scheme to do appropriate searches before they settle on the property. This may include searching minutes of previous meetings which occurred from the time between the signing of the contract and the settlement of the contract. You may wish to obtain independent legal advice regarding your specific circumstances.

For further information please contact the Information and Community Engagement Unit of my Office on 1800 060 119 or visit our website www.qld.gov.au/bodycorporate.