Strata Levies: Can an owner refuse to pay levies?
Can an owner refuse to pay strata levies because the owner has a dispute with the Body Corporate?
Short answer: No!
Can an owner refuse to pay strata levies because the owner has a dispute with the Body Corporate?
Short answer: No!
In Queensland, “where” you lodge a Claim and Statement of Claim is dictated by the Uniform Civil Procedure Rules 2001 (“UCPR”).
Queensland has three different categories of Courts, which are essentially organised in terms of the matter types which each decide, as well as the level of dollar value to be considered:
1. In the Magistrates Court for amounts up to $150,000.00;
2. In the District Court for amounts from $150,000 – $750,000.00; and
3. In the Supreme Court for an unlimited amount.
Once we determine the category of Court, we then need to decide which Registry in which to lodge your matter. Unfortunately, the decision as to which Registry is chosen, does not necessarily have any correlation to your location. The Claim and Statement of Claim should filed be in the Registry closest to one of the following:
1. The Defendant’s location; or
2. The location in which the incident or contract giving rise to the Claim took place.
Selecting a more convenient “Registry” for you, may result in an Order for Costs against you if the Defendant successfully argues you have not complied with the Rules, with the inevitable change of venue for the proceedings. Therefore, to avoid this expense, we strictly comply with the Rules in selecting the Registry.
The “Registry” grounds the location of your proceedings for the balance of the case. For instance, if you have to attend Court, you will attend the Court associated with the Registry. There are exceptions to this, and on occasion you can attend by telephone, but largely your case is tied to that Registry location.
A copy of the Claim must be served on each Defendant, each of which has 28 days from the day of service to file a defence or attend to the matter (such as payment of the debt). (Please see our Articles for discussions on Service.)
If the Claim is disputed or a Defence is filed, a copy of must be served on you. You are then provided 14 days to lodge a Reply.
If the Claim is paid in full or you no longer wish to proceed, a Notice of Discontinuance should be filed with the Court. Alternatively, if no Defence is lodged (or alternative satisfaction of your Claim made), then you may opt to lodge a Default Judgment.
If you have any questions or enquiries about lodging a Claim in Queensland, we welcome you to contact our offices on (07) 5574 3560 or email info@nautiluslaw.com.au. We thank you for considering Nautilus Law Group.
Submitted by: Nautilus Law Group
There are five different Body Corporate regulation modules to be considered when a body corporate is assessing the scheme. This is depending on the individual circumstances of the scheme. Over the following weeks we will be reviewing each Module.
The first Module to be discussed is the “Standard Module.”
The Standard Module
A new regulation module, the Body Corporate and Community Management (Standard Module) Regulation 2008 (the Standard Module) commenced on 30 August 2008. This regulation module replaces the Standard Module regulation which commenced in 1997. This Body Corporate regulation module is considered to be highly regulated and is generally used in schemes which are predominantly residential.
Committee- Section 98
It is essential for a Standard Module scheme to have a Committee; this is chosen at the compulsory Annual General Meeting. The Committee must compromise of a chairperson, secretary and treasurer. Members of the body corporate (the lot owners) are eligible to be voting members of the Committee and may nominate themselves for Committee membership.
Expenditure- Section 151
The body corporate of a Standard Module scheme is able to limit Committee spending, although, if no amount is set, the amount is then defaulted to multiplying the quantity of lots included in the scheme by $200.00. For example, if there are 200 lots in a particular scheme, the Committee spending amount is $40,000.00.
Financial- Section 146
A Standard Module scheme must establish and maintain an administrative and sinking fund.
The following must be paid into the Sinking fund:
(a) the amount raised by way of contribution to cover anticipated spending of a capital or non-recurrent nature (including the periodic renewal or replacement of major items of a capital nature and other spending that should be reasonably met from capital); and
(b) amounts received under policies of insurance for destruction of items of a major capital nature; and
(c) interest from investment of the sinking fund.
The administration fund incorporates recurrent spending such as maintenance of gardens and lawns on common property.
Records- Section 204
Standard Module scheme Committee members are allowed reasonable access (without payment of a fee) to all body corporate records. General members of the body corporate are entitled access to the records on the exchange of payment.
Improvements to common property by a lot owner- Section 164
If authorised by ordinary resolution of the body corporate, a lot owner may make an improvement to the common property. If the improvement is minor ($3000 or less), the Committee may give approval.
Body Corporate Debt- Section 145
(2) If the amount of a contribution or contribution installment has been outstanding for 2 years, the body corporate must, within 2 months from the end of the 2-year period, start proceedings to recover the amount.
Action can be commenced earlier, but body corporate need to be careful that they apply a reasonable approach.
We welcome you to contact our offices on (07) 5574 3560 or email info@nautiluslaw.com.au. We thank you for considering Nautilus Law Group.
In the coming weeks we will address the Accommodation, Small, Commercial and two-lot scheme modules.
Stay Tuned!
After a Claim and Statement of Claim have been lodged with the Court and returned to us, the next step is to “serve” the documents on the Defendant in accordance with the Uniform Civil Procedure Rules 1999 (Qld) (UCPR).
Rule 105 of the UCPR states:
(1) A person serving an originating process must serve it personally on the person intended to be served.
