PRACTICAL
RELIABLE
PROMPT
PRACTICAL
RELIABLE
PROMPT
RECOVERING UNPAID BODY CORPORATE LEVIES
1 August 2020 at 4:30:00 am
As the economic effects of covid-19 set in, debt is on the rise. Strata schemes are not immune rising debts and as body corporate levy notices begin to pile up, many are wondering what to do.
REQUIREMENT TO PAY LEVIES
A body corporate for a strata scheme must fix contributions to be levied on each lot owner for the financial year. These levies must be based on the administrative and sinking budgets.
The body corporate must give notice to each lot owner of the required contribution.
Under the Queensland Government’s covid-19 measures, the body corporate may decide to extend the due date for a payment of a contribution. Extension must not be beyond the last date of that strata schemes financial year.
PENALTIES FOR LATE PAYMENT
For schemes covered by the Body Corporate and Community Management Act 1997, the body corporate may pass an ordinary resolution to fix a penalty for late payment of contributions. The penalty must be interest at a rate of 2.5% or less of the contributions per month.
Under the Queensland Government’s covid-19 measures, no penalty interest can be charged from 25 March 2020 to 31 December 2020.
ENFORCING PAYMENT CONTRIBUTIONS
If a contribution is not paid by the due date, the body corporate may recover that amount as a debt, including through the use of legal proceedings.
For schemes covered by the Body Corporate and Community Management Act 1997, if the debt of a lot owner has been outstanding for two years, then the body corporate has a duty to begin legal proceedings to recover the debt within two months. This does not prevent legal proceedings being brought after this two-month period.
Under the Queensland Government’s covid-19 measures, if the two-month period in which the body corporate is required to begin proceedings falls between 25 March 2020 and 31 December, then the body corporate is not required to begin proceedings until the period beginning on 1 January 2021 to 28 February 2021. Despite this, a body corporate may still decide to bring proceedings at any time.
If you require further information, please contact Frews Solicitors on (07) 3868 2244.
Frews Solicitors communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication.