Body corporates must charge fees or levies for each lot. This money is to be used to maintain and improve common property and cover the costs of administration and other tasks associated with managing the body corporate.

Sometimes, lot owners can’t or won’t pay their fees. Allowing lot owners get away with late or non-payment of body corporate fees is a sure way to devalue your investment. When fees aren’t paid, there’s no money available for repairs and general maintenance, and your property can soon fall into disrepair. If you have a lot owner that’s not paying their way, it’s important to recover that debt. Remember that you can only start debt recovery actions 21 days after notice is given, and recovery must be approved at a general meeting.

There are four key steps to debt recovery

1. Issue a reminder levy notice 35 days after the levy due date.
2. Issue the first levy recovery letter 60 days after the levy due date.
3. Issue the second levy recovery letter 75 days after the levy due date.
4. 96 days after the original date that the levy was due, and where the debt is more than $2,000, you can appoint a debt collection agency, obtain legal advice, and/or retain legal representation. At this point the body corporate’s lawyers can issue a letter of demand and begin legal proceedings against the lot owner, mortgagee in possession, or former lot owner to recover the debt.

Levy payment plans

The body corporate may recover the cost of debt recovery from the lot owner. You can let lot owners enter into a payment plan to get their accounts back up to date. Usually payment plans must be completed in 12 months but can be extended if the body corporate agrees.

There are four steps to managing a levy payment plan:

1. The lot owner must ask for a payment plan.
2. The plan must contain specific information according to the relevant legislation. The body corporate manager can provide a proforma payment plan that meets these requirements.
3. The owner must complete and return the form to the body corporate manager.
4. The owner must make regular payments according to the plan, or else legal proceedings may be instigated.

Levy payment recovery services

For more than 70 years, Kemps Petersons Receivables have consistently collected 85% of debts without having to initiate court action. Our goal is to recover monies as quickly, efficiently and cost effectively as possible for your body corporate scheme.

Visit kpr.com.au for more information.