The short answer is yes, but only in extremely limited circumstances, and in practice, it is difficult and highly unusual.

Contributions must be in accordance with unit entitlement

Each year an owners corporation prepares a budget in anticipation of the funds they need to raise in order to cover the expenses of the administration of the owners corporation and funds to maintain the common property, see section 79 of the Strata Schemes Management Act 2015. The owners corporation must levy on lot owners contributions in shares proportional to the unit entitlement of the lot owners’ respective lots. This obligation, which is pursuant to section 83(2) of the Act, is strict, and parties cannot contract out (i.e. make an agreement) of this obligation because it is a statutory obligation. However, there is scope to vary this in three very limited ways.

  1. Contributions may be larger if grater insurance costs

Section 82 of the Act which provides that a lot owner who’s use of a lot causes the owners corporation’s insurance premium to be higher, may make a higher contribution attributable to the insurance premium so long as that lot owner has consented to the higher amount. And in the event parties are in dispute on the issue, an owner or owners corporation may seek and order from the Tribunal that an owners consent has been unreasonably refused.

  1. Interests and discounts

Although it is not strictly a variation of the amount levied on a lot owner, section 85 of the Act provides that owners corporation is to charge 10% simple interest on contributions that are not paid within one month of becoming due and payable. However, the section also allows owners corporation to determine that a contribution is to bear no interest, and further, that if the contribution is paid within the one month, and if the owners corporation have determined it, the owner may pay 10% less of their contribution. Accordingly, the Act provides the owners corporation with some discretion as to the charging of interest on contributions, but not the amount of the contribution itself.

  1. A Tribunal order varying contributions

Section 87 of the Act provides that the Tribunal may order that contributions be paid in a different amount (or by a different method) if it can be shown that the amount levied or proposed to be levied is inadequate or excessive (or the manner of payment is unreasonable). Accordingly, a party must apply to the Tribunal and demonstrate how the levy is inadequate or excessive.

Other ways lot owners may contribute otherwise than in accordance with unit entitlements

Contributions may only be varied by order of the Tribunal because they are demonstrably inadequate or excessive, or only to cover the difference of an insurance premium payable because of the use of a lot. There are three other methods by which owners corporations can receive payments from lot owners:

  1. an owners corporation may strike a “special levy” to raise funds for items that have not been budgeted for. But such funds will still be raised in the same manner as an ordinary contribution that is, on each lot owner in accordance with their unit entitlement.
  2. pursuant to a common property rights by-law or a by-law under section 108 of the Act, a lot owner may agree to pay an amount, either as a one off or an on going amount, to the owners corporation as a term of that by-law; and
  3. If there is an order from either a Court or the Tribunal that affects payment of costs in respect of legal proceedings.

If you would like further information on items raised in this article, please contact Kerin Benson Lawyers.

Written by Gemma Lumley and Allison Benson 10/09/2019