Top 4 Tips to Reducing Levy Arrears in Body Corporate Communities - Queensland - SSKB - Strata Managers | Community Experts

Top 4 Tips to Reducing Levy Arrears in Body Corporate Communities – Queensland

Top 4 tips to Reducing Levy Arrears in Owners Corporation Communities - Queensland

Living in a Body Corporate is all about sharing – sharing common property facilities as well as sharing physical infrastructure.

Something else which is shared are the associated costs in keeping the building compliant with its legal and statutory requirements, as well as ensuring the property and facilities are kept in good order.

After all, it’s more than investment – it’s also a home.

That’s why everyone has to pay their fair share.

That takes the form of levies which provides regular cashflow to meet these expenses.

Failure to collect all the levies due, or to budget incorrectly for expenses means basic maintenance and repairs suffer. That presents a health and safety risk, as well as devaluing property.

SSKB understands how important it is to have regular cashflow to meet these expenses. Our arrears team is on hand to discuss issues with Lot Owners and to liaise with Committees on effective recovery procedures.

Here are our four proven strategies that encourage prompt payment and reduce the amount of levies in arrears:

  1. Discounts:

    Body Corporate may decide to offer an early payment discount. Many of our buildings have found that a 20% discount is an effective incentive.

    Having those levies paid means there's money for maintenance and repairs, SSKB gives top strategies for managing levy arrears
    Having those levies paid means there’s money for maintenance and repairs, SSKB gives top strategies for managing levy arrears
  2. Interest on Late Payments:

    A community may resolve at a general meeting to charge interest on late payments. Penalty interest (simple interest) on unpaid contributions is charged in accordance with the Regulations, which may an amount up to 30% per annum or 2.5% per month.

  3. Process and Policy:

    SSKB recommends all Body Corporates adopt the following processes for late or unpaid contributions. Once the process is adopted, SSKB will follow it on behalf of the Body Corporate:

    • First Notice – Reminder Notice: Fourteen days after the due date for contributions.
    • Second Notice – Overdue Notice: Seven days following the first reminder notice
    • Penalty Interest: If non-payment continues and penalty interest is applicable, this will be applied to the lot owner’s account on the 1st day of the following month after the due date and will appear on the lot ledger and future notices issued. Interest is only applicable on levy amounts and not on “other” amounts such as arrears levies, or interest.
    • Third Notice Letter of Demand: Fourteen days following the issue of the Overdue Notice
    • Non-Payment of Letter Of Demand: Following the issue of a Letter of Demand, if there is still no payment or contact by the owner, time is spent in trying to contact or locate the owner and recover the outstanding amount and costs. This action forms part of the levy charged for the Letter of Demand.
    • Legal Action: The first two notices and letter of demand will be issued by SSKB on behalf of the Body Corporate in accordance with the policy adopted to recover outstanding contributions. If the action taken has not resulted in payment of the account and contact with the owner has been unsuccessful, then further instructions to proceed with legal action to lodge a Claim and Statement of Claim will be sought from the Body Corporate.
  4. Payment Plans:

    Reasons for non-payment of contributions are many and varied. When a lot owner contacts SSKB Levy Management team with a payment plan proposal, this is forwarded to the Committee to seek instructions. Owners are requested to formalise their offer in writing to set out amounts and timing of payments proposed. The Body Corporate may also resolve to adopt a formal policy in relation to Discount Applications and Payment Plans.

SSKB is Australia’s leading strata management company specialising delivering expert advice and management to Body Corporate and Owners Corporation communities.

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Recent Comments


ietje verlegh On September 20, 2018 | Reply

We had a Committee Member who was behind in paying levies for 120 days.
I believe one should not be allowed to be a Committee Member, who makes decisions for owners, if one is not up to date with payment.
I trust that new legislation will correct this anomaly in the near future.

    SSKB On September 24, 2018 | Reply

    Hello Ietje,

    The Body Corporate and Community Management Act (BCCMA) Legislation regulates the financial status of Committee members at the time of nomination and election, where they and the nominator must be financial at those times, however, the Committee and the Community Manager / Body Corporate Manager regulate the Levy Arrears process throughout the year. I have assumed your Body Corporate is registered under the BCCMA Legislation, if it is not, please do give us the opportunity to address that scenario.

    The update to the BCCMA legislation is work in process and we too are uncertain of what these amendments will be, or when this may become law.

    Regardless of the Committee position on outstanding levies, the current BCCMA requires any debt collection process to have commenced within 2 years of the due date of a levy, otherwise, case precedence proves that the Body Corporate may not be entitled to recover that outstanding levy.

    We hope this has answered your query.

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