Special Levy a few weeks after settlement

joball – despite some obvious unknowns, I’ll try to address your concerns in order and on the basis that the matter is as required being determined at a General Meeting of the Owners Corporation:

1) If it’s the repairs to Lot 3’s roof that the proposed special levy is intended to fund, then presumably the Owners Corporation (O/C) has received advice about the need for and the timing of those repairs that overrides whatever was referred to in the Strata Report that you obtained. So that advice should be provided with the Agenda for the General Meeting.

2) See above.

3) Presumably the repairs already made to other roofs were as a result of some damage that’s progressively arisen over time as opposed to as a consequence of a point-of-time event such as from a storm, and as such they’d not be covered by the O/C’s building insurance.

4) As you’ve advised that the proposed work is to replace the damaged roof, then it should be paid for from the Sinking Fund, but in the event that it’s actually a “fix” (i.e. a repair) then funds should be sourced from the Administrative Fund. It’s largely irrelevant really, as a combination of monies from both Funds may be used provided the O/C determines within three (3) months of that happening how, and within what timeframe such a “borrowing” from one Fund to the other will be repaid.

5) I’m not aware of any formal means by which a Proprietor’s term of ownership can be used to “adjust” their contribution to a special levy that arises post-settlement. As with all levies, Proprietors’ contribute in accordance with the units of entitlement of their Lot/s, but you could of course make your case at the Meeting in that regard and see how it’s received.

6) It’s up to those voting at the Meeting (including by proxy) to determine the amount of the special levy, over what term it will be collected, and by what installment/s, but if after making your point/s at the Meeting you believe that the decision taken is unreasonable in any respect given all the considerations that you’ve raised here, then you can apply for mediation of the issues by the NSW Dept. of Fair Trading, and if that doesn’t satisfy then you may seek Orders in the NSW Civil and Administrative Tribunal to have the amount of your contribution and/or the timing of its collection varied under the provisions of Sect 149 of the NSW Strata Schemes Management Act (SCMA).

7) Strata Schemes having >100 Lots must obtain at least two (2) quotations for works having a cost >$30,000.00, but beyond that and irrespective of the numbers of Lots in the Scheme, it’s up to those Proprietors in attendance at each Annual General Meeting to impose such requirements and any around the ability of their Executive Committee to routinely commit expenditure on budgeted items without referral to all Proprietors (at a General Meeting).

Regarding your note, Sect 75A of the SSMA requires O/C’s to prepare a rolling plan of anticipated works and the estimated cost and timing of those over a ten (10) year period, and to review that after five (5) years in order to ensure that adequate funds are collected and held in its Sinking Fund to meet those costs. Of course that doesn’t account for unforeseen incidents, but that’s what insurance is for!

One final point from me ……. if the O/C has insufficient funds to undertake the works in its preferred timeframe, then with interest rates at historically low levels, borrowing by the O/C may be a better option than it raising a special levy. There are specialist firms that both investigate the viability of and provide this service, of which THIS is one (and a sponsor of FlatChat).

Hope all that helps.