Limitation of debt recovery period overturned

In late October 2017 the QLD district court banned body corporates from recovering debts that have been outstanding for more than two years and two months. Following an appeal, this decision was overturned on 31 July 2018 by unanimous vote.

Body corporates now simply have a duty to commence the legal proceedings to recover the contributions within two years and two months. If bodies corporate choose to start proceedings after 2 years and two months it may cause friction with owners but it will not stop the body corporate from recovering the debt.

Kavita Prasad from specialist debt recovery legal firm Kemps Petersons stated, “Given the state’s body corporate laws and practices, it makes sense that the ruling be reversed. However generally, the longer you leave a debt, the harder it becomes to recover as those involved become less motivated. It is important for bodies corporate and body corporate managers to stay on top of levy payments to avoid situations where legal proceedings need to occur”.

“Unfortunately, not all individuals will pay their levies on time and in some cases at all. Should this occur frequently and a large debt begin to accrue, body corporates should seek legal advice. When looking for an expert ensure they have robust negotiating skills as if the matter is taken to court or mediation they will need them.”

Kemps Petersons Legal is a boutique debt recovery and strata specialist legal firm. For more information on Kemps Petersons Legal or for a free-30 minute consult click HERE.