Legal update: Body Corporate special levies for flood damage

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The body corporate has a statutory duty to maintain the common property in good condition. Where units are part of a building format plan of subdivision, this obligation extends to:

• foundation structures;
• roofing structures/membranes providing protection;
• essential supporting framework, including load-bearing walls;
• railings, parapets and balustrades on the boundary of a lot and common property; and
• doors, windows and associated fittings situated in a boundary wall separating a lot from common property;

(Body Corporate and Community Management (Standard Module) Regulation 2008, section 159).

While the cost of repairing these flood damaged areas may not greatly impact those in established complexes with healthy sinking funds, those that are part of new schemes may be faced with the imposition of special levies to cover the bill.

These special levies will require a majority of owners to vote in favour of the motion. If the majority of owners vote against the body corporate performing this work, owners in favour of the motion will need to lodge an application with the Body Corporate and Community Management Office. In Queensland, an adjudicator has the power to overturn a body corporate vote on the basis that the outcome of the vote was unreasonable.

Once a special levy is imposed, owners must ensure that they pay the contribution by the date for payment specified in the notice. Failure to do so may lead to the imposition of penalty interest at a rate of up to 30% per annum being imposed on the contribution arrears.

Owners who cannot afford to pay the levy are in a precarious position. Initially, owners should approach the body corporate and seek an extension of time. If this extension is not granted and penalty interest is accruing, owners should seek urgent independent financial and legal advice.

For further information please contact:

Michael Byrom
Partner, Brisbane
T: + 61 (0)7 3135 0616
E: This e-mail address is being protected from spambots. You need JavaScript enabled to view it

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