How to raise a special levy in a community strata corporation?
Raising a special levy in a community strata corporation typically follows a specific procedure, which can vary depending on the jurisdiction. However, the general process includes the following steps:
Identifying the Need for a Special Levy:
The strata council or property management identifies a significant expense that cannot be covered by the regular operating budget or contingency reserve fund. This might include major repairs, upgrades, or unexpected costs.
Preparing the Proposal:
A detailed proposal outlining the reason for the special levy, the total amount required, how the funds will be used, and how the levy will be apportioned among the owners is prepared.
Extraordinary General Meeting is necessary to raise a special levy. The reason is that a special levy is a significant financial decision affecting all owners, and such decisions typically require a formal vote.
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Notifying Owners:
Owners must be informed of the proposal. This often requires providing notice in advance of any meeting where the levy will be discussed. The notice should include all relevant details, such as the amount of the levy and the reasons for it.
Calling a Meeting:
An Extraordinary General Meeting (EGM) is usually required to vote on the special levy. This is because a special levy is a significant financial decision that requires approval from the owners.
The notice for the EGM should include the agenda, specifying the proposal for the special levy.
Voting on the Special Levy:
At the EGM, the proposal is discussed, and owners vote on whether to approve the special levy. The specific voting threshold required for approval (e.g., a simple majority or a higher percentage) can vary by jurisdiction.
Approval and Collection:
If the special levy is approved, the corporation will notify all owners of the decision, including the amount each owner is required to pay, the payment schedule, and the due dates.
The strata corporation then collects the levy from the owners according to the agreed terms.
Implementing the Use of Funds:
The funds collected are used for the specific purpose outlined in the proposal, and the strata council or management oversees the expenditure.
EGM is Necessary:
Extraordinary General Meeting is necessary to raise a special levy. The reason is that a special levy is a significant financial decision affecting all owners, and such decisions typically require a formal vote. However, specific bylaws or local legislation may have different requirements, so it's essential to consult the governing documents of the strata corporation or seek legal advice to confirm the exact procedure in your jurisdiction.