Each lot owner must pay a share of body corporate expenses (i.e. owner contributions). Bodies corporate budget for expenses and then levy each owner in the scheme for the money they need to meet those expenses.
The following information is relevant to schemes registered under the:
- Standard Module
- Accommodation Module
- Small Schemes Module
- Commercial Module.
See owner contributions for two-lot schemes for schemes registered under the Specified Two-lot Schemes Module.
How contributions are decided
The annual levies that lot owners must pay each year are decided at each annual general meeting. At that meeting the body corporate must, by ordinary resolution:
- agree on administrative and sinking fund budgets for the financial year
- work out, based on the agreed budgets, the amount that each lot must pay
- decide the number of instalments the levies must be paid in
- set the date when each instalment is due.
Additional levies, known as a special contribution, must be collected by the body corporate if it has to pay for unexpected costs during the financial year. These can be costs that were either not included in the budget or not enough money was set aside to meet them.
For example, if the cost of painting common property is more than the amount allocated in the sinking fund budget for the work, the body corporate can decide to collect a special contribution from owners to meet the extra cost.
To agree to collect a special contribution, the body corporate must pass an ordinary resolution.
The committee may fix an interim contribution for either the administrative or sinking fund levies.
An interim contribution helps the body corporate meet a shortfall in monies until new levies are set or received from 1 financial year to the next.
Interim contributions are calculated on the basis of contributions that were set for the previous financial year.
If an interim contribution is levied it must be offset against the relevant budget as decided at next general meeting.
The contributions levied on the owner of each lot must be based on the contribution schedule lot entitlements, unless the legislation says otherwise.
The contribution schedule lot entitlements are listed in the community management statement recorded for the scheme.
The body corporate must give each 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.
Discounts and penalties
The body corporate can use discounts and late payment penalties to encourage owners to pay contributions by the due date. The body corporate must decide by ordinary resolution to give discounts and charge penalties.
A discount may be given to an owner if their contribution is paid to the body corporate by the due date. The discount cannot be more than 20% of the instalment amount.
An owner can be charged a penalty if their contribution is not paid to the body corporate by the due date. The penalty will be simple interest at a set rate (not more than 2.5%) for each month that the contributions are overdue.
Even if a payment is late, the body corporate can decide to allow the discount or not charge the penalty, in full or in part, if there are special reasons.
If a 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 must start debt recovery within 2 months of that date. This does not stop the body corporate from starting debt recovery earlier.
The body corporate can lodge a debt dispute claim with:
- the Queensland Civil and Administrative Review Tribunal (QCAT)—called a minor civil dispute
A debt dispute or a related debt dispute cannot be decided by an adjudicator.
The body corporate or an owner can apply for conciliation through the Office of the Commissioner for Body Corporate and Community Management to determine a dispute about a debt.
However, if debt recovery action has been started in the QCAT or a court, the dispute cannot be conciliated. If debt recovery action is started after a conciliation application is lodged, the conciliation application must end.
For more information see:
- practice direction 24
- section 229A of the Body Corporate and Community Management Act 1997
- the Queensland Civil and Administrative Tribunal Act 2009.