Queensland’s COVID-19 and body corporate legislation updates

Like most states across Australia, Queensland has introduced legislation to minimise the impact of COVID-19 on individuals, businesses, and body corporates

To help reduce adverse effects and support the community, the Queensland Government has passed the Justice and Other Legislation (COVID-19 Emergency Response) Amendment Act 2020 which has enabled changes to the Body Corporate and Community Management Act 1997. The new legislative changes came in as of 25 May 2020 and will remain in place until 31 December 2020.

Legislative changes

By focusing on providing short-term economic relief to body corporates, the changes will be instrumental to combating challenges of COVID-19 as a community. Significant changes include:

A body corporate can, by ordinary resolution, adjust the sinking fund budget to remove some or all anticipated major spending for the current or future financial years. Should money have already been collected, and it has been agreed by ordinary resolution, owners must be refunded, and the item can be removed from the budget.

Determining what can be cut and what needs to be refunded could be hard for properties without considering many factors, including updated sinking fund forecasts, working with cash-flow planning along with significant administrative coordination that would be required. This should all be reviewed by committees with assistance from strata managers if this option is considered.

• Committees can change the due dates for payments of levies up to the last day of the body corporate’s financial year, either for all owners or individual lot owners.  An alternative to this option could be considered as a payment plan arrangement for a specific lot owner.  BCS have a payment plan application form available, which is accessible here.
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• The normal interest or penalty rate cannot be applied to overdue levies during the COVID-19 period. This stands irrespective of any previous resolutions to charge interest and whether the amount falls due in the COVID-19 period or not.
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• The statutory obligation to commence proceedings for recovery of body corporate levies of two years and two months from when they first fall is on hold for the COVID-19 period.  A committee can still resolve to commence action if deemed appropriate.
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• The amount a body corporate can borrow, via a general meeting, has been doubled for the period.
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• The Building Units and Group Titles Act 1980 has now been changed to allow committees to extend the payment date for levies to the end of the body corporate’s financial year. Here, committees have the same obligation to make sure that the body corporate can meet its financial commitments.

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