Special Levy Approved Before Settlement in NSW: Does the Buyer or Seller Pay?

In NSW, a special levy approved before settlement is not automatically the seller's bill. The owners corporation's statutory right to recover the contribution must be separated from how the sale contract allocates the cost between buyer and seller. The key dates are the levy determination, levy notice and due dates, contract date and settlement. A Section 184 certificate and the contract's special-levy clauses should be reconciled before completion.

A Sydney apartment can be only days from settlement when an owners corporation approves a major special levy for waterproofing, façade repairs, lift replacement, fire-safety work or another unexpected expense. The natural question is who pays. The seller owned the apartment when the decision was made, but the buyer may own it when an instalment falls due.

That is why the phrase "approved before settlement" does not resolve the issue by itself. In a NSW strata transaction, four different dates can matter, and the contract may allocate the economic burden differently from the owners corporation's statutory rights against an owner.

The Four Dates That Matter More Than the Settlement Date Alone

A special levy dispute usually becomes easier to analyse once the transaction is put into chronological order.

• Contract date
• The sale contract may allocate special levies according to whether they were raised before or after the contract was entered into.
• Owners corporation determination
• This is when the owners corporation formally decides to raise the additional contribution.
• The resolution usually fixes the total amount and payment structure.
• Levy notice and due date
• The notice identifies the contribution.
• It also sets out when one or more instalments become due and payable.
• Settlement and ownership transfer
• The purchaser becomes the owner.
• The lot may remain exposed to an unpaid contribution, subject to the legislation, contract and Section 184 certificate.

The critical mistake is to collapse all four events into one question: "Was the levy approved before settlement?" The better conveyancing question is: when was it determined, when was it formally levied, when does each amount fall due, what does the contract say, and what does the current strata information show?

What NSW Strata Law Says About Raising the Contribution

Under section 81 of the Strata Schemes Management Act 2015 (NSW), an owners corporation that faces expenses it cannot immediately meet from its administrative or capital works fund can determine an additional contribution at a general meeting. In practical strata language, this is commonly described as a special levy.

Section 83 then deals with levying the contribution. The owners corporation gives the owner written notice, and the contribution becomes due and payable on the date stated in that notice. For ordinary contributions, the due date must generally be at least 30 days after the notice is given. A shorter period can apply for a contribution funding qualifying emergency repairs.

This creates an important distinction between a meeting approving the funding requirement and the date on which money is actually due. A levy can therefore be determined before settlement while an instalment does not become payable until after the purchaser has taken ownership.

There Are Two Different Questions: Who Can Strata Pursue and Who Should Ultimately Bear the Cost?

Buyers and sellers should distinguish the owners corporation's statutory position from the private allocation negotiated in the sale contract.

Section 84 of the Strata Schemes Management Act provides that where another person is liable for a contribution when a person becomes the owner of a lot, the incoming owner can become jointly and severally liable with that person for the contribution and associated interest.

That matters because a purchaser should not assume an unpaid pre-settlement amount can simply be ignored because the seller was responsible for it under the sale contract. If the contribution remains attached to the lot's financial position, the purchaser's conveyancer needs to ensure it is properly dealt with at settlement.

Separately, the sale contract governs the financial rights between buyer and seller. A contractual provision may require the seller to bear an amount even where the owners corporation could potentially pursue the incoming owner if the amount remains unpaid.

The result is a practical conveyancing principle: identify both the party the owners corporation can recover from and the party who, under the contract, is supposed to carry the economic cost.

Why the Contract Date Can Be More Important Than the Settlement Date

NSW contracts commonly contain specific provisions dealing with strata contributions, and special conditions can amend the printed terms substantially. Some commonly used contract structures distinguish between a special levy raised before the contract date and one raised after the contract date rather than using settlement as the dividing line.

That means a levy approved after exchange but two weeks before settlement may, under the particular wording of a contract, be treated very differently from a levy that had already been determined when the purchaser signed.

Special conditions require particular attention. A vendor's solicitor may amend the usual allocation so that instalments falling due after settlement are borne by the purchaser, even where the levy itself was determined earlier. Another contract may make the vendor responsible for the entire special levy if it was raised before a specified date.

Buyers should therefore avoid rules of thumb such as "the seller pays anything approved before settlement". The actual contract must be read.

Five Special-Levy Scenarios Sydney Buyers Regularly Need to Separate

• Levy determined before the contract
• Check disclosure.
• Review the printed strata clauses and any special conditions.
• Check payment history.
• Confirm whether the levy relates to work already underway.
• Levy determined after exchange but before settlement
• Do not assume the seller pays.
• Review the contract wording governing special contributions raised after the contract date.
• Levy has several instalments spanning settlement
• Determine whether the contract allocates the whole levy by the date it was raised.
• Alternatively, check whether individual instalments are allocated according to their due dates.
• Major works are discussed but no special levy has been passed
• There may be no existing special contribution yet.
• The buyer may still inherit significant post-settlement funding exposure.
• Section 184 certificate predates a new meeting
• Check for later meeting notices.
• Review subsequent minutes, levy resolutions and updated financial information before settlement.

The Section 184 Certificate Is the Financial Checkpoint Before Settlement

For anyone buying a strata apartment in NSW, the Section 184 certificate is one of the most important settlement documents.

The current NSW Fair Trading form specifically provides for special contributions under section 81(4). It records the amount of the levy, the date on which the determination was made, the number of instalments, individual due dates, amounts outstanding or in credit and the purpose for which the contribution was required.

That information turns a vague statement such as "the building has a $2 million special levy" into something that can actually be reconciled against the individual lot and the settlement adjustments.

