Exploring the World of Special Levies: What You Need to KnowYou've likely encountered the term 'special levies' in the realm of property ownership, but what exactly are they and how might they impact your financial landscape? Special levies, are funds collected from all owners within a strata building to cover a specific, shared expenditure. These levies, sometimes referred to as special assessments, serve a crucial purpose, typically geared towards financing major projects like new roofing, window replacements, HVAC system upgrades, rain screens, membrane replacements, renovations to common facilities, and occasionally, even the strata's insurance premium. This last case is particularly intriguing, as it involves a special levy covering an operating expense of the strata corporation, a rather uncommon occurrence.
What often takes new property owners by surprise is that a special levy is a supplementary charge, in addition to their routine monthly strata fees, and occasionally it can amount to a substantial sum – sometimes thousands of dollars per unit.
You might wonder, "Why am I paying this additional fee when I'm already contributing through my strata fees?" Special levies become necessary when a building's contingency reserve fund is lacking the required funds or when an expense hasn't been accounted for in the annual budget. Such expenses are usually unforeseen or are infrequent major outlays - this is when special levies step in to bridge the financial gap.
In British Columbia, the approval of special levies necessitates a ¾ vote, and the decision-making process must transpire at a general meeting or a special meeting. During this meeting, the resolution to approve a special levy should include details such as:
You might be curious about how your portion of a special levy is determined. The calculation is based on your unit entitlement, which is a measure of your unit's size relative to the size of all units in the strata. Unit entitlement is officially documented in the strata plan and is generally disclosed in the minutes of each annual general meeting.
- The purpose of the levy
- The total levy amount
- The method for calculating each strata lot's share of the levy
- The specific amount payable by each strata lot
- The deadline(s) by which the levy must be settled
You might be curious about how your portion of a special levy is determined. The calculation is based on your unit entitlement, which is a measure of your unit's size relative to the size of all units in the strata. Unit entitlement is officially documented in the strata plan and is generally disclosed in the minutes of each annual general meeting.
The only situation where this rule might not apply is when a unanimous vote is cast in favor of a 'fair division' of an expense that doesn't align with unit entitlement.
What if you find yourself unable to pay the special levy? In such circumstances, you might need to consider taking out a loan or mortgage to cover the expense. Failing to pay the special levy on time can lead to interest charges, and in some cases, the strata corporation may place a lien on your property. A lien can set in motion the process of foreclosure, meaning that, ultimately, you might be compelled to sell your property.
Understanding the dynamics of special levies is crucial, whether you're in the process of buying or selling a property.
For more information or assistance, don't hesitate to call 604-760-7005 or send an email to tazmeen@tazmeenwoodall.com. I’m here to help you navigate the intricate world of strata property ownership.