Body Corporate Levies Merry Go Round

Posted by John Reid  /   December 06, 2012  /   Posted in Articles  /   2 Comments

I see that the Queensland Parliament Legal Affairs and Community Safety Committee has recommended yet another major change in the way that Body Corporate levies are set. The Body Corporate Levies Merry go Round continues. 

Rather than go into great detail about how these changes may be achieved, let me sum up the situation as it has unfolded over the years.

Traditionally, the developer has set the levies for Body Corporate buildings. The levies were often based and calculated on factors like floor space and the value of the units.

It is important to understand that owners were aware of the levies at the time of purchase and it follows that they accepted them to be fair and reasonable. After all, if they thought the levies were unfair why would they go ahead and make the purchase?

A lobby group argued that levies should be calculated on the cost of maintenance of common property and as such all owners should contribute equally. There were some exceptions to the rule but these needed to be demonstrated to QCAT.

In many cases, the tribunal ordered that the levies be equalised based on the logic that everyone should contribute equally to the maintenance of common property irrespective.

This meant that Bodies Corporate had to spend a great deal of money in changing the CMS to reflect the equalised levies. Understandably, many owners were horrified at the change and some contemplated selling their properties due to the increased levies.

Peter Lawlor, the Labor Minister responsible for Body Corporate legislation, was sympathetic to those who had to suddenly face massive increases in their levies. The suggestion that “greedy wealthy penthouse owners” were driving struggling pensioners from their homes meant there were votes in the issue.

Minister Lawlor managed to change the legislation and Body Corporate Levies were reverted to those originally set by the Developer. This meant even more cost to Bodies Corporate but many owners were relieved that they could now afford to continue to live in their apartments.

However, owners now face yet another change and probably another battle. In recent times, the lobby groups for those who want to equalise the levies have been the loudest but when owners who once again face increases in their levies become aware of the situation it is inevitable that they will also be very vocal.

The fact is that the Government faces a voter backlash if they make any change at all to the legislation irrespective of whether changes are justified or not.

Campbell Newman’s government is not off to a good start with ministers defecting to Bob Katter and possibly Clive Palmer. When the implications of the change in legislation dawn on Newman and his government, they may start to reconsider.

Whatever happens, the situation is a farce and a sad indictment on a Queensland Government that fails to act for the people irrespective of which side of politics you support.

One owner I spoke to is distraught at the possibilty that the levies might change yet again. She is a pensioner on limited funds. When she purchased her apartment, she was able to afford the levies and live within her means.

However, when her levies were equalised, she simply could not afford the increase and contemplated selling. After Labor reverted the levies back to their original status she felt that she had been given a reprieve. On hearing about the proposed backflip, she said “I have had enough. I can’t live like this – not knowing whether I can afford to live in my apartment or not from one year to another. They keep changing the rules. Its not fair.”

There will continue to be opinions on both sides. The Goverment will inevitably consider their own interests. Owners in Body Corporate communities make up a huge percentage of the voting population. I have no doubts that the Government will analyse the numbers very carefully. Whichever lobby group contains the most votes will be an important factor in how they proceed.

Read the full committee report

The opinions expressed in this article are personal commentaries and not intended in to be legal advice in any way. I have spent many years participating on a number of different Body Corporate Committees and provide an owner’s perspective on Body Corporate issues. For more visit my AboutMe page If you have any concerns or comments about any of the issues that are raised in these articles please use the form below to contact me.

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  2. David Parker May 19, 2013 1:28 pm Reply

    I own a larger unit in a complex of 16. I pay a larger portion and you are right I knew I had to pay more at the time of purchase. I did not see the insurance cost moving from $3600 per year to $36000 per year in 3 years. No reasonable person would. What was acceptable prior Yasi is now financially unacceptable. Why should I pay more for lawn mowing, pool cleaning or insurance? I have no more amenities than others no extra toilet or lift but I am expected to pay $1400 more per year then a smaller unit in my complex with the same amount of bedrooms.

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