SA lot owners are wondering how to raise a special levy.
Question: What is the procedure for raising a special levy in a community strata corporation? Is it necessary to call an Extraordinary General Meeting?
Answer: While the Act does not specifically address raising special levies, it is common practice for body corporate managers to impose special levies when unexpected costs arise and funds are insufficient.
The Community Titles Act mandates that contributions be fixed at general meetings, specifying that this can only be done at such meetings and not by the committee. My interpretation is that this pertains to the regular contributions raised following the presentation of the corporation’s annual budget.
While the Act does not specifically address raising special levies, it is common practice for body corporate managers to impose special levies when unexpected costs arise and funds are insufficient. This underscores the importance of ensuring corporations contribute adequate funds to cover unforeseen expenses.
Given the current cost of living challenges many owners face, many corporations are hesitant to increase their regular contributions. This reluctance can lead to situations where corporations are unable to cover everyday expenses or save for emergencies. It is the responsibility of body corporate managers and committees to act in the corporation’s best interests, ensuring the property is well maintained, and emergency works are arranged as needed. Managers and committees often raise special levies to minimise further costs and address emergencies promptly.
I recommend that each community corporation authorise their committee to approve special levies during meetings to ensure the corporation remains solvent.
The Community Titles Act differs from the Strata Titles Act. The Strata Titles Act explicitly allows corporations, by ordinary resolution, to levy contributions against all unit holders and grants the committee the authority to execute decisions requiring an ordinary resolution.
Carrie McInerney
Horner Management
E: carrie@hornermanagement.com.au
P: 08 8234 5777
This post appears in Strata News #705.
Have a question about how to raise a special levy in SA or something to add to the article? Leave a comment below.
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This article is not intended to be personal advice and you should not rely on it as a substitute for any form of advice.
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Dear P. Ng,
I am unsure if there are restrictions or conditions placed on the financial assistance from the government . I would suggest that you refer to the terms of the financial assistance to see if there specific rules around the use of the funding.
The owners corporation raised a special levy to comply with ministerial directives that were also reinforced by amendments to the relevant building construction act to replace flammable cladding. After completion of the works, the owners corporation received a government financial assistance specifically for the cladding remediation works. The owners corporation refused to use the grant to reduce the total cost of the remediations works but planned to use the grant for some yet to be finalised capital works. Is this in breach of the regulations relating to the grant and would result in the grant being revoked for false representation when the grant was applied for?