Special Levy Announced Between Contract and Settlement

By the Pearson Chambers Conveyancing.
Published April 25th 2026

This is one of the most common worries that lands in our inbox before settlement on a Melbourne apartment. The owners corporation has held a meeting, a special levy has been approved, and the buyer wants to know whether they are about to inherit a bill for repairs, cladding, lifts or insurance.

The short answer: If a special levy is struck after the contract is signed but before settlement, the vendor should usually clear it at settlement because they were the lot owner when the levy was approved. The key document is a fresh owners corporation certificate under section 151 of the Owners Corporations Act 2006 (Vic), which should show approved special fees, unpaid amounts, repairs, insurance and recent resolutions. If the levy was already known or effectively locked in and the Section 32 did not disclose it, section 32K of the Sale of Land Act 1962 (Vic) may give the buyer a right to rescind before accepting title.

Who pays a special levy announced before settlement?

The starting point is timing. In Victoria, a special levy is a special fee or charge raised by the owners corporation for extraordinary expenditure, such as major repairs, insurance gaps, legal costs or urgent works. If you need the plain-English overview of what a special levy is, start there first, then come back to the timing question.

For buyers, the practical rule is simple:

Levy approved before the contract is signed: the levy should be disclosed in the Section 32 and dealt with before or at settlement.
Levy approved after signing but before settlement: the vendor should usually pay or allow a settlement adjustment, because they were still the owner when the levy was approved.
Levy approved after settlement: the buyer usually wears it, because they are now the lot owner.

The risk for buyers is that unpaid owners corporation amounts can follow the lot. So even where the vendor should pay as between buyer and seller, you still want the amount cleared from the vendor’s sale proceeds before settlement completes. Do not rely on a friendly promise that it will be fixed later.

Why does the approval date matter more than the payment due date?

The approval date matters because that is when the owners corporation decides to levy the fee. The due date tells you when payment is required, but it does not usually change the fact that the levy was approved while the vendor owned the lot.

This is different from council rates or water charges. Those are usually adjusted by days of ownership. A special levy is not normally split day by day. It is a one-off amount tied to a decision of the owners corporation.

For example, if an owners corporation in Southbank resolves on 10 June to raise a $12,000 levy per lot for lift replacement, and settlement is due on 25 June, your conveyancer should treat that as a pre-settlement issue. The vendor is still on title when the decision is made. The safest outcome is for the levy to be paid from the vendor’s funds at settlement, or for the buyer to receive a clear adjustment that leaves them protected.

What should the Section 32 have disclosed?

If the property is affected by an owners corporation, the Section 32 must give the buyer owners corporation information or attach a current owners corporation certificate and required documents. That includes fees, proposed or approved charges, unpaid amounts, insurance, repairs, liabilities and AGM resolutions.

This is where the paper trail matters. If a special levy had already been approved when the Section 32 was prepared, it should not be hidden in the background. A buyer looking at a Brunswick apartment, a Docklands high-rise or a townhouse with shared driveways in Preston needs to see the real owners corporation position before signing.

There is a limited exception where the owners corporation is genuinely inactive. In Victoria, an inactive owners corporation has a specific legal meaning. It is not enough for the agent to say, ‘Nobody really does anything.’ If insurance has been held, fees have been fixed, or an AGM has happened within the relevant period, the shortcut may not apply.

We’ve seen this come up when an agent describes a small block as ‘basically inactive’, but the paperwork shows current insurance and a recent discussion about roof repairs. That is exactly the kind of gap a conveyancer should slow down and check before settlement pressure takes over.

Can you rescind if the levy was not disclosed?

You may be able to rescind if the missing levy makes the Section 32 false or incomplete in a way that matters. Section 32K can allow a purchaser to rescind before accepting title where the vendor supplied false information, failed to supply required information, or failed to give the Section 32 before the purchaser signed.

The clearest example is a levy that had already been approved before the contract was signed, but was not shown in the owners corporation certificate or Section 32 material. That is a serious disclosure problem.

A levy approved only after you signed is harder. The original Section 32 may have been accurate on the day it was given. The question then becomes what the vendor knew, what the owners corporation records already showed, and whether the issue was more than a vague possibility. A cladding funding decision, approved repair quote, building notice or meeting agenda can all matter.

