BODY CORPORATE UNPAID LEVIES – THE CONCILIATION PROCESS

An owner recently lodged an Application to the Commissioner, disputing the amount owing in Body Corporate Unpaid Levies and recovery costs. The matter was referred to a Conciliation Hearing but the end result left the owner and the Body Corporate back at square one.

Background

The owner has Body Corporate Unpaid Levies plus recovery costs amounting to over $3000.00. They cited various reasons why the amount has not been paid. However, the Body Corporate Committee believe that the entire debt should be paid in full and commenced recovery action about six months ago.
In the meantime, the owner, through her Real Estate Agent, lodged an Application with the Commissioner disputing the amount owing.
It is unlikely that the owner would have been aware that the Application had virtually no chance of getting a ruling unless she paid the entire amount owing. Had she done that, then she could have sought adjudication on the debt including recovery costs.
The fact is that the Commissioner has no jurisdiction to make a ruling where Body Corporate Unpaid Levies are still owing. The matter could only proceed to Conciliation where the facilitator could try and broker some sort of agreement between the parties but there is no obligation on either side to agree on anything.
In this case, the parties simply agreed that the owner would make a formal offer to the Body Corporate. The Application was then closed without any further action.
The Body Corporate was not obliged to accept the offer. They were only required to consider it and respond accordingly. Following the conciliation, an offer was made and subsequently rejected.
The overall process took over three months to reach its conclusion. The Committee members were forced to spend their own time in participating when there was never really any chance of resolving the matter.
In the meantime, the Body Corporate Unpaid Levies plus interest and costs increased and the owner was no better off apart from receiving some advice, which could be construed as legal advice, from the facilitator.

The Next Step

The Body Corporate now has no option but to proceed with legal action. The Facilitator seemed keen to push the Body Corporate towards referring the matter to QCAT for resolution but legal advice has indicated that they would be better off going through the courts.
The costs of the legal action will be significant and the owner will have to either pay the amount in full or get her own legal representation which will only add to the costs.
The lesson from this exercise is that owners should pay their levies on time. If, for some reason, they miss payments and are charged interest and even recovery costs, then they should pay the full amount and then refer the matter to the Commissioner who has the jurisdiction to decide on whether the additional costs are justified.
If you do not pay the outstanding amount you are setting yourself up for a potentially escalating amount in recovery costs and legal fees.
Watch this space for future developments.