QLD body corporate levies: how contributions are set, invoiced, and recovered

Every lot owner in a Queensland community titles scheme must contribute to the scheme's running costs. The Body Corporate and Community Management Act 1997 (BCCM Act) and its regulation module — most commonly the Standard Module — set out how those contributions (levies) are fixed, how they must be notified, and what the body corporate must do when they aren't paid. Levies are not optional, and they are not negotiable lot-by-lot: the process is prescribed, and departures from it are a common ground for dispute.

The two funds

A body corporate must budget for, and levy contributions to, two separate funds:

• Administrative fund — the recurrent, day-to-day spending: insurance premiums, common-property maintenance, utilities for common areas, management and administrative costs.
• Sinking fund — capital and non-recurrent spending: painting, roof replacement, lift overhauls, and other major works. The budget must be informed by a forecast of expected capital expenditure over at least the next 9 years (in practice schemes commission a 10-year sinking fund forecast).

Money in one fund cannot simply be spent on the other's purposes — the split is a structural feature of the Act, not an accounting preference.

How levies are set

1. Budgets first. Each year the body corporate must adopt an administrative fund budget and a sinking fund budget at the AGM, by ordinary resolution.
2. Contributions follow the budget. The same meeting fixes the contributions needed to cover those budgets, again by ordinary resolution, and sets the number of instalments and their due dates.
3. Each lot's share is calculated on the contribution schedule lot entitlements — the schedule on the community management statement. Two lots with equal entitlements pay the same; a lot with double the entitlement pays double. The body corporate cannot pick different shares by agreement or by resolution.
4. Special levies. If an unexpected liability arises mid-year — an insurance excess, urgent works, a legal bill — the body corporate can strike a special contribution by ordinary resolution at a general meeting. The committee cannot levy owners on its own authority.

The levy notice

A contribution becomes payable only after a valid written notice. Under the Standard Module the notice must be given at least 30 days before the contribution is due and must state, among other things:

• the amount of the contribution and the date it falls due,
• any discount that applies for on-time payment,
• any penalty (interest) that applies to late payment, and
• the total of any outstanding contributions already owed for the lot.

A notice that omits the required content, or gives short notice, is vulnerable — owners have successfully resisted recovery where the paperwork was wrong.

Discounts and penalty interest

The Act lets the body corporate use both a carrot and a stick, each fixed by ordinary resolution:

• Discount: up to 20% of the contribution may be allowed if it is paid by the due date. Once resolved, the discount must be applied consistently — the committee cannot grant it to some owners and not others.
• Penalty interest: simple interest of up to 2.5% per month (30% per year) on outstanding contributions. Interest accrues on the arrears, and like the discount it must be authorised by resolution before it can be charged.

A body corporate may also, by resolution, agree to a payment plan or waive penalties in cases of genuine hardship — but the waiver is the body corporate's decision, not the owner's right.

When levies aren't paid

Unpaid contributions are a debt owed to the body corporate, and the Act is unusually prescriptive about recovery:

• The debt includes the contribution, any penalty interest, and the reasonable recovery costs the body corporate incurs.
• Under the Standard Module, if a contribution has been outstanding for 2 years, the body corporate must start proceedings to recover it within 2 months of that anniversary — recovery of long-outstanding levies is a duty, not a choice.
• Liability runs with the lot: a buyer becomes jointly liable with the seller for arrears on the lot, which is why levy status is a standard pre-settlement search.
• An unfinancial owner — one who owes a body corporate debt at the time of a general meeting — generally cannot vote on most motions (resolutions without dissent excepted) and cannot nominate for, or be a member of, the committee.

Disputes about whether a levy was validly struck or noticed go to the Office of the Commissioner for Body Corporate and Community Management; straight debt recovery goes to the courts (usually QCAT's minor civil disputes jurisdiction or the Magistrates Court, depending on amount).

Common mistakes

1. Levying without a budget — contributions must be anchored to budgets adopted at a general meeting; a committee "levy" is invalid.
2. Short or incomplete notices — less than 30 days, or a notice missing the discount/penalty statement.
3. Selective discounts or waivers — applying the on-time discount inconsistently between owners.
4. Charging interest never authorised by resolution.
5. Sitting on old arrears — missing the mandatory 2-year/2-month recovery deadline.
6. Adjusting shares by side-deal — contributions must follow the contribution schedule lot entitlements, full stop.

How StrataPilot handles this

StrataPilot's levy management is built around these rules: contributions are generated from the adopted budgets against each lot's contribution schedule entitlement, levy notices carry the due date, discount, and penalty disclosures the module requires, and arrears are tracked per lot — so the committee can see who is unfinancial before a general meeting and act on old debts before the recovery deadline passes.

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This guide is general information about Queensland legislation, current as at the "last updated" date above — it is not legal advice. For decisions that matter, check the current BCCM Act and your scheme's regulation module, or ask the Office of the Commissioner for Body Corporate and Community Management.