Special levy is a one off payment (or billed in several installments) when the sinking fund falls short. It needs the owner’s approval during the AGM.
Delay in charging special levy can push up future costs while affecting resale value.
For older properties, having insufficient funds and costly upgrading projects can require one-off levies.
If the sinking fund is insufficient to cover expenses, it is either
- The costs are unforeseen or
- The sinking fund is not managed well or
- Arrears by some SP despite late payment interests charged to their accounts
The council may ask that all owners pay a special levy to cover the difference in costs.
The special levy is an additional one-off contribution from condo owners. The request for a special levy is raised at a general meeting, and approval must be sought from the condo owners. Unfortunately, because of this, owners may vote not to pay the special levy, perhaps because they disagree with the amount being raised.
This simply delays any timely maintenance and may result in an increase in costs in the future.
The amount of contribution towards these two funds is decided or reviewed at a general meeting of the MC.
SPs should make timely payments to the MC to avoid incurring interest due to late payments. The MC has the right to recover any unpaid contribution from the SP as a debt or recover the contributions by a forced sale of the lot.
MC can vote to introduce a special contribution or levy where there are insufficient funds to cover expenses involving major expenditure or unforeseen work. During the general meeting, the MC can decide how often levies are collected, for example, yearly, half-yearly, quarterly or monthly. For many MCs, paying smaller amounts on a more frequent basis may be more affordable than paying larger amounts on an annual basis
See Gao ShuChao vs Tan Kok Quan and Others.
Though this case is about defamation, it stemmed from disagreement over a special levy imposed by the MCST on all SPs of Duchess Residences to alleviate the impending cash deficits caused by the failure of 13 SPs to pay contributions to the management and sinking funds (“contributions”).
