A body corporate is a legal entity made up of all unit title owners in a complex. Owners of a unit title own part of a property, for example, a townhouse or apartment complex.

Unit title owners become part of the body corporate when they purchase their unit. The law provides that every member of a body corporate must pay their allocated levies.

What is a levy?

A levy is a payment made by each unit title owner to the body corporate. Levies are generally used to cover the expenses of maintaining the complex such as maintenance, insurance, cleaning, and repairs or shared utilities for common areas of the complex e.g. power to run the lifts and lights. The body corporate will specify a date by which the levy must be paid.

How are levies calculated?

Each year, the body corporate will create a budget. The budget is considered and approved at the annual meeting. This budget includes expected costs for the year, with reference to the usual annual expenses and planned upcoming works needed. Once the budget is approved, it will be split amongst the unit owners according to each owner’s “ownership interest”.

Levies are kept in different funds and calculated differently. Levies are calculated by utility interest for the operating account, Long-Term Maintenance Fund and Contingency Fund. The Capital Improvement Fund levies are calculated in proportion to each unit title holder’s ownership interest.

Any overdue levies are recoverable as a debt and interest will be payable, plus costs if the levy is not paid on time.

If you are confused about the procedures to be followed when you are part of a body corporate, it pays to seek advice from a professional with experience in the area.

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.