If you think you may need to rescind a Victorian contract of sale, move quickly. The right is time sensitive. Once settlement completes and title is accepted, your options usually become harder, slower and more expensive.

Why your conveyancer should order a fresh owners corporation certificate

A fresh owners corporation certificate is one of the best ways to catch a levy before settlement. The certificate is meant to show the current financial and legal position of the owners corporation, including special fees approved, unpaid amounts, repairs, insurance and liabilities.

Consumer Affairs Victoria notes that Section 32 statements can be prepared well before sale. That is why buyers are often told to ask for a new certificate before settlement or inspect the owners corporation records. In practice, a certificate that looked fine at auction can become stale after an AGM, insurance renewal, special general meeting, VCAT dispute or repair decision.

There is no fixed expiry date in Victorian law, which is why our separate guide on how long an owners corporation certificate stays current is useful. The real test is accuracy. If the facts have moved, the certificate may no longer be safe to rely on.

In our practice, we treat the final fortnight before settlement as the danger zone for apartment purchases. That is when an updated certificate can reveal a levy that was not in the original contract pack, especially in buildings with active committees, ageing lifts, water ingress, façade works or insurance problems.

What should you check in the updated certificate?

The updated certificate should be read with the meeting minutes, insurance schedule and any recent notices. Do not skim the fee figure only. The warning signs are often buried in attachments.

Look closely for:

Approved special fees or levies
Check the approval date, amount, due date and whether the vendor has paid.
Unpaid owners corporation amounts
Arrears should be cleared before settlement. If they are not, the buyer can be left chasing the vendor after the transfer.
Recent AGM or special general meeting resolutions
A resolution approving façade repairs, lift works or urgent waterproofing can change the whole settlement adjustment.
Repairs that may create extra charges
Phrases like ‘funding model to be determined’ or ‘quotes to be circulated’ deserve follow-up.
Insurance changes
A sharp premium increase, rejected claim or low building sum insured can point to future fees or special levies.

If a fresh certificate shows a new levy, your conveyancer should write to the vendor’s representative before settlement and ask for it to be dealt with in the settlement statement. Keep that request in writing. It creates a clean record if the vendor pushes back.

What happens on settlement day?

If the vendor accepts responsibility, the levy is usually handled through the settlement adjustment statement. That means the amount is either paid directly to the owners corporation or allowed for so the buyer is not out of pocket after settlement.

If the vendor refuses, your conveyancer has to look at the contract, disclosure documents and timing. The usual options are:

ask for a settlement adjustment in the buyer’s favour
require the vendor to pay the owners corporation before settlement
delay settlement only where the contract and facts support that step
consider a rescission notice if the Section 32 defect is clear and time remains
negotiate a written undertaking only if it gives real protection

The golden rule is this: do not settle on vague comfort. Once the transfer registers, your bargaining power drops. You may still have a claim, but a post-settlement dispute is not where most buyers want to spend their first months of ownership.

What Melbourne issues most often lead to special levies?

Special levies in Melbourne apartment blocks usually come from a small number of pressure points. You will often see the signs before the formal levy lands.

Cladding and façade works are still a live issue for some apartment buildings. If the minutes mention combustible cladding, a building notice, façade audits or funding shortfalls, ask for the full history before you settle.

Lift replacement is common in older apartment buildings. A 1970s or 1980s block with ageing lifts and a thin maintenance fund can move from ‘future works’ to ‘special levy’ quickly.

Water ingress and balcony defects can lead to large, urgent bills. Watch for repeated references to leaks, concrete spalling, membrane failure or engineer reports.

Insurance pressure can also feed special levies. Rising premiums, rejected claims and owners corporation insurance shortfalls can leave the owners corporation needing extra funds at short notice.

Essential safety measures matter in high-rise and mixed-use buildings. Fire panel upgrades, stair pressurisation works and compliance notices can all create funding pressure.

For buyers, the pattern is more useful than any single line item. If the building has old services, thin funds, repeated defect discussions and an AGM due before settlement, do not treat the original certificate as the final word.