NSW Government guidance also states that if a levy was already outstanding before a Section 184 certificate was given but was not shown on that certificate, the purchaser is not responsible for payment. Section 185 of the Act gives the certificate significant evidentiary status for a purchaser taking an interest for value.

From 1 April 2026, the NSW strata information certificate regime also requires additional information about matters including certain compliance action and recent or upcoming meetings. That makes the certificate more useful when a building is approaching a major funding decision, although it does not remove the need to review underlying meeting records and subsequent developments.

Elyment's analysis of the NSW strata-report changes applying from 1 April 2026 examines the broader implications of that expanded disclosure framework.

A Section 184 Certificate Should Not Be Read in Isolation

The certificate tells the conveyancing team what the owners corporation formally records at a particular point in time. It does not make the rest of the strata file irrelevant.

Meeting minutes may show that the financial pressure emerged months earlier. Tender comparisons may have been received. Waterproofing failures may have been documented. Engineers may have recommended façade remediation. Owners may already have debated whether to borrow money or raise a special contribution.

That distinction is particularly important where the levy has not yet been formally determined. A certificate showing no current special contribution does not necessarily mean the apartment carries no foreseeable strata funding risk.

Buyers dealing with incomplete or inconsistent records should also consider Elyment's guide to how a strata records gap can delay a Sydney apartment purchase.

The Capital Works Plan Can Explain Why the Levy Exists

The amount on the levy notice is only one part of the commercial assessment. A buyer should understand what the money is funding and whether the expenditure is likely to solve the problem.

Relevant questions include:

• Is the levy paying for a defined construction contract or only an investigation?
• Has a contractor actually been appointed?
• Is the levy based on a fixed price, preliminary estimate or provisional allowance?
• Could additional levies be required?
• Does the capital works fund already contain part of the required money?
• Are there building defects, waterproofing failures, fire-safety issues or legal proceedings behind the expenditure?
• Will the project affect access, balconies, lifts, parking, common areas or renovation approvals after settlement?

Elyment's guide to reading the capital works plan before buying a Sydney strata apartment examines how future building expenditure can affect an acquisition even where there is no immediately payable levy.

A Practical Pre-Settlement Process for the Buyer

1. Identify the resolution.
2. Obtain the general meeting minutes and confirm exactly what owners approved, including the total contribution and instalment schedule.
3. Confirm the determination date.
4. Do not rely on the date the buyer first heard about the levy.
5. Check the levy notice.
6. Record each due date and whether any instalment is already outstanding.
7. Read the contract clause dealing with strata contributions.
8. Then read every special condition that modifies it.
9. Reconcile the Section 184 certificate.
10. The levy amount, due dates, outstanding balance and credit position should match the other records.
11. Review the proposed settlement adjustments.
12. Confirm whether the vendor is paying an outstanding amount, allowing an amount to the purchaser, or whether the purchaser is assuming responsibility under the contract.
13. Check what happened after the certificate was issued.
14. A new general meeting, amended levy or additional instalment can materially change the position before completion.

Why Buyers Planning Renovations Need to Know Before They Commit Their Cash

A special levy is not simply another line in the legal settlement file. It can change the buyer's entire post-settlement project budget.

A purchaser expecting to spend $40,000 immediately after settlement on flooring removal, floor levelling, timber installation, painting or a bathroom upgrade may need to reconsider that programme if an unexpected $25,000 strata contribution also becomes payable.

The common property project itself can also interfere with private works. Balcony waterproofing, façade access, lift replacement or concrete remediation may affect contractor access, loading arrangements, noisy-work windows or the owners corporation's willingness to approve simultaneous renovation activity.

This is why strata due diligence and renovation planning should not operate as separate workflows. The financial health of the building can directly affect when an owner should commit to contractors, flooring materials, temporary accommodation and project deposits.

The Seller Has a Disclosure and Settlement-Management Problem Too

Sellers should not wait for the purchaser's conveyancer to discover the levy late in the transaction. If a general meeting has been called, a levy has been determined or a levy notice has been issued, the seller's legal representative should understand how that development interacts with the contract and settlement adjustments.

Late surprises can create disputes about adjustments, requests for additional documents and pressure on an otherwise ready settlement. Where the special levy is substantial, it may also affect a purchaser's available funds or willingness to proceed, depending on the contract and the stage of the transaction.

For purchasers still within a contractual review period, Elyment's guide to what NSW buyers should prioritise during the cooling-off period explains why strata financial exposure should be investigated early rather than left until the settlement statement arrives.

What to Ask Your NSW Conveyancer Before Settlement

• Was the special contribution formally determined, or is it only proposed?
• What was the exact date of the resolution?
• When was the levy notice issued?
• What are the instalment due dates?
• Was the levy raised before or after the contract date?
• Does the contract contain a special condition changing the usual strata adjustment provisions?
• Is any amount currently overdue?
• Does the Section 184 certificate correctly record the contribution?
• Have any further strata meetings occurred since that certificate was issued?
• What amount, if any, should appear in the settlement adjustments?

STRATA, SETTLEMENT & PROJECT REVIEW

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The Bottom Line

A strata special levy approved before settlement in NSW does not automatically belong to either the buyer or the seller simply because of when settlement occurs.

The correct analysis requires the owners corporation resolution, levy notice, due dates, contract date, special conditions, Section 184 certificate and settlement adjustments to be read together.

The most important operational distinction is between statutory liability to the owners corporation and the contractual allocation of the cost between the parties. Once those two issues are separated, the settlement position is usually much clearer.

Disclaimer: This article provides general information about NSW property and strata transactions and is not legal advice. Buyers and sellers should obtain advice from their solicitor or licensed conveyancer about the wording and circumstances of their particular contract.