What are body corporate levies?
The body corporate is funded entirely by its members (the lot owners). Legislation requires that each financial year the body corporate set budgets for each fund, and raise contributions from owners to meet that expenditure. These contributions from owners are the levies.
Most bodies corporate operate three distinct funds, the purpose of which is determined by the relevant regulation module.
The administration fund is intended to cover expenditure for maintenance of the common property and assets (e.g. garden maintenance, pool cleaning), as well as other items of recurrent expenditure (e.g. professional fees, electricity, pest control).
The body corporate is required to insure the common property for replacement value, public liability, and depending on the structure of the scheme, may also be required to insure the buildings on scheme land. The body corporate pays the insurance premium, and collects this premium from the owners by way of levies. Visit insurance for more information on body corporate insurance.
The sinking fund is a long-term fund designed to provide for the ongoing maintenance of the common property and body corporate assets. The sinking fund levies are set based on a projection of expenditure over at least 10 years, and this report is normally provided by an expert third party. The sinking fund balance will fluctuate as levies are paid in and capital works are undertaken, however the goal of the sinking fund is to avoid the need for owners to contribute additionally via special levies to the cost of anticipated works (like replacing the roof).
Who sets the body corporate levies?
At the annual general meeting (AGM) each year, the body corporate votes to accept budgets for each of the funds (prepared by, or in consultation with the committee), and set levies for the financial year based on those budgets.
The body corporate manager does not have input into the fixing of levies. The levies are paid to the body corporate account, but may be collected by the body corporate manager on their invoicing system on behalf of the body corporate.
Why do levies increase?
The body corporate is required to meet its expenditure and maintain currency in the funds. An increase in the cost of the insurance policy, or the gardener’s fees will result in an increase in the levies required from owners to meet those costs. Levies can often be reduced if the body corporate decides to forego services (e.g. the frequency of the gardener’s visits may be reduced to bring expenditure down).
What happens if an owner does not pay their levies?
The body corporate may charge interest on overdue levies and this interest is limited by the legislation to a maximum of 30% simple interest per annum.
The committee is responsible for overseeing levy payment and enforcing payment of body corporate levies. If levies remain unpaid for a time, the committee may commence debt recovery proceedings against that owner to recover the amount of the levies, any penalty for not paying the levies and any recovery costs reasonably incurred by the body corporate as a debt. If a contribution has been outstanding for a period of more than 2 years, the committee must commence debt recovery proceedings against the lot owner.
What steps does Capitol take to recover levy debts?
Capitol will automatically undertake several levy debt recovery steps prior to contacting the committee for instructions. This is authorised in the Capitol administration agreement.
- Initial levy notice (30 days before due date)
- Reminder levy notice (15 days after due date)
- First arrears notice (30 days after due date)
- Second arrears notice (45 days after due date)
- Letter of demand (60 days after due date) – sent by registered post with delivery receipt
If a levy debt remains unpaid after the letter of demand expires, Capitol will seek further instructions from the committee on how to proceed with collection action. This may include Capitol continuing to monitor until the next levy becomes overdue, or referral to a body corporate lawyer for recovery through the Queensland court system.
How can I pay my levies?
To check your levy balance, visit OWNER LOGIN and go the payments section. For full payment options, refer to your levy notice (invoice).
- Credit card payments can be made via OWNER LOGIN, however a surcharge does apply
- Capitol does not accept levy payments directly – payment can only be made using one of the options on your levy notice.
- Cash payments can only be made in person at Australia Post.
- All cheques must be made payable to the name of your body corporate.