What should you do if a special levy appears before settlement?

Act quickly and keep everything in writing. The goal is to work out whether this is a clean settlement adjustment issue, a disclosure problem, or a more serious contract risk.

Send your conveyancer:

the levy notice
the meeting notice and agenda
the AGM or special general meeting minutes
the original Section 32
the owners corporation certificate attached to the contract
any email from the agent, vendor or owners corporation manager
any building notice, cladding letter, quote or insurance document

Then ask three questions:

When was the levy approved?
This tells you whether it arose before contract, between contract and settlement, or after settlement.
Was it disclosed properly?
This decides whether section 32K or another remedy needs to be considered.
How will it be cleared at settlement?
This protects you from paying first and arguing later.

A special levy does not always mean the deal is doomed. It does mean the settlement file needs urgent attention.

Frequently asked questions

Who pays a special levy struck between contract and settlement in Victoria?

The vendor should usually pay or allow for it at settlement if the levy was approved while the vendor was still the lot owner. The buyer should make sure the amount is cleared from the vendor’s sale proceeds or adjusted in writing before settlement completes. If the levy remains unpaid after settlement, it can create a practical risk for the new owner.

Can I rescind my Victorian apartment contract if a special levy is announced after I sign?

Possibly, but not automatically. If the vendor knew the levy was approved, imminent or effectively locked in and the Section 32 failed to disclose that position, section 32K of the Sale of Land Act 1962 (Vic) may be relevant. If the levy genuinely arose only after signing, the usual focus is a settlement adjustment rather than rescission.

What does section 32K of the Sale of Land Act cover?

Section 32K can let a purchaser rescind before accepting title where the vendor supplied false information, failed to supply required information, or failed to give the signed Section 32 before the purchaser signed. It is a timing-sensitive right. Buyers should get advice before settlement, not after the transfer has registered.

What is a section 151 owners corporation certificate and how fresh does mine need to be?

A section 151 certificate is the owners corporation’s snapshot of fees, levies, unpaid amounts, repairs, insurance, liabilities, contracts, notices and recent resolutions. The owners corporation must issue it within 10 business days after receiving a proper written request and fee. There is no fixed expiry date, but an AGM, new levy, insurance renewal, dispute or repair decision can make an older certificate unreliable.

Will the levy get pro-rated between the vendor and me like council rates do?

Usually no. Council rates and water charges are commonly adjusted by days of ownership, but a special levy is a one-off owners corporation charge. If the levy was approved before settlement, the safer approach is to have it paid or adjusted in full before the buyer takes title.

My Section 32 does not mention a levy, but the building is getting a cladding inspection. Should I be worried?

You should ask for more documents before you settle. A cladding inspection by itself may not mean a levy has been approved, but any building notice, funding letter, committee minutes or repair proposal can be relevant. Your conveyancer can compare the new material against the Section 32 and advise whether the disclosure looks incomplete.

Can I negotiate for the vendor to pay the levy even if the position is not clear?

Yes, negotiation is often the practical first step. A vendor may agree to pay or adjust the amount to keep settlement on track and avoid a dispute. The agreement should be recorded clearly in writing and reflected in the settlement figures wherever possible.

About the Pearson Chambers Conveyancing team

Pearson Chambers Conveyancing is a Melbourne-focused conveyancing team helping buyers and sellers with Section 32 reviews, contract checks and settlements across Victoria. We work with first home buyers every day, including people buying apartments, units and townhouses with owners corporation paperwork. Special levies, stale certificates and last-minute settlement adjustments are exactly the kinds of issues we deal with in day-to-day conveyancing.

Sources we consulted

Contact Pearson Chambers Conveyancing

If a special levy has been announced between contract and settlement, send us the paperwork as soon as you can. We can review the Section 32, check the owners corporation certificate, look at the levy timing and help you work out whether the next step is a settlement adjustment, further disclosure request, negotiation or rescission advice.

We offer a complimentary Section 32 contract review for Melbourne buyers.

Email: contact@pearsonchambers.com.au

General information only, current as at the date of publication. Victorian conveyancing rules and legislation change frequently. Please contact the Pearson Chambers Conveyancing team for advice on your specific contract.