What is a special levy?
03/11/2015
Under the new Act if home owners want a new facility or an improvement to the community and the operator refuses to fund it, the home owners can vote to pay for it. This is a special levy.
How the vote works
All home owners in the community must be advised that a vote is to be taken on a special resolution for a special levy. The resolution has to specify what the levy is for, how it was calculated, and when it is to be paid by home owners.
The vote on the levy must take place within 90 days of home owners being notified. Only 75% of home owners are required to agree to the resolution for it to be passed.
The operator of the community must also consent to the new facility or community upgrade. The operator must write to all home owners in the community confirming agreement with the special levy either before, or within 90 days of the resolution being passed.
Once passed the special levy must be paid by every home owner in the community in equal shares (with each residential site counting as a single share).
Paying the levy
Home owners must pay the levy in accordance with the resolution and the operator can recover the money as a debt owing from any home owners who do not pay their share.
When a home is sold the home owner is no longer liable for payment of the levy but there is no refund of any portion already paid. The new home owner becomes responsible for paying the levy but only if they were advised of the requirement in the disclosure statement provided by the operator.
The operator can also contribute to the new facility or upgrade for which the special levy is in place.
Use of the levy
The operator will hold levy payments until they are used or refunded. Refunds should be made if for any reason the project doesn’t go ahead, and any unused funds are also to be refunded (if the project comes in under the estimated cost). The Act does not set out how or when refunds are to be paid.
There is no set timeframe for the operator to use the levy when all payments have been received. The Act only provides that the money must be used within a reasonable time for the purpose for which it was collected.
The Act does not set out what records the operator is required to keep about the levy or whether home owners are entitled to inspect such records.
If you have concerns
What the Act does provide is access to the NSW Civil and Administrative Tribunal (NCAT) for the operator or any home owner with concerns about the special resolution. The application must be made within 28 days of the resolution being passed and the Tribunal can make orders quashing or confirming it in whole or in part.