What Happens When You Don’t Pay Body Corporate Fees in Melbourne

Living in a shared property setup like a townhouse, apartment, or unit complex comes with a few ground rules. One of the biggest? Paying your body corporate fees on time. These payments keep everything ticking over—gardens trimmed, lights on, bins collected, repairs done. But what happens when you don’t pay?

If you’re part of a body corporate in Melbourne, this is what you need to know.

What Are Body Corporate Fees?

Body corporate fees—sometimes called owners corporation fees—are regular charges each owner must pay in a strata building. They fund the upkeep of common areas, cover building insurance, and ensure admin runs smoothly. You’re not paying for services in your own unit—you’re helping cover shared responsibilities.

These costs are divided based on your lot entitlement. Bigger lots or units often pay more. The fee amount is reviewed annually at the AGM and adjusted as needed.

To better understand how fee shares are calculated, the breakdown of body corporate fee responsibilities in Melbourne offers some useful insight.

What Happens If You Miss a Payment?

Most bodies corporate give you a grace period. If you miss it, you’ll get reminders. But after that, things get serious fast. Late fees start. Interest kicks in. Then, debt collectors might be brought in.

It doesn’t stop there. Owners corporations can:

• Take you to VCAT (the Victorian Civil and Administrative Tribunal)
  
• Apply for a court order to recover the debt
  
• Put a legal charge over your property
  
• Force the sale of your unit if things escalate
  

Once legal action begins, it’s not just the original debt you owe. Interest and legal costs stack on top. A $2,000 debt can turn into $5,000 by the time it’s resolved. It adds pressure and damages your relationship with your neighbours.

What the Law Says About It

In Victoria, it’s the law: all owners must contribute to common expenses. There’s no opt-out option. Section 28 of the Owners Corporations Act 2006 gives your body corporate legal power to recover unpaid fees.

If the issue goes to VCAT, and the tribunal rules in favour of the body corporate, the decision is enforceable. Still refusing to pay? The case can be escalated to court, and your property could be at risk.

If you’re unsure where you stand legally, decoding body corporate laws every Melbourne owner should know can help bring clarity to your obligations.

The Ripple Effect on Your Community

Skipping payments doesn’t just affect you—it hurts everyone in your building. When funds fall short, services stop. The lawn gets overgrown. Hall lights flicker. Rubbish piles up. Building value drops.

That’s when the blame starts. Other owners get frustrated. Committee members have to deal with the fallout. It creates a hostile environment.

If more than one person falls behind, the body corporate might increase fees for everyone else. Or delay essential repairs. That means more problems, more costs, and growing tension within the group.

Case Study: When $3,200 Became $7,050

A unit owner in Brunswick ignored four quarterly fee notices. At first, the unpaid amount was $3,200. But by the time interest, legal fees, VCAT costs, and debt recovery charges were added, the bill exploded to $7,050.

The case went through VCAT. When the owner still didn’t respond, the matter was escalated. The sheriff prepared to enforce the ruling through property seizure. At the last minute, the owner paid in full—but the damage was done. It took two years, cost double, and caused unnecessary stress.

This story is common. It’s not about being wealthy. It’s about being proactive.

If You Have a Dispute, Speak Up

Many people withhold payments because they’re frustrated—maybe they think the fees are too high, or the building isn’t maintained properly. But ignoring the invoice is never the answer.

Instead, you can:

• Raise concerns with your strata manager
  
• Ask for a special general meeting
  
• Join the committee to have your say
  

If all else fails, VCAT allows you to challenge unfair decisions. But don’t let frustration turn into debt. There’s always a better way forward, and how to resolve body corporate conflicts and disputes outlines that path clearly.

Struggling? Payment Plans Work

Life throws curveballs—job loss, illness, rising costs. If you can’t pay, ask for a payment plan. Most managers are happy to help if you act early and communicate clearly.

Here’s how to do it right:

1. Contact your manager in writing
   
2. Offer a fair plan—weekly or monthly payments
   
3. Stick to what you promise
   
4. Keep records of all communication
   

A payment plan won’t erase the debt, but it keeps things calm and avoids legal escalation. It’s a show of good faith—and that’s key.

