Sectional title corner – a question of levy hikes
If no provision was made for increased security services (i.e. from nights only (6pm to 6am) to 24 hours over weekends and public holidays at the AGM and the adoption of the new budget) can the trustees take a resolution to do this two months after the AGM without providing a motivation for this decision? There have been no incidents of a breach in security before whatsoever. No notice of the resolution taken was distributed to any of the owners and when the extended security services were questioned, as an owner I was informed that it was a resolution taken democratically and there will therefore be an increase in the levies. My follow-up question is whether this can be regarded as a “luxurious” improvement to common property or non-luxurious? – Arron
The budget can only be approved at the AGM and levies can only be increased by way of an approved budget. The only exception to this is where Prescribed Management Rule 31 (4Aa) gives the trustees the authority (if they think it is necessary) to increase the levies by a maximum of 10% at the beginning of the financial year – this increase then needs to be ratified or changed at the AGM. Other than this the trustees cannot increase levies.
Increasing the guard complement or hours is not an improvement to the common property – it is just increasing an existing expense. If it was not included in the budget the trustees cannot do so. If it is an emergency and necessity I would suggest they call a Special General Meeting to discuss the matter with all owners and then raise a special levy to cover the extra expense. Though they do not need permission from the owners to raise a special levy they cannot overspend on the budget without consulting the owners.
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Who is Karien Coetzee?
Karien Coetzee is the national property management consultant at property management company, Trafalgar. She holds qualifications in sectional title schemes management and homeowners association management.