Question: We received an email about paying a special levy. The levy is required because the owners corporation has cash flow issues. Does the OC need to hold an AGM to get an ordinary resolution before sending a special levy notice?
Answer: Confirm where the authority came from to raise the levy if you have concerns about the process.
There are several scenarios where a special levy can be raised, and these are covered under Section 24 of the Owners Corporations Act 2006.
In short, an ordinary resolution must be passed by the owners corporation in order to raise a special levy, provided the levy to be raised is not more than twice the total amount of the current annual fees set under Section 23. Ordinary resolutions can be passed by all the owners, either at a General Meeting or by ballot. They can also be passed by a committee, at a meeting or by committee ballot. Most of the time, the committee will make these decisions based on the information they have at hand.
On some occasions, and where necessary, the manager may be authorised to raise a special levy in the event cash falls below a threshold or a specific number. This is not typical but does happen where there is authorisation through the Contract of Appointment or a delegated authority – maybe at the AGM.
It’s important to check these points and confirm where the authority came from to raise the levy if you have concerns about the process.
Joel Chamberlain
Horizon Strata Management Group
E: joel.chamberlain@horizonstrata.com.au
P: 03 9687 7788
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