The recent District Court decision of Body Corporate for Mount Saint John Industrial Park CTS v Superior Stairs and Joinery Pty Ltd  QDC 245 has provided authority for the proposition that a Body Corporate must start legal proceedings within two years and two months of the debt becoming due, lest the Body Corporate be barred from taking any recovery action at all.
Section 145 of the Body Corporate and Community Management (Standard Module) Regulation 2008 (and equivalent sections in the other regulation modules) provides that if a contribution instalment has been outstanding for two years, the Body Corporate must within two months from the end of the two year period, take action to recover the amount. However, it was previously accepted across the industry that in accordance with the Limitations of Actions Act, a Body Corporate has six years to recover outstanding levies. Unless this decision is overturned on appeal, Body Corporates will now need to carefully monitor any levies which have been outstanding for close to two years and two months and commence proceedings before the expiration of that time period.
Body Corporates will need to establish new debt management procedures to ensure they take action before the expiration of two years and two months from the contribution levy being unpaid when due. In the immediate future, Body Corporates should undertake an urgent review of all outstanding levies to ensure proceedings are commenced within the two years and two month timeframe.
If you require assistance or further information please call Shane Devenish on 07 4081 7111.