Special levies in stratas

A special levy is money collected from strata lot owners for a specific purpose and for shared common expenses. It is money collected from the strata lot owner in addition to the monthly strata fee. A special levy must be approved by at least a 3/4 vote of the strata corporation owners. Sections can also have special levies.

Strata lot owners must pay special levies when:

• the expenditure has not been included in the annual budget because it was either not anticipated or because of the infrequency of the expense
• there are insufficient funds in the contingency reserve fund (CRF) or a decision is made not to use money from the CRF

Learn more on this page:
Approving and contributing to a special levy
Uses of a special levy
Late or unpaid special levies
Special levies and the sale of strata lots
Investing and managing special levies
Excess special levy funds and refunds

Approving  and contributing to a special levy

A resolution for a special levy must be developed and submitted for approval at a general meeting by a 3/4 vote. A 3/4 vote is necessary to approve a special levy if contributions to the levy are apportioned in the same way as strata fees are apportioned, which is usually by unit entitlement.

A resolution approving a special levy must state:

• the purpose of the levy
• the total amount of the levy
• the method for determining each strata lot’s share of the levy
• the amount each strata lot must pay and
• the date(s) by which the levy must be paid

Often strata corporations will seek legal advice on the wording of a special levy resolution.

A unanimous vote is required if contributions to the levy are apportioned by a fair division of the particular expense rather than in the same way that strata fees are apportioned.

Special levies can also be raised by sections for expenses that apply only to that section.

Expenditures and uses  of a special levy

Monies collected for a special levy must only be spent for the purpose of the special levy.  

The strata council must inform owners on how monies raised from a special levy have been spent.

The special levy can be used to secure a strata corporation loan by a 3/4 vote.

Late or unpaid special levies

For late payment, a strata corporation may, by bylaw or by a resolution approving a special levy establish a rate of interest not to exceed the rate set out in the regulations, to be paid if the owner is late in paying his or her strata lot’s share of the special levy. The interest payable is not a fine and forms part of the special levy.

The strata corporation may also file a lien for unpaid special levies against a strata lot. The lien may be registered at the Land Title Office against the title of a strata lot by filing a "Form G: Certificate of Lien".

A lien allows the strata corporation to start the process to foreclose on a strata lot. 

Any of these actions must consider the limitation period. On June 1, 2013, the basic limitation period under the BC Limitation Act for debt collection changed to two years. For strata corporations this means that some debts - such as special levies and strata fees - that become due and owing are generally not collectable after a two-year period.

Please note, since the Limitation Act was changed in 2013, subsequent court cases and Civil Resolution Tribunal decisions have indicated that the two-year limitation period does not apply to the collection of strata fines. For more information please consult with a strata lawyer.

When a strata lot is sold

If a special levy is approved before the strata lot is conveyed to the purchaser:

• the seller will owe the strata corporation the portion of the levy that is payable before the date the strata lot is conveyed to the purchaser and
• the purchaser will owe the strata corporation the portion of the levy that is payable on or after the date the strata lot is conveyed

The Strata Property Act states that if a strata lot has been sold since the special levy was paid, any refund of the special levy is given to the current owner of the strata lot (i.e. the strata lot owner at the time of the refund). This can be negotiated between the buyer and seller.

Investing  and managing the special levy fund

Similar to the CRF (contingency reserve fund), the special levy can be invested or held:

• in insured accounts with savings institutions in British Columbia
• in those investments permitted by Strata Property Regulation 6.11

The special levy must be accounted for separately from other funds held by the strata corporation, or separate section, and include any interest or income earned on the special levy.

Excess special levy funds and refunds

The strata corporation must return excess funds from a special levy to each owner of the strata lot (proportional to the contribution made to the special levy in respect of that strata lot) if there is at least one owner entitled to more than $100.

If no owner is entitled to more than $100, the strata corporation may deposit the excess funds in the CRF (contingency reserve fund).

If a strata lot has been sold since the special levy was paid, any refund of the special levy is given to the current owner of the strata lot (i.e. the strata lot owner at the time of the refund).

References:
Strata Property Act Sections: 1, 52, 70, 100, 173, 246, 261
Strata Property Act Regulations:  5.1, 14.2, 14.3, 14.12, 14.13

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