A Special Levy is often raised when there aren’t sufficient funds in either the Administrative Fund or the Capital Works Fund to pay for an expense/project that has not been budgeted for.
Special levies may also need to be raised when there is a deficit of funds in the Administrative fund.
If the owners corporation is subsequently faced with expenses it cannot at once meet from either fund, it must levy on each owner a contribution (ie Special Levy), which is to be determined at a general meeting of the owners corporation, in order to meet the expenses.
Examples of capital expenditure that a building may need to raise a special levy for could be painting of the common property, fire safety compliance, upgrading the balustrades of the building etc.
A special levy can only be raised at a general meeting of the Owners Corporation by an ordinary resolution (ie simple majority of owners which are entitled to vote in favour of the motion, eg over 50%) and as per the new legislation these amounts can be raised to either the Administrative fund or the Capital Works Fund (formerly called the Sinking Fund).