Each lot owner must pay a share of body corporate expenses (i.e. owner contributions). Bodies corporate budget for expenses and then levy each lot owner for the money they need to meet those expenses.
Bodies corporate should ensure money they receive is paid into an account.
Read more about budgets and bank accounts for bodies corporate with a CMS registered at Titles Queensland.
Bank accounts for bodies corporate
To receive payments, a body corporate must have an account at a financial institution such as a:
- bank
- building society
- credit union.
The body corporate may also invest funds in the same way a trustee may invest trust funds.
Read more about the body corporate’s statement of accounts.
How contributions are decided
For subsidiary and higher-level bodies corporate, contributions can only be set by a motion at a general meeting. A committee cannot decide about setting contributions.
Contributions payable to a subsidiary body corporate
A body corporate under the Building Units and Group Titles Act 1980 must collect money from owners each year to meet any anticipated expenses.
The amount each owner pays is proportionate to the lot entitlements.
Owner's contributions
Each lot owner must pay a share of body corporate expenses (i.e. owner contributions). The contributions are based on anticipated spending by the body corporate.
There are 3 types of contributions:
- administrative fund contributions
- sinking fund contributions
- special contributions.
Administrative fund contributions
The body corporate must keep an administrative fund.
Contributions should be raised for anticipated administrative expenses including:
- regular maintenance of common property, fittings, fixtures and other body corporate property
- insurance premiums
- anything else that is not covered in the sinking fund.
When these contributions are paid, they should be credited to the administrative fund of the body corporate.
Administrative contributions can only be set for 12-month periods. Usually, they will be set at a general meeting each year.
Sinking fund contributions
The body corporate must keep a sinking fund.
Contributions should be raised for anticipated expenses including:
- purchasing any personal property
- improving the common property
- renewing or replacing parts of the common property, fittings and fixtures
- painting or treating any part of a common property structure, or other improvements that preserve the appearance of the common property.
When these contributions are paid, they should be credited to the sinking fund of the body corporate.
Special contributions
If the body corporate does not have enough to pay for something, it will need to raise the money by levying an extra contribution on owners. This is usually called a special contribution.
Disputing contributions
If you (as an owner) believe the proposed contributions are incorrect or unreasonable, you can vote against any motion to approve the contributions.
You may also submit a motion to adopt a new budget at a general meeting.
You may be able to apply for dispute resolution if you have evidence the contributions have not been set according to the legislation.
If you do not pay your contributions, the body corporate may take legal action to recover the debt.
Levy notice
The body corporate can give a levy notice to the lot owner once the levies are decided.
The levy notice should include:
- the due date
- any discount that might apply if paid within 30 days of the due date.
Discounts
The body corporate can use discounts to encourage owners to pay contributions by the due date. The body corporate must decide at a general meeting to give discounts.
A body corporate can give an owner a discount if their contribution is paid within 30 days of the due date. The discount cannot be more than 20% of the instalment amount.
Unpaid contributions
If a contribution is not paid by 30 days after the due date, the body corporate can start recovering it as a debt.
If a debt has been overdue for 2 years and 30 days, the body corporate must start debt recovery within 2 months after that period. Once a debt has been overdue for 2 years and 30 days, the body corporate has 2 months left to start debt recovery.
However, the body corporate can start debt recovery earlier.
Debt recovery
The body corporate can lodge a debt dispute claim with a referee. However, a referee can’t make orders for a debt dispute above $1,000.
The body corporate may be able to lodge a debt dispute claim with:
or
Contributions payable to a higher-level body corporate
Subsidiary bodies corporate may need to pay contributions to higher-level bodies corporate.
The amount each subsidiary pays is proportionate to the lot entitlements in the higher body corporate.
Principal or primary throughfare body corporate
Setting levies
A body corporate under the Integrated Resort Development Act 1987 and Sanctuary Cove Resort Act 1985 must determine contributions that will cover what it needs to pay for:
- insurance
- maintenance
- any other liability.
Unpaid contributions
The body corporate may charge up to 10% more of the total contribution if it is:
- paid more than 30 days after the due date
and
- passed by special resolution.
Outstanding contributions can be recovered as a debt in a court of competent jurisdiction.
Community or precinct body corporate
Setting levies
A body corporate under the Mixed Use Development Act 1993 must determine contributions that will cover what it needs to pay for:
- insurance
- maintenance
- any other liability.
If the body corporate needs to pay for something it does not have enough money for, it will need to raise the money by levying an extra contribution.
Outstanding levies
The body corporate may charge up to 10% more of the total contributions, but only if passed by comprehensive resolution.
Outstanding contributions can be recovered as a debt in a court of competent jurisdiction.
Offset arrangements
Offsetting in a body corporate is when someone does something that lessens (or ‘offsets’) a debt.
Someone could offset their outstanding contribution by mowing the common property lawns. Instead of being paid, the amount they owe the body corporate is reduced.
A contribution is paid—in part or full—if the person paying a contribution has an approved offset arrangement with the body corporate.
An offset arrangement can only be approved:
- by a general meeting motion
- if the offset is for the fair value of land, goods or services provided.
