New limit on debt collection claim period

The District Court decision of Body Corporate for Mount Saint John Industrial Park CTS v Superior Stairs and Joinery Pty Ltd [2017] QDC 245, has provided authority for the proposition that a body corporate must start legal proceedings within two years and two months of the debt becoming due, or the body corporate be barred from taking any recovery action at all.

Section 145 of the Body Corporate and Community Management (Standard Module) Regulation 2008 (and equivalent sections in the other regulation modules) outlines that if a contribution installment has been outstanding for two years, the Body Corporate must within two months from the end of the two year period, take action to recover the amount. It was previously accepted across the industry that in accordance with the Limitations of Actions Act, a Body Corporate has six years to recover outstanding levies. Body Corporates will now need to carefully monitor any levies which have been outstanding for close to two years and two months and commence proceedings before the expiration of that time period.

To read our article on “4 simple steps to debt recovery”, download a copy of the Essential Guide to NSW Strata Legislation eBook HERE.

To stay up-to-date with PICA Group news and industry updates, follow us on Facebook and LinkedIn.

Related Articles