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The timing for body corporate debt recovery proceedings is clarified

01 Aug 2018

The confusion over the time limit a body corporate has to commence recovery proceedings for body corporate debts has been clarified by the Court of Appeal.

Section 145(2) of the Body Corporate and Community Management (Standard Module) Regulation 2008 provides that:

‘If the amount of a contribution or contribution instalment has been outstanding for 2 years, the body corporate must, within 2 months from the end of the 2-year period, start proceedings to recover the amount.’

A decision of the District Court had interpreted that section to mean that if a body corporate did not commence recovery proceedings within that time frame that it was statute barred from doing so.

The Court of Appeal in this decision has restored the previous industry-wide interpretation that while a body corporate is obliged to commence proceedings within that two years and two months, it does not lose the right to do so if the proceedings are not commenced in that time.

That right is capped only by the Limitation of Actions Act 1974 to six years.

If you need help with debt recovery, let us know.

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