Trying to Sell? Fees Follow You

Thinking of selling your property while fees are unpaid? Think again. Body corporate debt sticks with the lot, not just the person. That means it must be paid before or at settlement.

Buyers often do their due diligence. If they see a fee debt, they might:

• Ask for a discount
  
• Delay the deal
  
• Pull out entirely
  

It gets worse. If the debt is registered with a debt collection agency, it can show up on your credit report. That impacts your ability to get loans or even rent a property later.

What Happens to Repeat Offenders?

If you’re behind on fees often, you could lose certain rights. For example, you may be unable to vote at AGMs until your balance is cleared. This weakens your voice on key issues like budgets, upgrades, and policy changes.

In severe cases, the owners corporation can apply for a legal charge on your property. They can also seek orders to force a sale. These aren’t empty threats—they’ve happened before.

A pattern of non-payment affects your reputation and your investment. It paints a picture of someone who doesn’t take ownership seriously.

Tips to Stay on Top of It

Keeping up with your fees isn’t hard if you plan ahead. Use these simple tips:

• Schedule direct debit payments
  
• Keep your contact info up to date
  
• Budget for fees every quarter
  
• Save your notices and check the due dates
  

Also, attend your building’s AGM. That’s where decisions about budgets and fees are made. If you think fees are too high, that’s your chance to speak up.

FAQs

1) Can the body corporate cancel fees or give discounts?
Not really. Fees are set by vote and must be paid by all owners. They’re not flexible like a subscription service. Even if you don’t use common areas or disagree with a decision, you still need to contribute.

Discounts or waivers may be considered on a case-by-case basis, usually if you’ve entered a payment plan or settled a large overdue amount. But that’s rare. Fee structures follow strict rules, and changing them requires a special resolution.

2) What happens if I don’t pay before selling my unit?
Unpaid fees must be settled before settlement. Your conveyancer will include the debt as part of the statement of adjustments. That means the outstanding amount is taken out of your proceeds.

If a buyer discovers the debt and wasn’t told about it, they may have legal grounds to challenge the sale or demand compensation. It can also delay the process, affecting your timeline.

Best move? Pay the debt ahead of time, or disclose it clearly and plan for it to be handled during the transaction.

3) Are tenants responsible for body corporate fees?
No, tenants do not pay body corporate fees. These are the landlord’s responsibility. The tenant might benefit from services funded by the fees—like cleaning or maintenance—but they don’t get billed for them.

That said, poor fee management by the landlord can affect the tenant’s experience. If fees aren’t paid, services may stop, which can lead to complaints or even rent reductions.

Landlords should always stay on top of their responsibilities to avoid tenancy issues.

4) How quickly can legal action start for unpaid fees?
After 30 days, some bodies corporate start charging interest. After 60 to 90 days, they may refer your case to a solicitor or debt recovery agent. The next step is VCAT.

If the issue continues past that point, legal costs and interest grow fast. By 6 months in, the bill can double. Acting early—either by paying or arranging a plan—is always the smarter, cheaper option.

5) What if I disagree with how fees are used?
You’re still obligated to pay, but that doesn’t mean you’re powerless. Attend the AGM, raise questions, and vote on the budget. Better still, join the committee and shape the future decisions.

If you believe the fees are being misused or the charges are unlawful, you can apply to VCAT for a ruling. But withholding payment without following process just causes legal drama.

Constructive involvement is the best path forward.

Stay Ahead or Fall Behind—It’s Your Call

Owning property in a strata setup means playing by the rules. That starts with paying your body corporate fees. These fees aren’t just bills—they protect your investment, keep your building in shape, and hold the community together.

Refusing to pay costs more in the end. It risks legal action, financial pain, and lost opportunities. Stay informed, stay involved, and when things get tough, speak up early.

Want a body corporate manager who gets it right and helps you stay on top? Head to Keystone Strata Group and see how stress-free strata living can be.

To learn more, please call us today on (03) 9007 2572 or leave an enquiry.