Do I have to pay a body corporate special levy charged on the unit I am buying?

  • Blog
  • Do I have to pay a body corporate special levy charged on the unit I am buying?
View All Articles

Scroll for more

What is a body corporate special levy?

The normal body corporate levies payable by unit owners are the Administrative Fund levies for the everyday running costs of the body corporate, and the Sinking Fund levies which are saved for future capital works on the building which comprises the Community Titles Scheme. To use business terminology, the Administrative Fund is the trading account and the Sinking Fund is the capital account.

However, where an unbudgeted capital expense looms, or planned works or projects will cost more than is comfortably available in the Sinking Fund, a body corporate sometimes must raise additional funds from the unit owners. The extra money enables the body corporate to pay for the expense.

The money is raised at a meeting of the unit owners which considers a motion to agree to a “special levy” being charged (or “struck”).

Examples of special levies are where the owners want a building paint job which is more expensive than budgeted for; or where there is an unforeseen major leak or problem in the building which is not covered by insurance.

If the body corporate meeting approves the special levy, a bill is sent to each unit owner for their share of the levy. If a unit is under contract at the time, this is where it gets interesting.

Who pays special levies before the contract date?

The standard contracts require that special levies are to be paid by the seller where they are struck by the body corporate on or before the contract date.

The seller is also responsible for paying any other body corporate debt such as recovery costs owing to the body corporate for non-payment of levies on time.

Who pays the special levies after the contract date?

The contract provides that the buyer is liable for any special levy struck after the contract date. This can become a major trap for a buyer if a seller does not notify them that a special levy is about to be struck. Further, a seller has no obligation to notify a buyer of this situation arising.

We recommend discussing this issue with your solicitor prior to signing any contract for purchase of a lot in a community title scheme. There are ways that you can protect yourself from becoming required to pay an unexpected, and potentially large body corporate special levy.

Can I get out of the contract if I find out special levies have been struck after the contract date?

The answer for a straightforward contract without any relevant special conditions is usually NO.

There are ways to protect yourself, such as using a a Due Diligence condition. For more info see here.

The Property and Conveyancing team at FC Lawyers can review your contracts before you sign them, so contact us at any time to discuss.

The information provided in this article is for general information and educative purposes in summary form on legal topics which is current at the time it is published. The content does not constitute legal advice or recommendations and should not be relied upon as such. Whilst every care has been taken in the preparation of this article, FC Lawyers cannot accept responsibility for any errors, including those caused by negligence, in the material. We make no representations, statements or warranties about the accuracy or completeness of the information and you should not rely on it. You are advised to make your own independent inquiries regarding the accuracy of any information provided on this website. FC Lawyers does not guarantee, and accepts no legal responsibility whatsoever arising from or in connection to the accuracy, reliability, currency, correctness or completeness of any material contained in this article. Links to third party websites or articles does not constitute any endorsement or approval of those sites or the owners of those sites. Nothing in this article should be construed as granting any licence or right for you to use that content. You should consult the third party’s terms and conditions of use in relation to any third-party content. FC Lawyers disclaims all responsibility and all liability (including liability for negligence) for all expenses, losses, damages and costs you might incur as a result of the information being inaccurate or incomplete in any way. Appropriate legal advice should always be obtained in actual situations.


Prefer to get in touch?

With offices in Brisbane, Sunshine Coast and Sydney, our team is well equipped to provide both advice and support across a broad range of legal areas.

Free call 1800 640 509
  • This field is for validation purposes and should be left unchanged.