How often are you required to pay Body Corporate levies, and what happens if you don’t pay on time?
Owning a property in a Strata complex means that when you buy into this situation, you’re making a commitment to make Body Corporate levy payments on time, so that essential administrative and maintenance work can be undertaken, and the value of your investment maintained. You have no choice.
Administration of Body Corporate levy payments
So let’s address who’s responsible for what.
As discussed in detail in our earlier article What Happens to the Money You Pay for Body Corporate Fees, your Scheme’s budget is determined by the Body Corporate Committee (not your Body Corporate Manager) and presented at the Annual General Meeting each year for approval by lot owners.
Once approved, the levies are paid to the Body Corporate account. In many cases the levies are collected by the Body Corporate Manager on their invoicing system on behalf of the Body Corporate.
A well organised Body Corporate Manager will provide new lot owners with the a “welcome pack” which outlines the Body Corporate policy on payment of levies, and provide a range of options to make payment easy.
At Tower Body Corporate We make it easy by providing every Lot Owner with online access to Strata Pay through our website.
How do you know how much you need to pay, and when?
In Qld, the law states that the Body Corporate must give each Lot Owner written notice of the contributions they owe. This notice must be given at least 30 days before a contribution is due.
The contribution notice must include:
- The amount owing
- The due date
- Any discount that can apply
- Any penalty if the payment is overdue
- Any previous payments that are overdue.
At Tower Body Corporate we take care of this for all the Schemes we manage, so that every Lot Owner has plenty of advanced notice.
Depending on the financial structure of your Body Corporate, levy periods and amounts are listed in the AGM minutes, and levy notices will be issued 2, 3, or 4 times a year and are usually due on the first day of the levy period.
How do you pay?
We make it easy by providing every Lot Owner with online access to Strata Pay through our website. Lot owners are provided with a unique code, and after login can choose to pay up to 8 different ways.
Full financial records and BC meeting minutes, can be accessed by Lot Owners at any time through our online access to Strata Max.
What happens if you don’t pay on time?
It’s important that levies are paid on time, so that the Body Corporate can continue to fulfil statutory requirements, undertake necessary maintenance work and pay its bills on time.
Lot owners who are in arrears will receive a reminder letter from us, and then maybe a second reminder letter, then a final letter of demand.
We also understand that sometimes there are circumstances that prevent the Lot Owner from paying on time, so a courtesy phone call will be made to try and understand why the lot owner has not paid the levies.
Are there financial penalties?
Yes there are. In addition to the outstanding levies, you may also receive a 30% simple interest per annum charge. The legislation specifically allows the Body Corporate to charge this to each and every levy that’s outstanding. This can very quickly mount up if it’s applied on a monthly basis, to each over due levy payment.
Can a Body Corporate take legal action for overdue fees?
Yes it can, and has up to three and half years to commence recovery of outstanding levies. Note: In October 2017 it was ruled by a Queensland District Court Judge that a body corporate must commence legal recovery of outstanding levies within two years and two months, however an appeal by the District Court in July 2018 saw this overturned by the Court of Appeal, so that Bodies Corporate have up to three and a half years to commence recover.
In addition, that individual lot owner will become responsible for all the costs, including the Body Corporate Manager’s cost relating to expenses and outlays, and any expenses and outlays of the Body Corporate, including any legal fees.
How we can help
We take overdue levy payments very seriously at Tower Body Corporate, because it affects all Lot Owners, in many ways. Body Corporates are like not-for-profit organisations – the levies are the only form of finance available to fund necessary expenses.
- The process and body corporate debt recovery systems we use have proven to be consistently effective in recovering overdue levies.
- Many of our clients have told us of the positive change in financial circumstances that our team has made within the first few months of taking over body corporate management of their building.
- Body corporate fee recovery is governed by strict legislation, and our processes and systems are fully compliant with requirements.
Contact Tower Body Corporate today for a confidential discussion about the financial administration of your Scheme Or for other body corporate services in Gold Coast & Brisbane. We’d be happy to help.