Question: How can an owners corporation make sure special levies raised now are only spent on the intended remedial works years later?
We need to raise special levies to carry out remedial work on our building in phases.
When we introduce the special levies, how can we make sure that two years down the track, the money will only be used for the intended remedial works?
Answer: Nothing stops a later resolution redirecting the funds, but a clearly worded special levy resolution and project-based reporting make it much harder to divert them.
In short, the Strata Schemes Management Act 2015 (NSW) contains no specific provision allowing an owners corporation (OC) to restrict or set aside funds by resolution in a manner that prevents a subsequent AGM or EGM resolution from varying or overturning that allocation. However, a clearly worded special levy resolution (see step 2 below) and project-based reporting make it much harder for funds to be informally diverted and provide a strong audit trail.
Where funds are intended to be used for a specific purpose, the OC may take the following steps:
Step 1: Obtain scope of works and cost estimates
Before convening a general meeting, the OC must obtain a detailed scope of remedial works from a suitably qualified consultant. In this instance, the scope should be broken down into phases, with estimated costs provided for each phase, to ensure that the proposed works and associated cost estimates are clear.
Step 2: Prepare a specific resolution and convene a general meeting
The next step is to convene a general meeting and pass a resolution to ensure that special levies are applied for their intended purpose (being staged remedial works). The resolution from the general meeting should:
- describe the specific remedial works in detail (scope of works, stages, and estimated cost for each stage of works);
- state expressly that the levy is raised solely for those identified works;
- clearly specify that the contribution may be paid in periodic instalments if desired (section 81(5)) aligned with the project stages;
- specify that a separate bank account be opened (if appropriate);
- maintain a separate ledger for account sub-account for the special levy purposes;
- include a term that any surplus remaining after completion of the works is not to be applied to other purposes without a further resolution of the OC at a general meeting.
Step 3: Issue levy notices
Issue a levy notice on each owner by giving written notice of the contribution payable (section 83(1)), specifying the due date, at least 30 days (not emergency repairs) after the notice is given (section 83(3) and section 83(3A)).
This post appears in the November 2026 edition of The NSW Strata Magazine.
Mia Haas Construction Legal E: mhaas@constructionlegal.com.au
