Question: I purchased my apartment at the end of Sept 2021. In Aug 2022 I received a special level of $24K to replace the cladding. At the time of sale, the fire cladding order wasn’t mentioned. Who pays the special levy?
Our building received notice that we would need to replace the cladding as it was unsafe in 2020. I signed a sale note to purchase my apartment in early July 2021 and settled at the end of September 2021.
In August 2022 I received a special level of $24K to replace the cladding as per the order given to the committee in 2020. There was no indication to me at the time of sale that there was a fire cladding order, that it would be the owner’s responsibility and certainly no indication that it would have to be paid in one lump sum.
Is the responsibility for the payment on the previous owner or me?
Answer: Generally, a special levy will be payable by the owner at the time the special levy is raised by the owners at a general meeting.
Thanks for your question. It’s difficult to be very specific without some more information, but generally, a special levy will be payable by the owner at the time the special levy is raised by the owners at a general meeting. We don’t have any information about the date that the owners raised this levy, but we are assuming it was raised after September 2021. In that case, it would appear that you are liable to pay the levy unless there was a specific provision in the contract for sale where the previous owner(s) agreed to pay some future levies.
As an owner you would have had the opportunity to attend the general meeting and contribute to the discussion and voting in relation to the amount and payment schedule for the special levy. Special levies are often raised in instalments to assist owners in managing their cash flow. As this levy is large (we assume it’s $24,000 for your lot, but we don’t know the details of your unit entitlement) it may be possible to approach the strata manager about paying it over a period of time.
This post appears in Strata News #620.
Michael Ferrier Eyeon Property Inspections E: michael.ferrier@eyeon.com.au P: 02 9260 5510