FAQs about Special Levies in BC Strata Properties
Navigating the intricacies of strata living in British Columbia involves understanding various financial obligations, one of which is the special levy. Special levies are additional fees that strata owners may be required to pay for unexpected common expenses. This FAQ aims to clarify common questions surrounding special levies to assist both current and prospective strata property owners.
What is a Special Levy?
A special levy is an additional fee that strata lot owners must pay when the strata corporation faces expenses not covered by the annual operating budget or contingency reserve fund (CRF). These typically arise from:
- Emergency repairs (e.g., plumbing, structural damage)
- Capital upgrades (e.g., roof or window replacement)
- Major common-area improvements
Special levies can be required in all strata buildings, regardless of age, though they are more common in older and mid-life strata buildings.
Who is Responsible for Paying a Special Levy?
All registered strata lot owners are responsible for paying a special levy once it's approved. The individual share is calculated based on unit entitlement, which reflects the owner’s proportional interest in the strata.
For example, in a North Vancouver condo development, an owner of a larger unit would typically contribute a higher share than someone in a smaller suite.
How is a Special Levy Approved?
To impose a special levy, the strata council must present a resolution at an annual or special general meeting. Approval requires a 3/4 vote of the owners present in person or by proxy.
The resolution must include:
- The total amount of the levy
- The purpose of the levy
- Each owner’s contribution
- The payment schedule
What Happens if a Special Levy Is Not Fully Used?
Under Section 108(4) of the Strata Property Act, if the money collected through a special levy:
- Exceeds the amount required, or
- Is not fully used for the intended purpose,
- and at least 1 owner is entitled to more than $100
…the strata corporation must refund the unused portion to owners. But here’s the key: the refund is paid to whoever is the registered owner at the time the refund is issued—not necessarily the person who originally paid the levy.
Example:
If you pay a $10,000 special levy on your West Vancouver townhouse, then sell the property before the work is complete, and the project finishes under budget, the new owner will receive any refund—even though you paid it.
Word of Caution:
While you may try to negotiate a clause in the contract of purchase and sale to reclaim potential refunds, tracking and enforcing that can be difficult. Strata corporations do not notify past owners for refund purposes, and the new owner may not be willing to update you or forward the funds.
Bottom line: If you're selling a strata lot, it's safest to assume that any refund on a special levy will go to the buyer, not you.
What Happens to a Special Levy When a Property is Sold?
According to Section 109 of the Strata Property Act:
- The seller (the owner before the sale) must pay any portion of the levy due before the property is conveyed.
- The buyer (the new owner) is responsible for any portion due on or after the date of conveyance.
This is why it’s crucial to review any special levy resolution when buying or selling strata property in North or West Vancouver, and to outline your expectations and responsibilities in the contract of purchase and sale.
Can a Special Levy Affect the Sale of My Strata Lot?
Yes. An existing or upcoming special levy can influence both the timing and negotiations of a sale.
- Buyers may request that the seller pay off the levy before completion.
- Alternatively, the purchase price may be adjusted to reflect the buyer assuming responsibility for the levy.
What If I Can't Afford to Pay a Special Levy?
Strata corporations may offer installment options, but non-payment can lead to serious consequences:
- Interest on overdue amounts
- Legal action
- A lien against your strata lot
If you’re struggling to meet the payment, speak with the strata council early to discuss solutions.
Can I Anticipate Upcoming Special Levies?
Yes—by reviewing the depreciation report, which forecasts major repairs and replacements over a 30-year period.
In North and West Vancouver, strata corporations are legally required to obtain a depreciation report every three years. This document helps identify likely capital projects that may trigger a special levy in the future.
Key Takeaways Regarding Special Levies
- A special levy covers large, unbudgeted expenses in a strata corporation.
- Owners pay based on unit entitlement.
- Levies must be approved by a 3/4 vote at a general meeting.
- Refunds are issued if funds are not fully used (as per the Strata Property Act).
- Levy responsibilities are based on the timing of payment and sale and what is negotiated between the parties.
- Always review the strata documents including the depreciation report when buying or selling a strata unit in North or West Vancouver.