Last year the Queensland Government made amendments to the State’s body corporate legislation with the purpose to alleviate the financial burdens brought on by the Covid-19 pandemic.
Originally due to expire on the 31st of December 2020, these changes were extended, and lot owners will continue to receive financial relief until the 30th of April 2021.
What were the changes?
The most significant financial changes were:
- the process of levying contributions to reduce the financial burden on owners;
- the composition of sinking fund and sinking fund budgets; and
- increasing the borrowing limit for schemes.
These changes are now due to expire on 1 May 2021.
Changes to the process of levying contributions
From 1 May 2021…
- Committees will be unable to extend the due date for the payment of levy instalments until the end of the financial year;
- Owners will once again be liable for penalty interest for late payments of contribution instalments except for any payments that fell due between 25 May 2020 and 30 April 2021 (the emergency period). Any payments due between those dates will not attract penalty interest even if they remain outstanding after 30 April 2021.
- Bodies corporate are once again obligated to recover unpaid contributions that are more than 2 years overdue and the suspension of this obligation has been lifted.
Requirement to commence recovery proceedings
The re-introduction of the statutory requirement to commence recovery proceedings could result in significant and urgent work for Bodies Corporate.
There could be a substantial accumulation of unpaid levies that, if not paid promptly, could have serious ramifications, including the appointment of administrators.
Bodies Corporate should be assessing these risks now, remembering that recovery proceedings can still be commenced before 30 April 2021 if necessary to ensure (amongst other things) that the scheme remains solvent and is able to pay its administrative costs on time and in full.
Covid-19 amendments allowed bodies corporate to adopt a sinking fund budget for the current financial year that did not meet the usual requirements to provide for capital expenditure for the next 9 years.
From 1 May 2021 the scheme’s sinking fund budget must once again include all major expenditure and committees will no longer be able to adjust the sinking fund to remove or reduce anticipated major expenditure amounts.
The Covid-19 amendments to body corporate legislation made it easier for a body corporate to borrow money. It effectively allowed many schemes to have a borrowing limit double what it was pre-Covid-19.
From 1 May 2021, the temporary increase to borrowing limits will expire, returning borrowing limits to pre-COVID-19 levels.
Restricting Common Property Access
The committee has been empowered to restrict access to the common property if reasonably required in order to assist in complying with government health directives, such as quarantine measures and social distancing.
This means committees will no longer be able to restrict access to common property (such as gyms and BBQ areas) without obtaining a general meeting resolution.
Although this may be subject to change from Govt. health directives in the event of another local Covid-19 outbreak.
COVI-19 Amendments Continuing
Some of the Covid-19 amendments are expected to remain in place after the 1 May 2021.
These will most likely include:
- allowing voters to attend a committee meeting or general meeting remotely,
- arranging for voters to vote electronically for motions and committee elections,
- restricting access to common property if reasonably necessary to comply with health directives
Click here for more details about the amendments to QLD’s body corporate legislation.
Please note that this article is not intended to be legal advice and should not be relied upon as such.
If you have any questions regarding the expiry of Covid-19 amendments to body corporate legislation, please do not hesitate to get in touch with a Stratacare body corporate manager.