Special Levies in Strata: What Owners Can Do Before, During and After the Vote

The worst special levy is the one that arrives as a surprise.

Not because the money is painless when everyone saw it coming. It is still painful. But a surprise special levy usually means something else has failed first: maintenance planning, records, budgeting, insurance strategy, defect tracking, or owner communication.

Owners tend to hear the words "special levy" and jump straight to the amount. That is understandable. A $4,000 levy and a $40,000 levy are not the same conversation. But the amount is only one part of the question. The better questions are: why now, why this amount, what exactly is it funding, what happens if we vote no, and why was the ordinary budget not enough?

This guide is for owners who have received an agenda with a special levy motion and want to deal with it properly. It is not a way to dodge legitimate building costs. Strata buildings need money to operate, and sometimes a special levy is the only honest answer. The point is to separate necessary levies from lazy ones, urgent repairs from poor planning, and clear motions from blank cheques.

What a special levy actually is

A special levy is an additional contribution raised from owners outside the normal levy cycle. It is usually struck for a specific purpose: urgent repairs, insurance gaps, legal action, defect work, capital upgrades, compliance costs, or a large project that the current funds cannot cover.

In NSW, the Strata Schemes Management Act 2015 requires owners to receive a levy notice before payment is due. Standard and special levy notices usually require at least 30 days notice, while emergency repairs that address a serious and imminent threat may have a shorter notice period. Other states use different wording, but the same practical distinction appears everywhere: ordinary contributions fund the ordinary budget, while special contributions fill a specific funding gap.

That funding gap may be reasonable. A building can discover a failed waterproofing membrane, a corroded fire service, a collapsing retaining wall, or an insurance excess that was not predictable at the last AGM. A special levy can also be a sign that the building kept levies artificially low for years and is now paying for the delay.

The label does not tell you which one it is.

Start with the motion, not the emotion

The motion is the authority the owners corporation, body corporate, strata company or owners corporation manager will rely on later. Read it like a contract.

A useful special levy motion should make these things clear:

• The total amount to be raised.
• The amount payable by each lot, or the method used to calculate it.
• The fund the money will be paid into.
• The purpose of the levy.
• The due date or instalment schedule.
• Whether the levy is tied to a specific quote, scope, report, order or contract.
• What happens if the final cost is lower or higher than expected.

Vague wording is a problem. "Raise a special levy for repairs" is not enough. Repairs to what? Based on which quote? With what contingency? Approved by whom? Paid when?

Good wording does not need to be theatrical. It needs to be specific enough that owners know what they are approving and the committee knows the boundary of its authority.

Ask why the normal funds cannot cover it

Every serious special levy conversation should include the existing fund balances. For most buildings that means the administrative fund and the capital works fund, although state terminology differs.

Ask for:

• The current balance of each fund.
• The amount already committed to invoices, contracts or known liabilities.
• The latest budget.
• The latest capital works or maintenance plan.
• The reason this item was not already funded.

If the answer is "the capital works fund is too low", keep going. Why is it too low? Did the plan miss the item? Did owners vote down realistic contributions? Did the committee ignore the plan? Did insurance or construction costs move faster than expected? Did the building inherit developer defects?

The answer matters because it tells owners whether the special levy is a one-off correction or evidence of a deeper budgeting problem. A one-off correction can be uncomfortable but manageable. A deeper budgeting problem will come back next year with a new name.

Separate urgency from inconvenience

Committees sometimes describe every unfunded problem as urgent. Owners sometimes describe every expensive problem as avoidable. Neither instinct is reliable.

Work through the evidence.

An urgent special levy usually has one or more of these features:

• A safety order, fire order, building order or insurer requirement.
• A leak, structural issue, lift failure, gate failure or service failure that cannot wait.
• A contractor report warning that delay will increase damage or risk.
• A legal deadline.
• A failed system that affects access, safety, habitability or insurance.

A non-urgent special levy may still be sensible. Repainting, roof works, lift modernisation, facade repairs or drainage upgrades can be good decisions before the building reaches crisis point. But if the work is not urgent, owners should expect better planning: multiple quotes, a clear scope, staged timing, and a funding pathway that does not feel like an ambush.

Look for the real cost, not the headline cost

The quote is rarely the whole cost.

For major work, ask whether the special levy includes:

• GST.
• Project management or superintendent fees.
• Engineering, fire, hydraulic or waterproofing reports.
• Access equipment, traffic control or after-hours work.
• Council fees, certification or approvals.
• Contingency for variations.
• Legal review of contracts.
• Insurance excesses or premium changes.
• Temporary resident support, access arrangements or security.

Underfunding a special levy is not kinder to owners. It simply creates a second levy later, usually after everyone has lost patience. The better approach is to show the base cost, show the contingency, and explain what happens to unused money.

Check who pays what

Most special levies are allocated according to lot entitlement, unit entitlement, lot liability or the equivalent contribution schedule in that state. Owners of larger or more valuable lots may pay more.

