A special levy can only be approved at a general meeting (annual or extraordinary). It must be accompanied by a proposal or quote of the scheduled works, and a repayment schedule that includes the amounts each lot is due to pay and by what date.
Most special levies are approved by ordinary resolution however some require either a special resolution or resolution without dissent, depending on the type of work or improvement being considered.
Special levies are calculated the same as your administrative and sinking fund levies – they are determined by the owner’s individual contribution schedule lot entitlement (CSLE).
Special levies may be recovered in one repayment cycle or can be set out over multiple levy periods across several financial years of the body corporate. This is usually done to make the repayments more manageable.
If the motion approving a special levy is carried out at a general meeting, all owners are required by law to meet the repayment schedule of the special levy, regardless of whether you receive a direct benefit from the works being funded by the levy or not.
Remember, if you are experiencing difficulties paying special or even normal levies, speak to your body corporate manager to explore the alternatives. There may be payment plan options available.
Occasionally a special levy will be issued even when there are sufficient monies in the sinking or administrative funds. Why – because the work in question won’t have been allowed for in the sinking fund forecast as mentioned earlier in this article.
For example, the current sinking fund balance is $100,000. The body corporate has allocated $20,000 for pool repairs, $10,000 for a new fence and $70,000 to resurface the driveway. If unexpected repairs on the pool rise to $30,000, the body corporate is obligated to recover the additional $10,000 via a special levy.
If a special levy is not issued, the body corporate is spending sinking fund money allocated to other capital expenses which is not lawful.
