Connect with us:


Bodies Corporate established by the Body Corporate and Community Management Act 1997 have various rules and regulations that govern the payment and recovery of debts. Generally, a “Body Corporate debt” will be an amount owed by a lot owner to the Body Corporate. But is every debt a lot owner owes a “Body Corporate debt”? This article will consider what is and is not a “Body Corporate debt” and explain what happens for lot owners if they don’t pay.

What is a Body Corporate debt?

A “Body Corporate debt” is defined by the legislation as an amount owed by a lot owner to the Body Corporate in respect of:

  1. a contribution or instalment;
  2. a penalty for not paying a contribution or an instalment by the date for payment; and/or
  3. another amount associated with the ownership of a lot.

Therefore, in most cases, Body Corporate debts are unpaid levies and penalty interest applied to unpaid levies. However, what constitutes “another amount associated with the ownership of a lot”?

What is not a Body Corporate debt?

In the decision of Donnelly House [2017] QBCCMCmr 377 (3 August 2017), an Adjudicator found that the applicable test for whether “another amount associated with the ownership of a lot” is a Body Corporate debt requires:

  1. a quantified amount owing to the Body Corporate; and
  2. the debt arising as a function or incidence of ownership of the lot.

A quantified amount means that the Body Corporate must be able to establish the amount owed and how that amount was calculated.

Whether the debt arises as a function or incidence of ownership of the lot is less clear. However, the following decisions indicate the following would not be a “Body Corporate debt”:

  1. a costs order made against a lot owner in favour of the Body Corporate: See 211 Ron Penhaligon Way Offices [2020] QBCCMCmr 526;
  2. recovery costs associated with unpaid levies: See Body Corporate for Pinehaven 1 CTS 31755 v MacKenzie [2021] QMC 8; and
  3. a debt that arises under an agreement or deed as between the Body Corporate and the lot owner: see The Rocks Resort [2023] QBCCMCmr 159 (17 April 2023).

What happens if you don’t pay a Body Corporate debt?

If a lot owner fails to pay a Body Corporate debt, the regulations state that they will be unable to:

  1. vote on any motion decided at general meetings, save for motions that require a resolution without dissent;
  2. choose a member of the Committee for the Body Corporate; and
  3. be a voting member of the Committee for the Body Corporate.

Debt repayment plans

A common question we get asked is whether a lot owner still owes a Body Corporate debt if they enter into a repayment plan and adhere to that plan. The short answer is yes. Until a Body Corporate debt is repaid in full, the lot owner must be treated as owing a Body Corporate debt. This was confirmed by an Adjudicator in the decision of Merrimac Heights [2012] QBCCMCmr 277.

Final comments

In recent years, we have seen a sharp spike in lot owners failing to pay debts they owe to Bodies Corporate, on time and in full. It is the sad reality of the economy we live in now that many lot owners simply cannot afford to pay their levies, particularly with the massive increase in insurance premiums across the country following several recent natural disasters.

Both lot owners and Bodies Corporate must take all reasonable steps to pay and recover Body Corporate debts because if these debts are not paid, the Body Corporate runs the same risks as a company that cannot pay its debts on time and in full, meaning external administration.

If a Body Corporate is placed into external administration, every lot owner in the Body Corporate is placed at risk. In extreme cases, the Body Corporate could be terminated and sold as a single parcel to repay the Body Corporate’s debts.

HWL Ebsworth has assisted hundreds of Bodies Corporate to recover millions in unpaid Body Corporate debts. In 2022, we recovered about $600,000.00 in unpaid debts for Bodies Corporate in Southeast Queensland alone. We have a designated debt recovery team and online debt recovery portal, so that Committees and Body Corporate managers can track letters of demand, repayment plans, debt repayments and debt recovery proceedings.

If you need any assistance with Body Corporate debts, or have any questions about this article, please contact us.

This article was contributed by Mario Esera – Partner, HWL Ebsworth Lawyers

Leave a Reply

  1. Jan

    If a unit owner hasn’t paid Body Corporate fees and rates for over a year and his bank has now decided to Auction the property.
    Is the Body Corporate able to claim back unpaid Body Corporate fees?

    1. Mario Esera

      Thanks, Jan.

      Typically banks will clear all Body Corporate debts upon settlement of the sale so that the new owner starts with a clean slate.

  2. Richard Bolt

    I have a debt which I believed that I had already had a payment plan in place with the body corporate (I even asked them to let me know if they had an issue and I even turned up to the body corporate meeting to explain my financial hardship).
    My plan was to pay off as much as I could to offset any fees, then use my tax refund to help pay the debt off
    I’m only two payments behind (about $6,000) and have made over $1,300 and have advised how I will pay off the majority of the remainder by AirBNBing my property out during the Gold Coast Pan Pacific Airshow (which should earn roughly $3500-$5000 over those two weeks).
    However, even though I have stuck to the plan and made the payments that I said I would, that the Body Corporate (without even advising me that they had suddenly rejected my plan) are taking it to court to recover the rest.
    I asked for a stay of 30 days so that I could get a lawyer, and the Body Corporate lawyers wrote back advising the Body Corporate had rejected my plan (without evengiving the opportunity to show them that the plan will work). The air show is in less than 30 days and so I should have either the money or a lawyer to respond within the 30 days, but their lawyers came back and advised that this was rejected and they were taking it to court.
    How is that fair when I have been making payments and provide them a payment plan, have stuck to that plan (which I believed the body corporate had accepted), only to then find out that they have rejected my plan (without even advising me) and brought in lawyers who won’t even give the plan a chance or allow me to get a lawyer.
    What are my rights in this situation?
    Should I just go ahead pay the remainder within 30 days?

  3. Peter Arthur Lawrence

    Can 50 cents be called a real debt on a Body Corporate Levy?