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Body corporate levies are crucial for the maintenance and management of common property in strata schemes. They cover expenses such as cleaning, gardening, insurance, and repairs, ensuring that the communal areas and facilities, and the building as a whole, remain in good condition.

However, unforeseen financial difficulties can make it challenging to meet these obligations. If you find yourself unable to pay your body corporate levies, here are some steps to take and information to consider.

Do I need to pay my levies?

Paying body corporate levies is mandatory for all property owners within a strata scheme. The obligation to pay levies is under the Body Corporate and Community Management Act 1997, so there is no ability to waive or reduce an owner’s debt. 

Levies are essential for funding the maintenance, repairs, and management of shared facilities and common areas, ensuring the property remains in good condition and meets regulatory standards.  

By paying your levies on time, you contribute to the overall upkeep and value of the property, benefiting all owners and residents. Failing to pay levies can result in penalties, legal action, and additional costs. 

Debt recovery procedures

If your contribution is not paid by the due date, the body corporate can start debt recovery action to recover the amount.  

If a debt has been overdue for 2 years, the body corporate is legally compelled to start debt recovery within 2 months of that date, if not earlier. 

Debt Recovery Actions:

The body corporate can lodge a debt dispute claim with the Queensland Civil and Administrative Tribunal (QCAT) or the courts. They can also claim reasonable costs for recovering the outstanding contributions, including legal fees, penalty interest incurred and fees for issuing arrears notices.

What if I’m having difficulty paying my levies?

1. Communicate with the body corporate

The first and most important step is to communicate with your body corporate or body corporate manager as soon as possible.

Inform them of your financial difficulties and express your willingness to resolve the situation. Early communication demonstrates your commitment and can lead to more understanding and cooperative solutions.

While the body corporate cannot waive or reduce the amount of levies owed, it may allow a further time period to pay or stall the recover process in some circumstances. 

2. Seek a payment plan

Many bodies corporate are willing to work with owners experiencing temporary financial difficulties. Request a payment plan that allows you to pay your levies in instalments. A well-structured payment plan can help you catch up on your arrears without putting excessive strain on your finances.

If your scheme is managed by BCsystems you can request a payment plan online.

Any payment plan must repay the debt in full, and usually a statutory interest rate will apply to any overdue portion of the levy amount. 

3. Review your financial situation

Take a close look at your financial situation to understand the extent of your difficulties. Identify all your income sources and essential expenses. This will help you determine how much you can realistically allocate towards your levies and create a plan to manage your finances more effectively.

As all of the body corporate’s costs typically rise each year with inflation, it is unlikely that levies will stay the same, or decrease, over time.

4. Explore financial assistance options and support

There may be government or community-based financial assistance programs available to help you during tough times. Research and apply for any grants, loans, or subsidies you might be eligible for. Non-profit organisations and charities might also offer support to individuals facing financial hardships.

Seek financial advice on repaying levies through the National Debt Helpline

5. Understand the consequences of non-payment

It’s important to be aware of the potential consequences for failing to pay your levies. The body corporate has the right to take legal action to recover unpaid levies, which could result in additional costs and legal fees. In extreme cases, they may obtain a judgment against you, leading to wage garnishment or a lien on your property.

In summary

Facing difficulties paying body corporate levies can be stressful, but proactive communication and a clear plan can help you manage the situation.

By seeking assistance, negotiating payment plans, and staying informed, you can navigate through financial hardships and maintain your property responsibilities. Remember, the key is to address the issue early and work collaboratively with your body corporate or body corporate manager to understand your obligations and payment options.

Reference: https://www.qld.gov.au/law/housing-and-neighbours/body-corporate/finance-insurance/fees/owners

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