That does not mean every special levy is automatically shared in the same way. Some costs may be tied to a particular by-law, exclusive-use area, utility service, stage, precinct, building, benefit principle, or state-specific contribution rule.

Before voting, check:

• Is the proposed split consistent with the scheme records?
• Is any owner being charged because they caused the damage?
• Is any exclusive-use by-law relevant?
• Is the cost linked to only one building in a layered or staged scheme?
• Has the strata manager or lawyer explained the basis for the allocation?

This is not about hunting for someone else to pay. It is about avoiding a levy that has to be unwound because the wrong owners were charged.

What owners should do before the meeting

Do not wait until the meeting to start reading.

Ask for the missing papers early. Keep the request short and practical. For example:

Then read for gaps, not just numbers.

If the papers are missing, ask for deferral only if delay is reasonable. There is a difference between "we need seven days to inspect the quote" and "we want to avoid the fire order".

What to ask at the meeting

The best meeting questions are short. They do not accuse. They force the answer into the record.

Use questions like these:

• What report or quote is the levy based on?
• Were alternative quotes obtained? If not, why not?
• Is the work urgent, and what happens if it is delayed?
• Does the amount include contingency and professional fees?
• What happens to unused money?
• Will owners receive progress updates and final cost reporting?
• Why was the capital works fund not enough?
• Does this change next year's ordinary levies?
• Has the committee checked whether any part is recoverable from insurance, a contractor, a builder, a developer, or a lot owner?
• Will the contract be approved separately before signing?

The goal is not to turn the AGM into a courtroom. The goal is to make sure owners are voting with enough information to own the decision.

If you support the levy

Supporting a special levy does not mean giving the committee a blank cheque.

You can vote yes and still ask for guardrails:

• A fixed purpose.
• A cap on spending without further owner approval.
• A requirement to report back at each stage.
• A tender or contract review before signing.
• A clear instalment schedule.
• A final reconciliation once invoices are paid.

This is especially important for defect work and litigation. Owners often vote for the first levy thinking it will solve the problem, then discover it was only for reports, pleadings or preliminary works. There is nothing wrong with staging, but owners should know which stage they are funding.

If you oppose the levy

Opposing a special levy is not enough. You need an alternative.

If the building has a genuine legal, safety or repair obligation, voting no does not make the obligation disappear. It may simply delay the work, increase the cost, worsen insurance risk, or force another meeting.

A credible no vote usually says one of these things:

• The work is needed, but the quote and scope are not ready.
• The work is needed, but the funding split appears wrong.
• The work is needed, but the motion is too broad.
• The work is not urgent and should be put into next year's budget.
• The building should seek another quote, report, grant, insurance response or legal opinion first.

If you cannot explain what should happen instead, your no vote may be read as a refusal to fund the building rather than a challenge to the process.

After the levy passes

The meeting is not the end of the job. It is the start of the record.

Owners should expect:

• A formal levy notice.
• A clear due date.
• Written payment details.
• Confirmation of any instalment options.
• Updates on the work or project being funded.
• A record of invoices and payments.
• A final reconciliation.

If the levy funded a specific project, the committee should be able to show where the money went. That does not mean every owner gets to micromanage every invoice, but it does mean the building should maintain a clean audit trail.

This is where owners lose leverage if records are scattered across emails, portals, meeting packs and manager systems. A building should be able to attach the special levy motion, quote, invoice, payment record, progress update and final outcome to the same project file. If that cannot be done, the next committee inherits a mess.

If you cannot afford the levy

Act early. Do not wait for the due date and do not ignore the notice.

In NSW, owners can ask their scheme to consider options such as a payment plan and, in some circumstances, waiving interest. NSW guidance says overdue levies can attract interest and debt recovery action, and unpaid owners may lose voting rights. Other states have their own rules, but the practical advice is the same: communicate before the file becomes a debt recovery file.

Write to the strata manager or secretary. Explain the situation briefly. Propose a payment amount and timing you can actually meet. Ask for the response in writing. Keep paying something if you can, and make clear what the payment is for.

The worst move is silence. The second worst move is withholding levies because you are angry about the committee, the manager or the repair. If there is a dispute, pursue the dispute separately. Unpaid levies usually create a new problem that sits on top of the old one.

The red flags

Be careful when a special levy has several of these signs:

• The agenda contains no quote, report or scope.
• The purpose is vague.
• The amount is rounded without explanation.
• The committee cannot explain fund balances.
• The item appeared suddenly, but minutes show it was known for years.
• The proposed payment date is unrealistic.
• The same issue has already had previous special levies with no final report.
• Owners are told they cannot ask questions.
• The manager benefits from arranging the work and the commission or fee is not disclosed.
• The levy is being used to hide an ordinary budget deficit.

One red flag does not make the levy wrong. It means owners should slow down and get the missing information onto the record.

What a good special levy process looks like

A good process feels boring.

