A Queensland District Court Judge has recently ruled that a body corporate must commence legal recovery of outstanding levies within two years and two months, otherwise the body corporate will miss the opportunity to legally recover that debt from the lot owner.

“If the amount of a contribution or contribution instalment has been outstanding for 2 years, the body corporate must, within 2 months from the end of the 2-year period, start proceedings to recover the amount.”

If levy arrears are a problem in your scheme, ask your Body Corporate Manager for a monthly arrears update. Ask them for their opinion on the recommended course of action, for example, the time-frames between Reminder Letters, Final Notices and clarification on the level recovery process from the issue of the first Letter of Demand to Statement of Claim to Judgement (and beyond). A solicitor will be able to provide detailed information on the legal recovery process and time-frames.

In some cases, a payment plan is the best option for an owner however there should be a set time-frame for the repayment of outstanding levies (e.g. 6-12 months, depending on the amount overdue) and provision for the payment of new levies that arise as well. In other cases, it may be too late to implement a payment plan and legal recovery may be the only avenue for a body corporate to adopt.

Work with your Body Corporate Manager to devise the most suitable plan for owners in your scheme with outstanding levies. One of the schemes that I managed had over $40,000.00 in arrears at one stage and within a year, we managed to reduce this to under $1,000.00. This was achieved with a combination of phone calls, reminders, payment plans and legal recovery - and above all regular contact and dedication from my committee.

The best way to manage arrears is by implementing a debt recovery plan for your body corporate and monitoring your levy contributions carefully. Remember that every scheme is different and each lot owner experiences different circumstances. There are cases of genuine hardship and in such cases I strongly encourage lot owners to communicate with your Body Corporate Manager and Committee. Don't hide away - this will only worsen the problem. Open up, tell us what is going on as we, in addition to your committee may be able to help.