Question: An owners corporation has sharply increased levies to build up its capital works fund, straight after a special levy. Is that justifiable?
Our levies are going up significantly to boost our capital works fund, which has around $30,000 in it. Owners have just finished paying a special levy of $3,000 per quarter for other common property works.
I feel this is unreasonable, disproportionate and unfair. The block was built in the 1970s and work is needed, but smaller increases over time would be more sensible and manageable. Are increases like this justifiable, and what do you suggest?
Answer: Substantial levy increases can be justifiable, because the owners corporation has a strict duty to maintain common property and cannot defer work to make it more affordable.
Are substantial strata levy increases justifiable?
The short answer is yes, they can be. Whether they’re justifiable in your building is a decision for the owners corporation as a whole, not for any individual owner.
Each year, the owners corporation estimates what its administrative fund and capital works fund need, taking into account its 10-year capital works fund plan. It then sets contributions (levies) at a general meeting, usually the AGM. Owners decide this by ordinary majority, not special resolution. When expenses arise that the funds can’t cover straight away, the Act says the owners corporation must levy a contribution on each lot owner in the strata scheme, decided at a general meeting. Once a decision is properly passed, it binds every owner, including those who voted against it.
What drives all of this is section 106 of the Strata Schemes Management Act 2015 (the Act). It says the owners corporation must properly maintain and keep the common property in a state of good and serviceable repair. This is a strict duty. It is not enough for an owners corporation to say it acted reasonably, took steps to prepare to address the issue, intended to address it later, or that it can’t afford the repairs. The Act allows deferral only in narrow circumstances, such as while the owners corporation pursues the person responsible for the damage, and then only if safety and access aren’t affected. “We’ll spread the work out so it’s more affordable” isn’t one of them.
“Sensible and manageable” also depends on where you’re standing. For an owner on a tight budget, it may mean stretching works over several years. For an owner with water coming through their ceiling, it means fixing it now. Delay carries its own cost: an owner of a lot in a strata scheme may recover from the owners corporation, as damages for breach of statutory duty, any reasonably foreseeable loss suffered by the owner. Any such claim is ultimately funded by all owners. A 1970s building with around $30,000 in its capital works fund may simply be catching up on years of underfunding. Nobody outside your building can say whether the timing is right.
If you want to engage with the decision, rather than simply object to it:
- Ask to see the 10-year plan, reports and quotes behind the increase.
- Raise the payment schedule at the meeting. Contributions can be set as regular instalments, which may ease the pressure without delaying works.
- If you’re struggling to pay, speak to the owners corporation early about a payment plan.
- If you genuinely believe the amount is more than the owners corporation needs, you can seek mediation through NSW Fair Trading and, if that fails, apply to NCAT under section 87 for an order varying the contributions. Disagreeing with the pace of works is unlikely to be enough on its own.
Every building’s circumstances differ, so consider getting independent legal advice before taking any formal action.
This post appears in the November 2026 edition of The NSW Strata Magazine.
Tim Sara
Sara Strata
E: tim@sarastrata.com.au
P: 04 8500 7960
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