This Q&A about the payment of special levies has been answered by Andrew Terrell, Bright & Duggan.
Question: I understand when my levies are due for payment. Does the 30 day required notice period apply to Special Levies?
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The NSW STRATA SCHEMES MANAGEMENT ACT 2015 – SECT 83 states:
- Any contribution levied by an owners corporation becomes due and payable to the owners corporation on the date set out in the notice of the contribution. The date must be at least 30 days after the notice is given.
I understand when my levies are due for payment. Does the same apply for special levies? Does the 30 day required notice period apply?
Answer: Yes, it does, the key word being ‘Any’.
Yes, it does, the keyword being ‘Any’.
What is a Special Levy?
For a detailed explaination, take a look at this video by Michael Ferrier, Eyeon Property Inspections.
Question: Levies paid in advance are withheld to be used in the period they fall due. Is this normal practice?
Our strata scheme pays levies quarterly and sometimes some owners pay the entire year’s levies in advance, eg, in the first quarter.
Whilst those advanced funds are strictly accounted for by our strata manager company, they are not released for expenditure until the date of the quarter in which they would be due had they not been paid in advance. Is this normal practice? Is this a practice subject to negotiation or is it governed by NSW strata legislation?
With maintenance having been neglected in years past, we are experiencing quarterly cashflow problems in spite of dramatically increasing levies. Use of funds paid in advance could assist getting through the financial year without having to call for a Special Levy.
Answer: Any levies paid in advance will sit in the owners corporations funds and be accounted for on the balance sheet under ‘levies paid in advance’.
This doesn’t quite make sense. Any levies paid in advance will sit in the owners corporations funds and be accounted for on the balance sheet under ‘levies paid in advance’ or similar. The money will show as paid on the owners ledger and as each levy falls due, will be accounted for.
It is not uncommon that in the event of cash flow issues, owners might be called by the owners corporation to pay their levies prior to due date and that is a matter for each owner.
Have a question or something to add to the article? Leave a comment below.
Read More:
- NSW: Capital Works Funds: What’s new….
- NSW: When are you an unfinancial lot owner? What effect does this have?
- NSW: Q&A Can I Reduce My Strata Levies By Doing My Own Mowing?
This post appears in Strata News #236
Andrew Terrell
Bright & Duggan
E: [email protected]
What are Special Levies?
NSW Fair Trading, on their Levies and Capital Works Funds page, provides the following definition:
Owners corporations can vote to introduce a ‘special levy’, which can sometimes be a large amount. Special levies can be sought where there are insufficient funds to cover large capital works or unforeseen works, for example, to carry out major repairs to the common property.
They are calculated according to the lot entitlement of each lot owner.
Visit Your Strata Levies OR NSW Strata Legislation.
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