Service on an Individual:
Personal Service is performed by giving the document to the person mentioned in the document. If the person refuses to accept service, the Rules permit the service agent serving the document to place the document down in the person’s presence and then explain what has been placed by the person.
Occasionally, we may be required to conduct a skip trace to find a Defendant. A skip trace requires the engagement of an investigator to search a wide range of public and private records to find the historical movements of the Defendant. Whilst a skip trace may not find the Defendant, it may bring to light contacts which we can use then to find the Defendant.
Service on a Company:
If the Defendant in the matter is a company, service is be undertaken by sending the documents by post to the Defendant’s registered office.
After Service:
Pursuant to the UCPR, the Defendant has 28 days from the date of service to file a Defence or reach an agreement with the Plaintiff (such as paying a debt in full or by entering into a payment plan, or engaging in conduct that is required by the Plaintiff of the Defendant in the Claim and Statement of Claim).
If no action is taken by the Defendant following such period, there are a number of options available, but the most logical in cases in which the debt is “liquidated” (i.e. for a fixed amount) is to seek a Default Judgment against the Defendant. Following entry of a Default Judgment against the Defendant, the Plaintiff is then empowered to “enforce” the Default Judgment.
Effectively, service is the second “starting gate” to the process of chasing a matter. Service can take a considerable period in many cases in which the Defendant is an individual, and is quite frankly, the most frustrating part for many of our clients.
We welcome you to contact our offices on (07) 5574 3560 or email info@nautiluslaw.com.au. We thank you for considering Nautilus Law Group.
The Body Corporate and Community Management Act 1997 (“the Act”) provides that a Body Corporate Committee shall (subject to delegation of any functions to a Body Corporate Manager or external service provider):
– Occupational health and safety;
– Fire safety; and
– Glass and structural mandates.
The obligations placed on the Committee can be daunting and onerous. However, a Body Corporate is authorised, pursuant to the Act, to delegate many aspects of the executive and/or administrative responsibilities of “managing” a Body Corporate to a service provider, which is often referred to as a “Body Corporate Manager.” (Section 119 of the Act) The Committee and Body Corporate Manager, collectively, service the obligations to the Body Corporate Owners.
The Body Corporate may elect to delegate all, or few, of the executive and/or administrative tasks otherwise reserved to a Body Corporate Committee. For example, in small complexes (under 8 Units), a Body Corporate Manager may be retained to perform the financial reporting obligations, but the Committee will remain all other tasks (such as organising contractors, providing notice to owners, undertaking meetings, etc). Most medium to larger complexes employ Body Corporate Managers to perform a far broader scope of tasks, with the Committee retaining more of an executive “supervisory” role with insight on strategic matters, but hands off on the administrative duties.
In order to retain a Body Corporate Manager, the engagement must be in writing, state the term of engagement, state the functions the Manager is required or authorised to carry out and state the basis for which payment of the services is made. In defining the functions authorised, the engagement must also identify if the Manager is permitted to engage in any executive decisions. An engagement may not exceed a 3 year period; however, no minimum term exists. Upon the expiry of the 3 year period, the Manager must renew the engagement with the Body Corporate.
The benefit of this flexibility of engagement, is that Bodies Corporate can “test” a Body Corporate Manager on a shorter term, and if happy, then engage the Manager for the longer term.
If, however, the Body Corporate is dissatisfied with the services of a Manager, during the period of an engagement agreement, the Body Corporate may terminate a Manager in some circumstances (including circumstances in which a Manager commits certain offences). (See Sections 129 and 130 of the Act)
Nautilus works with many outstanding Body Corporate Managers across Queensland, and we certainly support the retention of Managers for the bulk of Bodies Corporate. The scope of works can be broad, or limited – but in all cases, the Committee is able to rest more comfortably knowing they have a resource available to them. This is especially important for large Bodies Corporate, because the Committee members usually have significant personal obligations and are not capable (nor required) to work extensively for the Body Corporate (which would otherwise be required in the absence of a Body Corporate Manager appointment).
We appreciate that from time to time Committees may question the services offered by a Manager, or may wish to be provided advice on Management Agreements. Our Team are seasoned at reviewing Agreements, and assisting Queensland Bodies Corporate with such matters.
We offer an initial no charge, no obligation consultation and offer such services by telephone, Skype, email or on location (Brisbane to Gold Coast only). We also fly to Cairns, Townsville, Mackay and service the Sunshine Coast on a quarterly rotating schedule (although the bulk of services to these regions occur by telephone, Skype or by email).
We welcome you to contact our offices on (07) 5574 3560 or email info@nautiluslaw.com.au. We thank you for considering Nautilus Law Group.
We hear that on occasion – but all is not lost for the Body Corporate!
Fortunately, hope is not lost. Section 143 (3) of The Body Corporate and Community Management (Standard Module) Regulation 2008 provides:
(a) a person who was the owner of the lot when the debt became payable;
(b) a person (including a mortgagee in possession) who becomes an owner of the lot before the debt is paid.
How do you know when the mortgagee takes possession? They have to tell the Body Corporate, by Body Corporate and Community Management Form 8 (Information for body corporate roll), that they have done it. If they do not notify the Body Corporate, hard luck on them – the Body Corporate is still entitled to their interest, and recovery of reasonable legal fees for having to chase the mortgagees.