Body Corporate Levy Contributions
Most people know that if they own a lot within a community titles schemes they are required to pay Body Corporate levies. For many, however, how Body Corporate levies are calculated are and what they are used for can be confusing,
Body Corporate levies are typically fixed every financial year at the Annual General Meeting (AGM) for the Body Corporate, and are based on Budgets prepared by the Committee that are approved by the Owners at the AGM.
There are typically two budgets prepared each year, the Administration Fund and the Sinking Fund.
The Administrative Fund Budget contains estimates of expenditure to cover:
- the cost of maintaining common property and Body Corporate assets;
- the cost of insurance;
- other expenditure of a recurrent nature (e.g. electricity, pest control, bank fees etc.).
The Sinking Fund Budget has two objectives and is based on a “Sinking Fund Forecast”:
- it must raise a reasonable amount to cover necessary and reasonable capital expenditure for that year, as per the Sinking Fund Forecast;
- it must reserve an appropriate balance necessary to meet anticipated major expenditure over several years into the future for major expenditure such as repainting the exterior of buildings or replacing the Scheme’s air-conditioning system.
The Minutes of the AGM clearly specify the due dates and dollar amount per lot entitlement and are issued to all Owners.
Levy Notices are issued by the Body Corporate Managers office a minimum of 30 days prior to the due date and in line with BCCM Legislation.
In August 2015 – Body Corporate Levies, what happens when owners do not pay?
For more information visit the Queensland Government website – Body Corporate – Financial Management – http://www.qld.gov.au/law/housing-and-neighbours/body-corporate/financial-management/
CTS Body Corporate Management.