Overview
The Condominium Property Act (the Act) outlines the process a condominium corporation's board must follow when it approves a special levy. Owners usually pay regular monthly contributions for ongoing expenses, such as insurance, utilities, management fees, maintenance and reserve fund contributions. A special levy is a one-time or temporary assessment imposed on owners to raise money for an unbudgeted expense or shortfall.
Examples include:
- major repairs
- an unexpected insurance deductible
- emergency remediation
- insufficient reserve funds
Condominium boards can approve special levies through a board resolution. They do not need to seek approval from the owners through a vote at a general meeting unless the levy is for a capital improvement.
A special levy may be used:
- for payment of unexpected and urgent maintenance, repair or replacement of the real and personal property of the corporation, common property or managed property;
- to cover unexpected shortfalls in the operating account;
- to increase the balance of the reserve fund to meet requirements in a reserve fund plan in accordance with the regulations;
- for the payment of a capital improvement, if the corporation has passed a special resolution approving the capital improvement; or
- to satisfy a judgement against the corporation.
Notice of special levy
As soon as possible after approving a special levy, the board must inform each owner of the levy's purpose, the total amount to be collected, how each unit's share was calculated, the amount payable for the owner's unit and the payment date or installment dates.
While the legislation does not require the board to convene a meeting of the owners to inform them about the levy, an information meeting can be helpful depending on the circumstances. If the cost is for a specific purpose, it may make sense to have related professionals in attendance to answer any questions that might arise, such as an engineer, contractor, or accountant.
Paying the special levy
The board may give owners payment options, such as allowing the special levy to be paid in installments.
If the amount collected through the special levy exceeds the amount required, or for any other reason the amount of the levy is not fully used for the purpose set out in the resolution, the board must pay the surplus money into the reserve fund.
Any changes to the levy (for example, reduction or cancellation) must be made by a new board resolution and communicated to owners.
Unpaid levies
If an owner does not pay a special levy, the Act and regulations permit the condominium corporation to recover collection costs. The corporation may also file a caveat against the title to the owner's unit for the levy amount, legal expenses and other professional fees associated with preparing, registering and discharging the caveat; the actual costs of registering and discharging the caveat under the Land Titles Act; and any interest owing.
When a caveat is filed, the corporation has a charge against the unit for the amount of the levy, plus costs and any interest owing to the corporation. The charge owing to the corporation has the same priority as a mortgage registered under the Land Titles Act. The corporation has the legal right to commence foreclosure proceedings on the unit, unless the owner, or the mortgage lender, pays the amount that is owing.
If the amount owing to the corporation is not paid, the Act permits a mortgagee (mortgage lender) to pay the amount owing. The lender may then add that amount to the mortgage.
When the full amount is paid, the corporation must discharge the caveat.
Estoppel certificates must include information about unpaid special levies and accrued interest, if applicable.
Disputes about levies
If you disagree with a special levy, you may raise the issue with your board.
See the fact sheet on ‘Resolving condominium disputes,’ available at Condominium information for more information on the options available to owners if they disagree with actions taken by a board.