FAQ - Levies
Can I Pay By Direct Debit? Can I SeT Up Regular Payments?
Yes. Please note that Precision Body Corporate Management cannot manage the direct debit from our end, that is, we cannot take the money out of your account.
However, your levy notice contains payment details including BPay information. You can set up a regular BPay or credit card payment with your bank at any time.
If you do this, you should remember to review the payments after each AGM, as the levy amounts may have changed. You should also remember that levies are due in advance. If the levy is due on 1 January, you need to have the full amount paid by that date. Even if it is for the period 1 January to 31 March, you cannot “pay it off” over that time.
What Is The Difference Between Administrative Fund and Sinking Fund?
The Administrative Fund is for the day to day, year to year expenses. This usually includes insurance, gardens and mowing, body corporate management fees, pool maintenance and chemicals, lift maintenance, and electricity for the common property.
The Sinking Fund is a savings fund for long term capital repairs and maintenance. The idea is that all of the owners put a small amount of money away each year so that when the big expenses are due the money is already there to pay for it. The “big expenses” vary depending on your complex, but may include roof repairs, external painting, repairs to driveways, boundary fences and pools.
Who Decides What The Levies Will Be?
The owners do. All levies are set at the Annual General Meeting. The committee and Body Corporate Manager make recommendations, but it is owners who vote on the budget and levies. Note – the levies are NOT set by the Body Corporate Manager.
The Adminstrative Fund budget is based purely on what the owners need and want to spend. The owners have little control over the insurance, common electricity and other such things. However, they do have control over other items.
The more owners wish to spend, the more that has to be budgeted, the higher the levies become. If you want a mowing contractor at the property each week, that is fine, however they will charge for it which will increase the levies.
The Sinking Fund budget and levies are usually based on a report called the Sinking Fund Forecast. This is usually prepared by a Quantity Surveyor. The Forecast estimates the amounts and times for future expenditure, and makes a recommendations as to the amount the owners should be putting away each year to meet this expenditure. Body Corporate that run their Sinking Fund in accordance with a Sinking Fund Forecast rarely have to ask owners to dip into their pockets to find additional funds in a hurry.
What Happens If I Don't Pay My Levies On Time?
First, you lose some of your rights. For example, you cannot vote on most motions at the AGM, you cannot be on the committee or nominate someone else to be on the committee.
Second, if your body corporate has elected to charge interest on overdue levies, you will be charged interest. Under the Act, this can be charged at 2.5% per month, which equates to 30% per annum. This is a substantial penalty.
Third, if you continue to not pay your levies, the body corporate will have difficulty meetings its payments (insurance, maintenance etc). This may mean that your property starts to suffer – the gardens may get out of hand, the exterior painting may not be done, the gutters may not get fixed. The Committee will be left with no choice but to start debt recovery proceedings against you. There is no defence to not paying your levies.
If you still refuse to pay, eventually the court will order that your property be sold (whether it is the unit, another property or vehicle). Your property will be sold at auction and may be sold for far less than its’ market value.
It is important to always pay your levies on time. If you cannot pay, you should contact the Body Corporate Manager or Committee to discuss your options.