Question: Are the costs involved in issuing levy recovery letters reasonable?
I don’t believe the recovery costs for my overdue levies are reasonable.
Under the body corporate manager’s (BCM) “internal debt recovery” procedures, I was charged a debt recovery fee of $50 for being 15 days overdue with my levy payments. The BCM sent a “reminder contribution notice”. I paid my levies and included the 2.5% penalty for my late payment, but not the debt recovery costs, as I did not believe it should have been charged according to the debt management item in our AGM.
The item states that recovery proceedings can be commenced via a mercantile agency after 54 days.
My latest contributions notice included an additional $85 for arrears. I did not receive a first reminder letter regarding this additional fee.
When I questioned these amounts, the BCM stated: “These costs are directly related to the issuance of the letters and are added to the outstanding levies of the lot owner”.
Are the costs involved in issuing these two letters (one of which I never received) considered reasonable?
Answer: The fee could have been avoided if you paid on time or contacted your manager about your situation.
Yes, the costs of issuing letters would be considered reasonable. They are a fee applied to remind you your levy is due, and they could have been avoided had you paid on time or contacted your manager if you were experiencing difficulty paying.
It is also not necessarily the body corporate’s fault if you didn’t receive one of the letters. Letters can only be sent to your registered addresses. If they have made a mistake inputting your address, the body corporate may be at fault, but otherwise, they can’t guarantee the post goes through or how you set up your email.
In addition, it sounds like debt management procedures have been agreed by owners at the AGM. This is a good thing. It makes the collection process clear for all owners. To check that the costs applied against your lot are correct, obtain a copy of your statement, which should list each cost applied. You can cross reference the costs against the items in the motion to ensure they correspond. If they don’t, ask your body corporate company why.
William Marquand
Tower Body Corporate
E: willmarquand@towerbodycorporate.com.au
P: 07 5609 4924
This post appears in the September 2024 edition of The QLD Strata Magazine.
Several Owners complained at being charged late payment fees and interest. due to non payment of their levies.
They claimed levy notices had not been received.
Owners subsequently located their levy notices in their Junk Files Folder..
All affected Owners used Gmail. BC Managers subsequently advised Gmail had updated their junk file process without notification. This led to levy notices that had been previously received reliably in Owners’ inboxes now being deposited in their junk file folders.
Committee took the view that the levy notices had been delivered to the Owners albeit into the junk files folder and not the inbox.
Committee agreed BC Managers had followed due process and were not responsible for the levy notices being deposited in junk file folders
Committee agreed to waive interest charges but not the late payment fee since this was a legitimate charge by BC Managers.
Hi Len
The following response has been provided by Frank Higginson, Hynes Legal:
That’s sounds ‘reasonable’ to me Len!
What fee in addition can be charged directly to the low owner though? Any admin fees should be charged to the Body Corporate per their contract (not held with the individual).
Is charging individuals late fees (not penalty interest) directly also a problem in Qld?
Hi Kym
The following response has been provided by Frank Higginson, Hynes Legal:
The legislation in Queensland says that interest can be charged at 30% per annum (2.5% per month) on overdue levies. A body corporate can also recover its reasonable legal costs in recovering levies. Charging outside those amounts is arguably outside the legislation but that might depends on the arrangements the body corporate has in place. That would need to be reviewed before a properly informed comment could be made.
Hi Liza,
I am in a situation where I don’t believe that the “recovery costs” are reasonable.
I was charged a debt recovery fee of $50 for being 15 days overdue under their “internal debt recovery” procedures, being the issuing of a “reminder contribution notice”. I paid my levies and included the 2.5% penalty for my late payment but not the debt recovery costs as I did not believe that they should have been charged yet at this point according to the debt management item in our AGM (where it is only after 54 days that recovery proceedings can be commenced via a mercantile agency).
My latest normal contributions notice included an additional $85 as I was still considered to be in arrears. I did not receive a 1st reminder letter regarding this additional fee.
When I questioned these amounts, in their response they stated that “These costs are directly related to the issuance of the letters and are added to the outstanding levies of the lot owner”.
Would the costs involved in the issuing of these two letters (one of which I never received) be considered reasonable costs?
Hi,
We have responded to your comment in the article above.
Quedtion:
My body corporate has initiated Legal action against me late last year for recovery of arrears even though we have a contract in place and I have maintained regular rewuired agreed repayments
Issue ONE: they have failed to take steps since October 2019 until now March 29
Issue TWO: What is the effect of current Cobid19 will have on any current Court legal proceedings for recoveries?
Issue THREE: Will legislation such as protecting tenants from eviction or similar , will also apply to ease or halt Body Corps ability to continue or initiate recovery actions against owners who are/have been suffering because of Financial hardship BEFORE the Corona virus crisis?
Much appreciated for your assistance