Worked example: assessing an apartment with a special levy
A worked scenario applying the due-diligence guide. The figures below are illustrative, not a real listing.
1. The situation
Priya is considering a two-bedroom apartment in a 1990s building. She likes the location and the price looks reasonable for the area. She has just received the owners corporation certificate and is close to making an offer.
2. The available documents
The owners corporation certificate, the agent's listing, and recent comparable sales for similar units in the building and suburb.
3. The material facts
4. Risks to investigate
- Whether the $18,000 special levy figure is final or still subject to a vote
- Who is liable for the levy — the current owner, or whoever owns the lot when it's struck or due
- Whether the $42,000 capital works fund is adequate for a 40-lot building's facade remediation, or likely to need a further levy
- Whether the $650,000 asking price already reflects the levy, relative to the $620,000 comparable median
5. Questions to ask
- What is the exact scope and cost estimate for the facade remediation?
- When is the levy expected to be struck, and when would it fall due?
- Has the owners corporation obtained more than one quote for the works?
- Are there other known building defects or disputes on record?
6. What a conveyancer should review
The contract's special conditions regarding the levy, who is liable at settlement, and whether the owners corporation certificate's disclosures are complete and current.
7. What a building inspector may need to examine
The facade and common-property elements the levy is meant to address, and whether the scope described in the OC certificate matches visible condition.
8. Possible interpretations
Treats the $18,000 disclosed special levy as if it doesn't affect the real cost of buying. It does — whether it's paid before or after settlement depends on the contract terms and timing. Removing conditions before the levy amount and liability are confirmed in writing gives up the buyer's only leverage to account for it.
The most defensible path. A disclosed special levy isn't automatically disqualifying — but it is real cost that should be priced in, not ignored. Before removing conditions: get the levy's final amount and due date in writing from the owners corporation manager, confirm in the contract who is liable for it (timing relative to settlement matters and needs a conveyancer's confirmation), and negotiate the price to reflect the buyer's effective cost — roughly the $650,000 asking price plus the buyer's share of the levy, compared against the $620,000 comparable median.
A reasonable instinct, but possibly premature. Walking away before getting a firm levy figure and liability position risks discarding a genuinely fair deal over an unquantified risk. A $42,000 capital works fund against a 40-lot building facing facade remediation is thin, which is worth taking seriously — but the next step is confirming the numbers, not necessarily abandoning the property on the first read of the certificate.
9. What cannot be concluded from the available information
Whether the levy will ultimately cost more or less than $18,000, whether further levies will follow, or who is legally liable for it at this property's specific settlement date — all of that requires the owners corporation's written confirmation and a conveyancer's review of the actual contract.
Reading an Owners Corporation certificate →
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