Question: Can a body corporate impose a special levy on owners for a service, such as an in-house phone system, even if some owners did not support or contract into it?
I am an owner in a 127-lot scheme in Noosa, which includes eight retail lots and the remainder residential. Five years ago, the committee removed the PABX system from the caretaker’s office and proposed an in-house phone system as a replacement. The system was funded by a special levy applied to residential lots, with costs added to levy notices. The AGM motion stated the service would allow guests to make restaurant bookings from their units, and it passed.
Now, with the contract ending, the committee has chosen not to renew the service and has requested the return of all phones. At the time, I did not support the original motion and later submitted a motion to opt out. However, the committee advised owners to vote against it, and my motion failed. Does the committee have the authority to impose a special levy on owners for a service they did not contract into?
Answer: You could obtain advice as to whether the costs incurred by the body corporate were a proper expense (to be recovered from all owners) or should be recovered only from the users.
The committee cannot impose a special levy – this is a restricted issue. However, if the body corporate incurs an expense, it can only recover it from owners through levies charged in accordance with the relevant lot entitlements.
However, when the body corporate provides a service to owners, it:
- cannot force owners to accept the service;
- must recover the costs from the users of the service.
The obligation to recover costs from the users of the service extends to capital or up-front installation costs. It may be worthwhile obtaining advice as to whether the costs incurred by the body corporate were a proper expense (to be recovered from all owners) or should be recovered only from the users.
Todd Garsden Mahoneys E: tgarsden@mahoneys.com.au P: 07 3007 3753