A personal approach
to body corporate management
That’s why we take the time to listen, tailoring our management approach to suit every person, their communication style and business preferences.
Receive an obligation
free proposal
Please contact us here if you are seeking a proposal for a building we don’t currently manage. If you are an existing BCsystems customer please email us at info@bcsystems.com.au
Body corporate levies are not optional. They’re critical to keeping your building maintained, insured, and operational. When even one owner fails to pay their levies on time, it affects everyone in the scheme. But what happens when you’re genuinely unable to meet your levy obligations? A payment plan could be your solution.
Here’s everything you need to know about requesting a payment plan and how the process works.
What Is a Levy Payment Plan?
A payment plan is a formal arrangement between a lot owner and the body corporate that allows overdue levies to be paid in instalments over a set period, typically up to 6 months. It doesn’t reduce the amount owed – it simply allows repayment over time.
The plan will set out a schedule of payments, for example, $300 every fortnight, and a final date by which the debt must be paid in full. Once a plan is in place, you must adhere to the schedule. If you miss a payment or fall behind again, the agreement may be cancelled, and the body corporate can initiate legal action to recover the debt.
Payment plans must be approved by the body corporate committee and must comply with the Body Corporate and Community Management Act 1997 (BCCM Act). While an approved payment plan can ease short-term financial pressure by spreading out repayments, it does not stop additional costs from accruing, for example, the next levy will be issued and added to your account.
In most cases, penalty interest will continue to apply to the outstanding balance until the full debt is paid, unless the body corporate has specifically resolved to waive it. This means that the sooner you repay the debt in full, the less interest you’re likely to incur, and the lower your overall cost will be.
When Should You Request a Payment Plan?
You should consider requesting a payment plan if:
- You’ve experienced a temporary loss of income or employment
- There was a genuine administrative or communication error
- A sale settlement or ownership transfer was delayed
- You’re experiencing other financial hardship but intend to repay the full amount
If you’re refusing to pay levies due to a dispute with the committee or building decisions, a payment plan is not offered. Instead, legal debt recovery is pursued.
How to Request a Payment Plan
To apply for a payment plan, you must be the registered owner of the lot. Applications from tenants, agents, or other third parties are not accepted.
The first step in seeking a payment plan is to assess your own financial position and work out what you can reasonably afford to repay on a regular basis. Be realistic. Committing to an amount you can’t maintain will only create more problems later.
Next, contact your body corporate manager or body corporate committee. Let them know about your situation and request the appropriate payment plan application form. While your body corporate manager may facilitate the levy recovery process, they do not make decisions about whether a payment plan is approved. That authority lies solely with the body corporate committee.
You’ll need to complete the form in full, outlining your current circumstances and proposing a repayment schedule. Your application should include:
- A clear and consistent payment schedule with regular instalments
- A commitment to repay the full outstanding amount within six months, unless the committee agrees to an extension
- Confirmation that any new levies issued during the term of the plan will be paid in full and on time, separate to your arrears
If you’re applying due to financial hardship, the committee may request supporting documentation. This could include a brief statement of your financial position, bank statements, or a letter from a financial counsellor. While this may feel intrusive, it helps the committee assess whether your request is genuine and determine the best course of action.
Once your completed application is submitted, it will be presented to the committee for review. Approval typically requires a simple majority vote. In making their decision, the committee will take into account your payment history, the reason for the arrears, and whether the body corporate can manage without immediate payment of the full amount.
What Happens While You Wait for a Decision
While your application is being reviewed by the body corporate, you should continue to pay any new levies that fall due to avoid your debt growing further. If you’re able to, it’s also advisable to start making small payments toward your arrears, even before a formal plan is approved. This shows good faith and helps reduce the total debt that may be accruing on your account.
Make sure to keep records of all payments made, and if you’re unsure about the status of your application or how long the committee will take to decide, ask your body corporate manager for an update. Some committees may vote quickly via email or electronic meeting, while others may wait until their next formal scheduled meeting.
Related content
Share This Post
Subscribe To Our Newsletter
More To Explore
Understanding Committee Roles: Who Does What?
In a body corporate, decisions are made by owners and the committee, while much of the day-to-day administration is carried out with the support of a body corporate manager.
What’s That Smell? Odours in a Body Corporate Scheme
Whether it’s cooking smells, cigarette smoke, pet odours, rubbish, or drainage issues – odours can quickly affect the enjoyment of lots and common property and escalate into disputes if not handled properly.