Our system automatically issues an email and or TXT warning of an overdue payment every month.  There is no charge for this.  Additionally, the email is sent after the due date for the levy but before any penalty fees are applied (which is legislated as one month after the due date).  A lot owner who then pays in full before the penalty fee date will have not been hit with any additional payments.  Happy days!

Contrast this with a typical body corporate manager approach.  The notice is often issued only after the penalty fee date so usually they must pay both the penalty amount (2.5% of the outstanding levy) and an arrears notice fee (typically $39).  Usually, there can be confusion and the lot owner pays one of the amounts but not both or not quickly enough and a second penalty kicks in which spirals into additional arrears notice fees being issued.  Outcome – lot owner very unhappy – but a very happy body corporate manager who is earning arrears notice fee revenue for what many would consider an automated task.

Committee options

We recommend that a committee should consider a lot owner’s motion before an AGM notice is finalised and issued.
Lot owners generally look to the committee for guidance about lot owner sponsored motions so a communication to lot
owners from the committee is a useful initiative.

• The committee may have no relevant view on the motion. Lot owners can be advised that the committee has no view. This can be separately communicated, included in the AGM notice or both.
• The committee may form a view that the motion is likely to be ruled out of order by the presiding chairperson on the day of the AGM. The committee might choose to advise the lot owner and accept a motion resubmission that might enable the motion to not be ruled out of order.
• The committee may be significantly against the motion. Lot owners could be advised to vote NO, and the committee should give reasonable arguments as to why the motion should be voted down.
• The committee members may be split in their support for the motion. In this case, lot owners could be advised that the committee is in disagreement about the merits of the motion and has no guidance to give lot owners.
• The committee might be significantly in favour of the motion. The committee might choose to ask the lot
  owner to withdraw their motion so that the motion can be put to the AGM as a committee motion. The lot owner might want to see final wording of the committee motion before agreeing to withdraw.
• The committee might be significantly in favour of the motion provided that the motion wording is modified to address committee concerns. If the lot owner does not want to comply and does not withdraw their motion, the committee can put an alternate motion to the AGM that does address the committees’ concerns. Together, these motions are known as ‘a group of same motions’. This most commonly occurs when the lot owner motion is ‘an improvement to common property by a lot owner’. Usually, the lot owner is proposing a motion that is of direct benefit to themselves and usually no one else. When the project cost is more than
  $3,000 – the motion must be considered at a general meeting (and cannot be approved by the committee)

However, there are no body corporate policemen employed to check up on committees and their conformance. It is for concerned lot owners to hold committees to account by using the mechanisms provided within the legislation. Recourse to adjudication and conciliation through the BCCM commissioner’s office is the only lengthy pathway when lot owners do not agree with committee actions.

Scattered throughout the legislation are ‘penalties’ for developers, body corporate managers, committees, lot owners and lot occupiers. This could be for failing to perform certain tasks or failing to observe by-laws. It is possible, that an aggrieved party might succeed in obtaining an order that they must themselves enforce through the courts for a monetary penalty to be applied to the bad actor. With the exception of by-law enforcement by the committee against a lot owner or lot occupier, this outcome is rarely seen.

Committee members are volunteers who hopefully put the best interests of their scheme first before their own self interest. Our book, Queensland body corporate DIY – A handbook to self-management, can help committees on the straight and narrow.

The Act permits a maximum levy penalty rate of 2.5% per month and we recommend setting penalties at that maximum rate. The penalty must only be applied to a lot ledger one month after the levy falls due and payable. Since a levy must be issued one month in advance of the due date, there really is no excuse if payment is not made for two months. Our committees rarely get requests from lot owners for a penalty to be waived. If you were a Tracsafe client, you would have received a levy notice by both email and post (if wanted) ensuring two separate ways of communication. It is extremely unlikely that the levy was not received by the lot owner. Additionally, a reminder email is likely to have been sent advising that payment was overdue prior to the penalty being applied. Each month that the levy remains unpaid will incur further penalty. This is a strong mechanism to ensure lot owners pay their levies.

Discounts are best used when the money is neeed urgently; typically this is usually for a special levy for a major project with time constraints and where the body corporate has insufficient funds to proceed until the levy monies are receipted. The Act permits a maximum discount of 20% if the levy is paid in full on or before the due date. If you are just one day (not one month like a penalty) overdue – you do not get the discount. Unlike penalties, if you are overdue – you incur a large financial impact 20% vs 2.5%. Without penalties – once you miss the discount there is no further incentive to pay the levy. Because of these issues, committees come under a lot of pressure to consider discount relief from lot owners who missed the discount. This often causes unhappiness fro lot owners and difficulty for committees in making consistent decisions. Finally, the use of discounts on regular standard levies makes the financial statement and budget statements more complex than they need to be.

In summary, our advice is to always use penalties (at the maximum rate of 2.5% per month) on every levy. Do not use discounts on standard levies and only use discounts on special levies where the monies are needed as soon as possible because the body corporate has insufficient funds.

This process is not in accordance with the BCCM regulations and the body corporate treasurer correctly refused to pay the invoice.  The plumber and the lot owner were advised that the lot owner had no authority to contract the plumber in the name of the body corporate.

Electricity infrastructure is not body corporate common property.  The better cause of action for a hot water fault, if water is still running, is for the lot owner to call an electrician.  They would have identified the issue much quicker and could have taken some urgent temporary action until Energex were called to fix their fault.  Energex will reimburse a contractor call out where the issue was an Energex fault.

If the lot owner is unsuccessful in claiming the reimbursement from Energex, the committee could consider a motion for reimbursement of the lot owner for the expense.  However, it should be noted that the electricity infrastructure is not body corporate common property.  If other lots were affected by the issue, the other lot owners might choose to unilaterally directly contribute to any out-of-pocket expenses of the lot owner.

• Will my pet be allowed on the property?
• Will the body corporate permit my home business?

The answer that we recommend that the committee make is –

Owners and occupiers are required to conform to council regulations.  Most councils have laws in regard to pet and business permits.  Additionally, owners and occupiers of our scheme are obligated to abide by the scheme by-laws that are set out in the scheme’s community management statement.  The body corporate does not preclude enforcing those by-laws or making any necessary change to those by-laws to ensure the peaceful enjoyment of the scheme by all lot owners.

In these situations, our advice is to follow one or more of the following options –

• Seek additional advice from the BCCM help line or a lawyer skilled in body corporate matters.
• Raise the issue(s) for debate and discussion with attendees at the AGM before the motion is voted.
• Propose an amendment to the motion that satisfies your concerns.
• Ask the chairperson to rule the motion as out-of-order on the basis of unreasonableness.
• Vote against the motion and through the debate process, encourage others to follow your lead.
• Raise a dispute with the BCCM Commissioner’s office if the motion is passed and you consider the decision or the decision process as unreasonable.

All decisions of a body corporate are required to be reasonable.  This means, all circumstances surrounding a decision must be considered.  Lot owners are entitled to expect sufficient information to have been provided to enable them to make an informed decision.  The information provided, and the decision they subsequently make, should reflect what an ordinary person would consider as reasonable.