This article is about whether a body corporate can recover costs from lot owners.
Table of Contents:
- QUESTION: Can a body corporate use body corporate funds to paint areas that lot owners are responsible for?
- QUESTION: As body corporate funds may not be used on maintenance of an owner’s unit, what happens if this expenditure has been budgeted for and included in the annual levies set at the AGM?
Question: Can a body corporate use body corporate funds to paint areas that lot owners are responsible for?
In Queensland, can a body corporate use body corporate funds to paint the walls and soffits of balconies, patios, or courtyards that form part of a lot or exclusive use areas, which the owner is required to maintain in good condition under the exclusive use bylaw? If not, is the body corporate allowed to include the cost of this private painting in the lot owner’s annual levies, for example, through the sinking fund?
Answer: In any circumstance, the body corporate shouldn’t pay for lot owner’s maintenance obligations.
The body corporate can use body corporate funds to paint items that lot owners are responsible for, but only under two particular circumstances. Both of those circumstances involve recovering those costs from the lot owner.
The first example is when you’ve got a big painting project. The body corporate wants to ensure that everything within the building is painted, including items that fall under the body corporate’s responsibility and those that fall under the lot owner’s responsibility.
What should happen? A service agreement is entered into between the body corporate and each lot owner, whereby the body corporate is engaged to procure the works on their behalf. There are several reasons why that makes sense. Getting one contractor to do the whole building in one go is going to be a lot cheaper than every lot owner engaging a painter. Works will be at different standards, and this will not happen simultaneously. It’s a good idea for those practical reasons.
When you do that, the legislation says that the body corporate must recover the costs from the lot owner that relates to the work carried out on the lot. Ultimately, it shouldn’t be funded by the body corporate. The lot owner should fund it.
In terms of budgeting for this, the body corporate will initially pay the funds but will recover that from the lot owner. It wouldn’t make sense to budget for it as part of the levies and then recover it from the lot owners. You’d have to make an adjustment. There should probably be a separate line item on the income statement that says owner recoveries for painting works, and then it will have an equivalent outflow of the expenses for those elements of the contract paid for the lot owner work.
The second circumstance is when the lot owner refuses to carry out the painting works, and the body corporate does it on the owner’s behalf, then they recover the cost and sue the owner for that work.
In any circumstance, the body corporate shouldn’t pay for lot owner’s maintenance obligations. The principle also applies to a standard format plan with front yards that are part of the lot. Those costs must be recovered from the lot owners.
There is a recent decision that discusses this principle, which I like to refer to in Waves [2024] QBCCMCmr 269.
Todd Garsden
Mahoneys
E: [email protected]
P: 07 3007 3753
This post appears in the August 2025 edition of The QLD Strata Magazine.
Question: As body corporate funds may not be used on maintenance of an owner’s unit, what happens if this expenditure has been budgeted for and included in the annual levies set at the AGM?
We hear that body corporate funds may not be used on maintenance of an owner’s unit, eg mowing the yard, painting the balcony walls, or spraying the unit annually for pests and termites.
What if this expenditure has been budgeted for and included in the annual levies set at the AGM? If the body corporate cannot use the money for private maintenance, does this mean the owners who have paid the levies have lost their money?
Answer: Just because something is budgeted does not automatically mean it is approved to be spent or must be spent.
I don’t think so. Just because something is budgeted does not automatically mean it is approved to be spent or must be spent.
The key thing is the legislative fundamentals. Where a body corporate provides services to individual owners, it must, to the greatest practicable extent, recover the costs of those services from the user of them. What it means budgetary wise is that it should not spend that money that has been raised, which is really then a free klick for all owners next year when (ideally) the body corporate should not have to raise as much as they did in the previous year – noting, of course, that the owners themselves will be likely to have to make up the shortfall out of their own pockets for the individual services provided to them.
Frank Higginson
Hynes Legal
E: [email protected]
P: 07 3193 0500
This post appears in Strata News #704.
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