Debt collection policy and protocol
Body Corporate 178796 (Freemans Park)
16 July 2025
Overview
This policy and protocol ensures timely levy collection to maintain Body Corporate finances and fairness for all owners. It outlines a clear process for overdue payments, including interest and potential legal action. Owners facing difficulties are encouraged to contact the Body Corporate Manager to discuss payment plans.
Introduction and purpose
At each Annual General Meeting, owners approve budgets and levies (including operating, long-term maintenance and any contingency) to be raised to meet the financial obligations of the Body Corporate.
The Body Corporate relies on the timely collection of levies to meet its expenses. If owners do not pay on time, a lack of funds may result in the deferral of operating expenditure and maintenance. As a result, the buildings may deteriorate. Additional funds may need to be collected from all owners in subsequent years to provide for adequate cash flow, which could result in conflict between owners who have paid their levies on time and those who have not.
This protocol aims to achieve harmony and fairness between owners.
The Body Corporate has developed this debt collection policy and protocol to ensure all levies are collected, and cash flow is maintained. The Body Corporate has no tolerance for the avoidable non-payment of levies.
Owners experiencing difficulties paying their levies are encouraged to notify the Body Corporate Manager immediately so that an appropriate payment plan can be considered by the Body Corporate’s Finance, Legal and Governance Subcommittee and the Body Corporate Committee.
Payment plans may be proposed by an owner and agreed to by the Body Corporate Committee. Plans should ensure that money overdue from a levy installment is paid in full prior to the next levy installment. The Body Corporate will not normally approve a payment plan that results in an owner’s debt increasing throughout the financial year as a result of subsequent levy installment or additional interest or charges. A payment plan should also settle all dues to the Body Corporate by the end of each financial year (30 April).
Debt collection protocol
The Body Corporate authorises Body Corporate Administration Limited to recover any unpaid levies, or other unpaid debt owed by an owner to the Body Corporate, together with interest set at 10% per annum. Interest is calculated on a daily basis, commencing the day after the due date.
Any additional costs charged to an owner in relation to an overdue levy or unpaid debt, other than the interest, must be approved in advance by the Body Corporate Committee.
Debt collection process for levies (including on-charges)
Timeline
Start of month – Levy notice issued
Invoice due date – Payment due
Due date and 1 day – 10% interest pa charged on overdue amount(s)
Due date plus 1 week – Reminder email + statement (7 days to pay)
Due date plus 2 weeks – Final payment email and statement (7 days to pay)
Due date plus 3 weeks – Email requesting Information for Finance and Legal Subcommittee and statement and courtesy phone call from BCA
First Finance and Legal Subcommittee meeting following Information Request Email – Consider information and recommendation to Body Corporate Committee
First Body Corporate Committee meeting following Finance and Legal Subcommittee Meeting – Consider Finance and Legal Subcommittee Recommendation
Week following Committee decision – Consequence of debt email and statement
Advice that legal action has been approved by the Body Corporate Committee if the debt remains unpaid 7 days from the date of the “letter of consequence”, and that any legal costs incurred in collection of the debt will be recoverable from the owner);
or other email from the Body Corporate Committee to the owner.