Body Corporate Debt Recovery Lawyers in Melbourne

When one owner stops paying, the rest of the building pays instead

Your owners corporation runs on levies. Insurance, common-property maintenance, the manager’s fees, the lifts and the lighting all come out of the same pool, and the law does not let the building’s obligations pause because one lot owner has stopped contributing. Every quarter a defaulter is carried, the paying owners are quietly funding their share.

The good news is that Victorian law makes levy recovery one of the more certain debt claims there is. The amount is fixed by the fee notice, the defaulter’s identity is on the register, interest and recovery costs are claimable, and the debt is secured by an asset that cannot be driven away: the lot itself.

If your owners corporation or manager is carrying arrears, call MK Law on 1800 130 120. The first call is free, and we act for owners corporations of every size as well as for lot owners on the other side of these disputes.

The sequence is mandatory and shortcuts cost the OC money. Fee notice, 28 days, final fee notice, 28 more days, then VCAT. An owners corporation that skips a step, charges interest no general meeting ever authorised, or files in the wrong forum can watch an otherwise certain claim fall over on procedure. Most of the levy files we are asked to rescue had a solid debt behind them and a broken process in front of it.

The recovery path: two notices, then VCAT

Fees fall due 28 days after the fee notice issues. Once an owner is overdue, the owners corporation may issue a final fee notice, which is a formal demand stating the arrears, the penalty interest applied, and the intention to take legal action if the full amount is not paid within a further 28 days. A final notice on law firm letterhead resolves a large share of files on its own, for the same reason a letter of demand does in ordinary debt recovery: the owner can see that the next step is real.

If the arrears survive the final notice, we file a fee-recovery application at VCAT claiming the unpaid levies, penalty interest of up to 10 per cent a year where a general meeting has authorised it, and the reasonable costs of recovery. VCAT is where these claims start, and the Magistrates’ Court’s role arrives at enforcement if the owner ignores the VCAT order. From there the usual enforcement tools apply against the owner, and the lot itself stands behind the debt at settlement whenever the owner sells or refinances.

What we actually do on these files

Managers and committees usually hand us a spreadsheet of arrears and a difficult owner. We check the fee notices and the interest resolution, issue the final fee notice correctly, run the VCAT application, and enforce the order if it comes to that. Where the owner raises a genuine dispute about a special levy or about the OC’s own compliance, the file stops being a recovery and turns into one of the body corporate disputes we run on the property side, and we tell the committee honestly how it will land before more money is spent. Chronic defaulters get a firmer strategy, including recovery timed to a sale of the lot, where the arrears, interest and costs are paid out of settlement. Lot owners who come to us in arrears are usually behind on more than levies, and if an ATO debt is part of the picture our tax debt lawyers look at that side of it on the same file.

Costs discipline matters more here than in most debt work, because the law’s promise that the defaulter pays reasonable recovery costs only holds where those costs were in fact reasonable and properly documented. We document the work at every stage so the committee can show every owner where the money went, and claim it back.

Talk to us before the next levy notice goes out

Whether you are a committee member, a manager with a portfolio of arrears, or a lot owner staring at a final fee notice, the position gets cheaper to fix the earlier you call. Phone 1800 130 120 or use the form on this page. For the wider toolkit behind these claims, see our debt recovery lawyers page, and if a defaulting owner is heading toward insolvency, our insolvency lawyers can protect the owners corporation’s position in the queue.