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SPECIAL LEVY WHEN BUYING AND SELLING A CONDOMINIUM
Anyone who owns property in a community of owners will sooner or later come across the term special levy. It refers to money that the individual owners must pay into the community fund to cover extraordinary or unforeseeable costs of the community. The special levy is usually decided by the community of owners. However, owners should look carefully when selling a property, because the familiar rule that whoever decided on the expenditure must pay does not always apply.
THE TIME OF THE TRANSFER OF OWNERSHIP IS WHAT COUNTS!
In a community of owners, whoever owns one or more apartments within the community must pay. The owners' meeting decides on the special levy, and the individual owners are bound by its resolutions. They must therefore contribute to the special levy that has been decided. As long as ownership does not change, the matter is usually clear. It becomes difficult when a property sale is pending, because then it matters when the levy was decided, when it falls due and when the purchase is completed with the entry in the land register.
With the property sale and the lawful entry in the land register, the rights and obligations of ownership pass to the new owner. A special levy must therefore be paid by the old owner if it was decided before the sale and fell due before the sale. Conversely, the new owner is of course liable if the special levy was decided after the sale had been fully and legally completed.
As a rule, a special levy is decided with immediate effect. In these cases difficulties rarely arise. However, disputes frequently occur when the special levy is decided before the sale but only falls due after it. The legal position is clear in this case too: current court rulings stipulate that the new owner must pay the special levy if the old owner agreed to it before the sale but it only falls due after the sale. The new owner takes on the obligation from the resolution, even though he was not involved in it himself. The logic behind this is easy to understand: the special levy is usually used for measures that maintain the value of the property. If, for example, it is used for necessary renovation work, this directly serves to protect the property from further damage and loss of value. The new owner benefits from this. The fact that he could not take part in the decision is not relevant.
THE SELLER'S DUTY TO INFORM
As the buyer of a property in a community of owners not only acquires property but also takes on numerous obligations, he must be informed before the sale. In particular, the seller must point out to the buyer if a special levy has already been decided that only falls due after the sale is completed. For the seller it can nevertheless pay to insist on a late due date for the special levy if a sale is planned in the near future.
WHAT THE SPECIAL LEVY IS FOR
As the name suggests, a "special levy" serves to cover extraordinary and unforeseeable costs. If a storm damages the common property, extensive repairs may become necessary. If the insurance payments and the community's reserves are not sufficient, a special levy can be raised. In other cases, purchases can be made through the special levy.
In some cases, communities of owners agree a special levy to provide the community fund with fresh money. In contrast to the regular service charge, which pays the ongoing costs of the community, a special levy should remain the exception. The property manager can propose the resolution on the special levy; the decision is taken at the owners' meeting.
As a rule, a simple majority is sufficient for simple repair work. For new construction measures, however, the law requires a unanimous decision. In individual cases the property manager should therefore check in advance which majorities are required.