The papers arrive on time. The motion says what the money is for. The quote and report are attached. The fund balances are visible. The committee explains why ordinary funds are not enough. Owners can see the lot-by-lot effect. The meeting minutes record the questions and decision. The levy notice follows. The project file then shows invoices, payments and progress.

Nobody loves paying it. But at least everyone can see the line between the problem, the decision and the money.

That is the standard owners should expect. Not perfection. Just a clean trail.

How the money is split

A special levy is almost always split by the same formula as ordinary levies: unit entitlements, lot liabilities, or the contribution schedule. It is not split "per apartment" unless the motion and the scheme documents say so.

Ask for a lot-by-lot table before the vote. A $240,000 levy in a 24-lot building is not $10,000 each if entitlements are unequal. The penthouse may pay $18,000 and a studio $6,500. Owners who only hear the headline total cannot judge hardship or fairness.

If the work benefits one lot — a courtyard slab only they use, a lot-specific licence — do not let the motion call it a building-wide special levy by default. Cost can follow the lot when the scheme documents or a by-law say so. If the committee cannot explain why every owner is paying, that is a question for the meeting, not a vibe.

Instalments, notice and the due date

In NSW, levy notices generally need at least 30 days before payment is due. Emergency work that addresses a serious and imminent threat can be shorter. Other states use different labels and periods. Read the notice, not last year's habit.

Instalments are often the difference between a levy that is paid and a levy that becomes a debt file. A motion can set two or three due dates. That does not make the levy smaller. It makes it payable. Committees that refuse instalments "to keep it simple" often spend more on recovery than they saved in admin time.

If you need time, write before the due date. Propose dates and amounts. Ask whether interest will run and whether the scheme will pause recovery while the plan is kept. Silence until week five is how a necessary levy becomes unpaid-levy enforcement.

Special levy, strata loan, or raise the ordinary contribution

Those are three different tools.

A special levy is right when the item is discrete, the quote is in, and waiting for the next AGM budget would make the problem worse.

A strata loan spreads a large, planned capital item. Price the interest against a three-year catch-up in ordinary capital contributions. Borrowing to replace something that was in the 10-year plan is paying for last decade's levy freeze.

Raising the ordinary capital contribution is right when the plan is underfunded and this invoice is the first of several. One special levy plus an unchanged 10-year contribution means you will be here again.

The meeting can reject the special levy and still pass a motion to obtain quotes, update the plan, or call another meeting in 60 days with a proper paper. "No" without a next step is how roofs wait until they leak into three lots.

After the project: leftover money

The motion should say what happens if the job comes in under. Default should be: leftover stays in the fund that received the levy and is applied to that project or credited against the next contribution to that fund. It should not quietly improve the admin surplus or pay the manager's extra invoice.

If the job overruns, the committee does not get a blank top-up. They come back with a variation motion or they find the extra in the correct fund. A 15% "contingency" buried in a vague motion is how overruns hide. A stated contingency tied to the quote is honest.

Ask for a one-page reconciliation when the contractor is paid: levied, spent, leftover, invoices attached. File it with the minutes. The next buyer will read it. So will the next committee.

Insurance, defects and "urgent" that is not

Some special levies are really insurance excesses, declined gradual-damage claims, or defect work the original builder should still be answering. Before you vote, ask:

• Has a claim been lodged, and what did the insurer say in writing?
• Is this inside a statutory warranty, duty-of-care or building-bond window?
• Is the corporation pursuing the builder, or just billing owners?

Paying owners first can still be necessary to stop water. It should not be the end of the file. Minute the recovery step. A levy that funds a repair and then forgets the builder is how the same membrane is paid for twice.

Voting thresholds and who can vote

Confirm the resolution type before you campaign. Many special levies are ordinary resolutions. Some large improvements or by-law-linked works are not. An ordinary-resolution levy that should have been a special resolution is how a later owner unwinds the project.

Unfinancial lots often cannot vote. If a third of the building is in arrears because the last levy was brutal, the remaining owners are deciding this one. That is lawful in many states and still worth saying out loud. So is the entitlement split: a show of hands can look like a majority in the room and lose on a poll.

If you support the work but not the motion, foreshadow a better one: same quote, instalments, a cap, and a leftover rule. Voting no with no alternative is how necessary work dies and three months later costs more.

Tell absentee owners the lot-by-lot figure in the notice, not only the building total. A directed proxy is useless if the owner still thinks their share is "about two thousand" when it is $7,400. Put the table in the pack and in the covering email. Hardship conversations start before the meeting, not in the last five minutes of general business.

If the levy is for a report rather than the works, say so in the title of the motion. Owners who think they just funded the whole roof will revolt when the real quote arrives. A $4,000 investigation levy that prevents a $200,000 wrong repair is a bargain. Call it an investigation levy.

Keep the scheme file in one place the committee and the manager can both open. Features, pricing, or book a tour.