What is a special levy?

If you are part of a Body Corporate or Owners Corporation, you will hear the words levy and special levy being raised. But what is the difference between a levy and a special levy?

Levy

A levy is also known as a Body Corporate or Owners Corporation fee and is a regular financial contribution made by lot owners that go towards the maintenance of their strata property. Your levies contribute to two funds, the Administration Fund and the Sinking Fund.

The Administration Fund is primarily to cover the re-occurring day to day running costs of the Body Corporate/Owners Corporation such as cleaning, grounds maintenance, electricity for the common area and insurance.

The Sinking Fund is to pay for non-recurring capital expenditure items of the Body Corporate/Owners Corporation such as painting, re-roofing the building(s), resealing the driveway etc. The sinking fund must also maintain a reserve of funds for similar future capital expenses. The projected reserves and required contribution amounts are determined generally by experienced consultants within a sinking fund forecast report.

Special Levy

A special levy is often raised if the Administrative Fund or Sinking Fund do not have sufficient funds to pay for a necessary expense that has not being budgeted.

The other time when a special levy is commonly raised is when there is a deficit of funds in the Administrative or Sinking Fund.

If the Body Corporate/Owners Corporation is faced with a significant expense that has not been forecast, it must levy on each owner a contribution. This is known as a Special Levy. A Special Levy can only be determined at a General Meeting by ordinary resolution.

Practical example

Living in Australia, we all know how unpredictable the weather can be.

If your Strata scheme is damaged by a fallen tree and your Body Corporate/Owners Corporation is required to pay a considerable amount to repair the damages, this is when a special levy will need to be raised.

SSKB aims to educate all owners on the many areas of strata living. If you would like to make the switch to SSKB, click here for an obligation free consultation today.

Click here to watch our video about why your Body Corporate needs SSKB.

Since 1995, SSKB has been the industry leader in strata management. Servicing clients through Queensland, New South Wales and Victoria, we have a broad portfolio of schemes under management and pride ourselves on having the most experienced and skilled management team in the industry.

As a lot owner, you will have access to our expert Client Solutions Team who are on hand to deal with general enquiries. This team works on a “one call resolution” policy, aiming to resolve any issues on your first call to us. The team have a 94% rate of answering questions on the spot. By having our Client Solutions Team assisting lot owners, It allows our Community Managers and Assistants to be on hand to better deal with the requirements of the committee.

How can we help you?

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