Actioning unpaid levies

Actioning unpaid levies By Ross Utting, Tracsafe

Unpaid levies can be a made aware of the range of parties to the dispute. You can financial headache for a financial consequences when raise your debt dispute online body corporate, particularly commencing an action. to QCAT (just google ‘QCAT a small body corporate. When the committee has taken all the initial actions of confirming that levies are getting through to the lot owner and sending reminders, what can they do? The BCCM regulations require that they must act if the debt owed is more than two years old. If your body corporate has a body corporate manager (BCM), the committee is often persuaded to outsource the task of progressing any action to a debt recovery or legal company. Recently, I was reminded of the consequences when I read a lawyer’s statement that “It is not uncommon for a body corporate to incur costs of $20,000 or more in levy recovery proceedings” and “A body corporate will almost never recover 100% of its costs, even if it wins”. Once a body corporate starts legal action, it is difficult to withdraw the action without the costs being awarded The reason why the costs can be so high is because legal firms will probably need to commence action in the Magistrates court with any subsequent appeal processed through superior courts. Legal representation is expensive and increases when superior courts are involved. There is another way (provided the debt is less than $25,000) that is much cheaper and should ensure most debt recovery costs are recoverable from the lot owner but does require some effort from one or more members of the committee. (It could be the body corporate manager, subject to their agreement to act and subject to an agreed fee structure which is reasonable and consistent with the body corporate’s administration agreement) The most cost effective way to recover a debt (which is less than $25,000) is through the small claims tribunal which is administered by QCAT and where parties must represent debt dispute’). Before you take any action, make sure that you have a committee resolution to approve the approach and to also authorise the spending of the QCAT application for which there is a filing fee of approximately $350 (for debts between $1,000 and $10,000) and a bailiff service fee generally around ~ $50. These outlays can be recovered from the lot owner as permitted by the Act. We recommend sending a letter to the lot owner by both registered post and email indicating your intentions. In many cases, this may have the desired impact … without requiring any further committee actions. Make sure your QCAT supplementary documentation showing evidence of the debt includes full details of the transactions associated with the lot ledger since the lot ledger was last in a paid-up state. Your documentation needs to be very selfexplanatory and suitably annotated and highlighted. against the body corporate. themselves and where costs Once you have received a Committees are often not must be borne by the separate sealed copy of your QCAT application, you can then contact the bailiff to have the documentation served on the lot owner(s). Once served, you may find that the lot owner(s) pays the outstanding debt. Good news, but to finish the process you must lodge a notice to withdraw (QCAT Form 58) and serve a sealed copy of the application to withdraw to each respondent. If the respondent continues not to pay, the respondent has 28 days from when they receive your application to lodge a response. If the respondent does not respond, you can apply to QCAT to decide by default using QCAT Form 6. Assuming that the respondent has replied, the matter will be listed for a QCAT hearing at which parties are expected to attend the tribunal in person and present their case. If you are not able to attend in person, you must make an application to QCAT prior to your hearing to ask for permission to attend by phone. Assuming that the body corporate is successful in the hearing, you may need to enforce the QCAT order. If the other party does not comply with the order to pay the debt to the body corporate, you can enforce the QCAT order. You have six years to enforce the order. Prior to taking any further actions, we recommend sending a registered letter and email to the lot owner indicating your intentions of enforcing. To register the QCAT order in the Magistrates court, you need to complete an affidavit (a sworn statement signed by you and properly witnessed by a Justice of the Peace) confirming that the debt has not been paid. You will need to obtain from QCAT a copy of the QCAT decision certified by QCAT (a JP or solicitor is not sufficient). Once you have your certified true copy and your sworn or affirmed affidavit, take the documents to the registry of the Magistrates Court. They will file the documentation and advise you a file number. As a result of this action, the Magistrates Court will automatically inform a credit reporting agency of the debt. This is a very powerful incentive for the lot owner to pay off the debt. If the debt continues to remain unpaid, the body corporate can subsequently make an application to the court to issue an enforcement warrant to recover the debt. Enforcement warrants can authorise the seizure and sale of property of the lot owner, the redirection of money that is owed or the redirection of their earnings. We recommend that a committee motion is passed prior to taking this final step which will be highly intrusive for the lot owner. It is also the time to consider if the next steps should be completed by a debt recovery agency. UOAQ members can log into the UOAQ website and access letter templates, committee motion templates, more detailed procedural steps, and example completed court documentation. Non-members, please consider joining UOAQ.

Article supplied by Tracsafe Ross is a body corporate manager and director of Tracsafe, offering services from DYI to full management. He also volunteers with UOAQ. Website www.tracsafe.com.au Email contact@tracsafe.com.au Phone 07 31143198