A Body Corporate was required to complete significant remedial weathertightness works on their unit titled apartment block. They sought legal advice about their options as one of the unit owners could not afford to pay their share of the levy.

In the first instance, a unit owner should seek to borrow against the equity in their property to fund the levy. If finance is declined, the body corporate (or individual owners) may consider loaning funds directly to the unit owner, however this is not without risk and would need to be carefully documented to protect the parties’ interests.

In smaller body corporates this may not possible if there are no funds available to lend.

In the absence of any viable lending options the Unit Owner may choose to sell their unit to pay the levy. Depending on whether the levy has been struck, and the timing of the sale, either the purchaser will take over responsibility for paying the levy or the levy will be deducted from the sale proceeds.

If the unit owner is unwilling to sell, as a final resort, a body corporate can compel a unit owner to sell their property to recover their share of the levy. However, this can be a difficult process to manage, and we recommend exploring all other options first.

If the Unit Owner has insufficient equity to repay the levy, a sale may not be a viable option for recovery and the Body Corporate will need to consider other options.

Body corporates and unit owners are advised to seek independent legal advice to fully understand their options.

Leading law firms committed to helping clients cost-effectively will have a range of fixed-price Initial Consultations to suit most people’s needs in quickly learning what their options are.  At Rainey Collins we have an experienced team who can answer your questions and put you on the right track.

Rachel Collins & Raiyan Azmi