Body Corporate Levies and Special Assessments Explained

When you purchase an apartment, townhouse, or unit under the Unit Titles Act, you own your individual unit and share common property with other owners. All owners are automatically part of the body corporate, which manages shared areas, insurance, maintenance, budgets and levies.

For many unit owners, levies are a recurring cost set by the body corporate. Additional levies or funding calls can arise when maintenance, insurance, defects, litigation or other costs exceed available funds. Understanding the disclosure documents, LTM plan and dispute pathways helps you ask better questions before buying or voting on body corporate decisions.

Understanding Body Corporate Levies

Body corporate levies fund the ongoing costs of running and maintaining a unit title development. These costs typically include:

• Building insurance: Cover for common property and sometimes the building structure
• Common area maintenance: Cleaning, gardening, repairs to shared spaces
• Building management: Body corporate management fees, accounting, meeting costs
• Utilities: Water for common areas, lift electricity, common lighting
• Long term maintenance fund: Contributions toward future major repairs
• Contingency or capital improvement funds: Optional funds for emergencies, unforeseen expenses or improvements

A budget for the coming year is usually established at the AGM, and the body corporate decides payment dates and amounts. The amount each owner pays is generally calculated using utility interests, which may be the same as ownership interests unless the unit plan documentation or body corporate decision says otherwise.

How Utility And Ownership Interests Work

Unit Titles Services distinguishes between ownership interests and utility interests. Ownership interest reflects your share of the value of the whole property complex. Utility interest is used to calculate how much you contribute to body corporate operational costs and levies.

For example, one unit may have a higher utility interest than another if the unit plan or later reassessment allocates a greater share of costs to it. Some interests can relate to services or amenities used by particular units, so check the title documents and disclosure material rather than assuming costs follow floor area alone.

• Your share of body corporate levies and some shared costs
• Your voting position at body corporate meetings, subject to the Unit Titles Act and voting rules
• Your ownership interest in the wider property complex
• Your share if common property or the whole development is dealt with under the Act

Ownership interests are set by a registered valuer when the unit plan is deposited, while utility interests are used for operational costs and can sometimes be reassessed by special resolution. If a cost allocation seems wrong, check the unit plan, title records, body corporate minutes and legal advice before assuming it can be changed.

The Long Term Maintenance Plan

All bodies corporate must maintain a long-term maintenance plan covering at least 10 years. Large unit title developments with 10 or more principal units must have a 30-year plan, with detailed costings for the first 10 years and higher-level planning for years 11 to 30.

A long-term maintenance plan helps identify future maintenance, estimate costs, support long-term maintenance funds, provide a basis for levying owners and guide annual maintenance decisions. The long-term maintenance fund can only be used for spending related to the plan, but it does not have to fully cover all anticipated costs.

Be cautious of low levies without checking the long-term maintenance plan, fund balance, insurance summary, meeting minutes and planned works. Low levies may reflect limited common property, but they may also mean future work will need different funding, extra levies or borrowing.

Additional Levies: The Unexpected Bills

Additional levies or special funding calls may be used where costs exceed normal levy provisions or available funds. They might arise from:

• Major repairs not adequately covered by the long term maintenance fund
• Unexpected building defects or failures
• Earthquake strengthening requirements
• Legal costs from disputes or litigation
• Insurance claims where the excess exceeds available funds
• Weathertightness remediation for leaky buildings

Additional levies can range from small amounts for unexpected repairs to much larger sums for major remediation work. Owners have limited ability to ignore a valid levy: the Unit Titles Act says unpaid levies and reasonable collection costs are recoverable as a debt, and interest may accrue on unpaid amounts.

How Additional Levies Are Decided

Additional levies and major spending decisions should be checked against the Unit Titles Act, the body corporate rules, the budget, meeting notices and the resolutions passed. Some matters are ordinary-resolution decisions, while others require a special resolution, so the threshold depends on the decision being made.

Once approved, each owner's share is generally calculated according to the relevant utility or ownership interest and the resolution. Payment terms vary. If you cannot pay, unpaid levies and reasonable collection costs are recoverable as a debt, and unit title disputes about unpaid levies may go through the Tenancy Tribunal or courts depending on the claim and issue.

• Attend body corporate meetings to understand upcoming costs
• Review the LTMP and check the long term maintenance fund balance
• Ask questions about any planned major works before buying
• Consider keeping a personal buffer for unexpected levies if it fits your wider budget
• Check whether the development must have, or has chosen to have, professional body corporate management

Due Diligence Before Buying

A useful protection against surprise body corporate costs is thorough due diligence before purchase. Request and review:

• Pre-contract disclosure statement: sellers must provide this before the buyer signs the sale and purchase agreement, and it includes specified financial, maintenance, governance and insurance information where available
• Pre-settlement disclosure statement: Updated information closer to settlement
• Body corporate financial statements: Check fund balances and any outstanding levies
• Meeting minutes: Unit Titles Services says the PCDS includes general-meeting and committee notices and minutes for the last 3 years, subject to permitted redactions
• Long-term maintenance plan: check the plan, next review date, funding sources, proposed work and whether the fund balance matches upcoming needs
• Body corporate rules: Understand what restrictions apply to your unit use

Pay particular attention to buildings approaching major maintenance milestones, such as roof replacement, lift modernisation or facade remediation. If these items are in the long-term maintenance plan but funds are insufficient, ask how the body corporate expects to pay for the work.

What Happens If You Cannot Pay?

Body corporate levies and additional levies should not be ignored. Non-payment can have legal and cost consequences:

• Interest may accrue on unpaid amounts
• Unpaid-levy disputes and other unit title disputes can go to the Tenancy Tribunal, with courts handling higher-value or excluded matters
• Reasonable collection costs can be added to unpaid levies
• The issue can escalate into formal debt recovery if it is not resolved

If you are struggling to pay an additional levy, contact the body corporate or body corporate manager early, check the resolution and payment terms, and get legal or budgeting advice if needed. If there is a genuine dispute, use the unit title dispute process rather than ignoring the invoice.

Budgeting for Body Corporate Living

When assessing affordability of a unit title property, factor in body corporate costs alongside your mortgage. Current levies are only one input; look at the long-term maintenance plan, funding sources, fund balances, insurance summary, meeting minutes and planned works to understand likely future costs. A personal buffer can help, but the right amount depends on your budget and risk tolerance.

Body corporate living offers benefits including shared maintenance responsibilities and access to shared facilities. It also means shared costs, legal obligations and collective decision-making. Understanding levies, long-term maintenance planning, disclosure statements and dispute pathways helps you participate more effectively and budget for unit title ownership.