This article about recovering body corporate costs from owners has been supplied by Todd Garsden, Mahoneys.
Aside from the recovery of levies, the Body Corporate and Community Management Act 1997 (Qld) (BCCMA) gives bodies corporate a number of specific protections to allow costs to be recovered from owners who have:
- Failed to comply with their obligations where the body corporate has been required to step in (for example, when the body corporate is required to repair plumbing in someone’s lot); or
- Caused damage to other parts of the scheme (for example, a tree in a backyard where the roots are damaging the common property).
These mechanisms are not well known or often utilised because of the better known principles that:
- By-laws cannot impose a monetary liability; and
- The Commissioner’s Office is generally a no-cost jurisdiction.
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Failing to comply with obligations
If an owner or occupier fails to comply with one of their obligations in the BCCMA, regulation module, by-laws or an adjudicator’s order, the regulation module provides that:
The body corporate may carry out the work, and may recover the reasonable cost of carrying out work from the owner of the lot as a debt.
There is no requirement to first obtain the permission of an adjudicator’s order to exercise this power, or have any enabling by-law. However, the body corporate should:
- Firstly, write to the owner or occupier and require the work to be carried out within a reasonable amount of time, giving them the opportunity to arrange the work at their cost;
- Authorise any decision to take action or incur spending by passing a resolution;
- Document the work carried out, and keep evidence of the need for the work to be carried out; and
- Provide any necessary access notices as part of carrying out the work.
Causing damage
Despite the Commissioner’s Office generally being a no-cost jurisdiction, the BCCMA specifically authorises an adjudicator to make orders for:
- payment of up to $10,000 towards damage that has been caused in repairing property; or
- requiring the person to carry out particular repairs of up to $75,000.
In seeking such an order, there needs to be sufficient evidence showing the cause of the damage otherwise an adjudicator would be unable to assist.
We can assist
In exercising any of these rights, the body corporate must always act reasonably.
If a body corporate is unsure as to whether it can (or should) exercise one of these rights, please let us know.
This post appears in Strata News #419.
Have a question about recovering body corporate costs from owners or something to add to the article? Leave a comment below.
Todd Garsden
Mahoneys
E: tgarsden@mahoneys.com.au
P: 07 3007 3753
Read next:
- QLD: Q&A Using a Strata Loan to Pay for Painting of the Complex
- QLD: Is Your Body Corporate Overcharging?
This article has been republished with permission from the author and first appeared on the Mahoneys website.
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For the mentioned “not well known” mechanisms in the BCCMA, are they exclusively applicable to physical damage such as tangible repair works or damage mitigation? If the Body Corporate attempts to recover administrative costs for issuing breach notices to owners or occupiers, are these costs included under the “specific protections to allow costs to be recovered” as mentioned in the article? If not, can house laws or house rules support the recovery of such costs, considering that I’ve heard house rules are generally not binding or enforceable by the Body Corporate against owners or occupiers?
Hi Cherbert
The following response has been provided by Connor Mahoney, Mahoneys:
A body corporate’s power and ability to recover costs incurred in undertaking maintenance works to a lot or for damage to the common property are distinct from the body corporate’s right to recover administrative costs.
While the mechanisms discussed above are provided for in the legislation, there is no power to recover costs incurred in connection with the administrative functions of a body corporate, for example, the preparation and issuance of a contravention notice to an owner or occupier at the scheme. This is the cost of being a body corporate. There is no ability to recover these costs from an owner but in some circumstances an owner will agree to bear the adminastrive costs of a body corporate in an effort to progress certain issues.
Separately, house rules are neither binding nor enforceable and would not give rise to any right of recovery of any costs incurred by the body corporate.
Hi Robert
To be in a position to assist, I would need to take a look at the breach notice, administration agreement, and levy notice. Let me know if you wanted me to review and see if I am able to assist.
Body Corporate Manager (BCM) billed an owner for administrative costs incurred from the issuance of a breach notice. This charge-back practice is supported by a clause in the BCM’s contract, ratified during a general meeting.
First question: Understood that BCCM legislation has stringent parameters regarding the imposition of monetary penalties by bodies corporate, often limited to cases like exclusive use by-laws. Is it legally sound for the BCM to transfer these administrative costs to an owner? If the body corporate does not have the power to impose such a charge, it cannot delegate this power to the Body Corporate Manager who then try to recover such a cost from the owner.
2nd question: The BCM subsequently added this administrative fee to the owner’s levy account, marking it as a ‘Body Corporate debt’. Is this categorization accurate and permissible?