Who pays a special levy that was struck before settlement?
As a general rule, each instalment is payable by the registered owner at the time it falls due. If instalments continue past settlement, they land on the buyer unless the contract adjusts them.
This is the single most expensive thing buyers miss in a strata report, and it turns on one word. A special levy that has been DISCUSSED is a risk. A special levy that has been STRUCK is a debt with a payment schedule attached, and the schedule does not stop because the lot changed hands.
“Purchasers should note that the special levy instalments continue after settlement and are the responsibility of the registered owner at the time each instalment falls due.”
So the arithmetic that matters is not the headline figure. It is: how much of my lot's share is still unpaid, and when does each remaining instalment fall due relative to my settlement date?
In the specimen, a $186,000 levy was struck across eight quarterly instalments. Lot 12's share was $7,812.00, seven instalments remained, and each was $976.50. A buyer settling mid-schedule inherits roughly $6,835 of it — a number that does not appear anywhere in the report and has to be worked out.
This is negotiable, and it is one of the few things in a strata report that translates directly into dollars off the price. Your conveyancer can seek an adjustment at settlement, or ask that the vendor pay the balance out before completion — but it has to go into the contract before exchange.
Watch for a second trap: a levy struck for works that have not started. If the quotes tabled were a range and the resolution was passed on the middle one, a cost overrun becomes a further levy later. Check whether the work is contracted and at what price.
What to ask
Copy these into an email. The people below can answer them; we can’t.
- To your conveyancer: how many instalments remain on this lot, what is the total still owing, and can the contract require the vendor to pay it out or adjust it at settlement?
- To your strata manager: has the work the levy was raised for been contracted, at what price, and what happens if the final cost exceeds the amount levied?
Want this found in your own documents?
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Related
General information about what these documents say — not legal, building or financial advice, and not a substitute for your conveyancer, solicitor or licensed inspector. Law and practice change, schemes differ, and your contract may say something different from the general position described here.