Question: If strata levies have been raised for a project such as painting, must the funds be used for that expense?
Our strata raised a special levy last year for $9,000 for painting. We all paid the special levy but it was used for other expenses. We have received another notice for us to pay a special levy for painting, this time for $15,000.
I contacted our strata manager and raised my concerns requesting that this special levy be used for painting. They’ve responded that they can not guarantee that no as other expenses may arise. Is this legal?
Answer: There is nothing in the Strata Schemes Management Act 2015 that regulates a special levy can only be used for particular works.
There is nothing in the Strata Schemes Management Act 2015 that regulates a special levy can only be used for particular works.
Part 5, Division 1 & 2 of the Strata Schemes Management Act 2015 specifies how levies can be raised and how they are dealt with.
Unfortunately there are often unexpected repairs and costs in a strata scheme and if the Capital Fund balance is low (as the amount of the special levy would indicate in your case) then it may have been required for another more urgent purpose.
The second special levy must however be raised at a General Meeting of all owners and as an owner you can raise your concerns at that meeting and there should be a motion on the agenda giving owners the right to consider placing restrictions on the Strata Committee under Section 36(3) of the Strata Schemes Management Act 2015. This might assist in ensuring owner have the right to determine the spending of the funds raised.
The vote for a special levy is a simple majority and so if sufficient owners are opposed to another special levy it will be defeated.
Noting the above comments I should advise that Section 36 (2) of the Strata Schemes Management Act 2015 specifies that the decision of the Owners Corporation prevails over that of the Strata Committee. So it depends upon how the motion was originally passed to raise the special levy and what wording was used.
This post appears in Strata News #533.
Robert Fothergill Strata Life E: Robert@thestratalife.com.au P: 02 9456 9917