Can an owner refuse to pay strata levies because the owner has a dispute with the Body Corporate?

Short answer: No!

An owner’s obligation to pay strata levies is independent of any other matter between the owner and the body corporate.  Therefore, if an owner refuses to pay his/her/its strata levies – the owner will become non-financial, and incur interest at 30% (or such lesser rate set by the body corporate).  Following from being a “non-financial” member, the owner will also lose the right to vote at meetings and act on the Committee.
If an owner disputes a decision, action or inaction of a body corporate, he/she/it must lodge the complaint with the body corporate and seek clarification or remedy from the dispute. If not resolved at this level, the owner may seek to gather support from other owners to call an extraordinary general meeting.  If this is not possible (in other words, the owner cannot generate sufficient interest from other owners), the owner may submit an Application for the matter to be decided by the Body Corporate Commissioner, or in limited circumstances, may lodge proceedings in the Magistrates or Supreme Court (depending on the type of complaint and parties involved – such as an insurance dispute over repairs, wherein the dispute relates to an insurer of a body corporate).
Further, even if the owner claims the body corporate owes him/her/it money for something (such as repairs the owner claims to have been made relating to “common property” or damages associated with “common property), the owner must continue to pay strata levies as and when they fall due, and take action against the body corporate separately.
If the owner refuses to settle his/her/its strata levy obligations, the owner will suffer not only the loss of standing as a financial member, but also incur interest and potentially mercantile and/or legal fees associated with recovery proceedings.  Unlike a commercial dispute between creditors and suppliers, there is no right reserved to the owner to “set off” obligations due between the parties.
If you are having problems with mounting body corporate strata levy balances in your Scheme, and are seeking progressive and assertive legal representatives, please contact the team at Nautilus to arrange a no-obligation consultation.  Our solicitors service the Eastern Queensland region, from Port Douglas to Coolangatta.  We invite you to contact our Body Corporate Team by telephone on 07 5574 3560 or by email.
Submitted by:  Katrina Brown, BA JD ATIA TEP SSA, Commercial and Property Lawyer