Owners Corp / Body Corporate Fees
An Owners Corporation is entitled to set Annual Fees or Levies to cover the costs associated with the operation of the Owners Corporation. Additionally the Owners Corporation has the power to raise Special Levies if needed.
The Owners Corporation can dictate the method and date of payment.
Annual Fees or Levies cover general administration, maintenance, insurance and other on-going costs. Lot owners are charged their share of annual fees according to their lot liability.
Special Fees or Levies cover extraordinary or unexpected expenditure such as to urgently repair the building or to cover the cost of legal action against the Owners Corporation. Lot owners are charged special fees according to their lot liability, unless works are being undertaken that will only benefit one, or some (but not all) lots. In such a case, special fees are charged using the ‘benefit principle’ which means that those who benefit more, pay more.
If the amount of proposed special fees is more than double the amount of the owners corporation’s annual fees, it must be approved by a special resolution of the Owners Corporation.
Overdue and Unpaid Fees
Owners cannot vote on ordinary resolutions if they owe fees to the owners corporation. An owners corporation can pass a resolution to charge the penalty rate of interest on unpaid fees (this rate is set by law and published on the Department of Justice website).
An owners corporation or its manager cannot charge a lot owner any other fees or charges, such as an ‘administration fee’, for overdue owners corporation fees. However, the Owners Corporation can take action to recover unpaid fees in the Magistrates’ Court of Victoria or at VCAT.