15. Understanding levies
Levies, also known as demanded contributions, refer to additional charges imposed by the Commonhold Association to cover unexpected expenses or specific projects that go beyond the scope of regular assessments. Levies are typically enacted when there is an urgent need for funds to address unforeseen repairs or improvements that cannot be deferred. These charges are essential for ensuring that the association can promptly address critical issues without compromising the property's condition.
Here are some key aspects:
| Nature of charges | Levies are not routine or recurring charges. Instead, they are imposed in response to urgent needs for funds, addressing unforeseen repairs or improvements that cannot be deferred. These charges are essential for maintaining the property's condition and addressing critical issues promptly. |
| Reasons for imposing levies | Levies are typically enacted when there is an urgent need for funds that exceeds the financial capacity covered by regular assessments. These funds may be required for unexpected repairs, emergency situations, or specific projects that are crucial for the property's well-being. |
| Flexibility and responsiveness | The imposition of levies reflects the flexibility and responsiveness of the Commonhold Association in addressing unforeseen circumstances. It allows the association to adapt to changing needs and promptly allocate resources for critical projects without delay. |
| Communication and notification | Effective communication is key when it comes to levies. Unit-holders should be promptly notified of the reasons behind the imposition of levies, the specific projects or expenses they aim to cover, and the timeline for contributions. Transparency in communication builds trust and understanding among the community. |
| Temporary nature | Levies are generally temporary and situational. Once the urgent need for funds is addressed, the association can return to regular assessments for ongoing expenses. This ensures that unit-holders are not burdened with additional charges beyond what is necessary for the specific situation. |
| Financial planning and contingency | Understanding levies is an integral part of the Commonhold Association's financial planning and contingency measures. It allows the association to have a mechanism in place to swiftly respond to unexpected financial requirements, demonstrating prudent financial management. |
| Potential impact on unit-holders | Potential buyers should be informed about the possibility of levies and their potential impact on unit-holders. This information enables buyers to assess the association's financial practices and their own potential financial responsibilities in the face of unforeseen circumstances. |
| Legal compliance | Ensure that the imposition of levies complies with any legal requirements or regulations governing Commonhold Associations in your jurisdiction. Adhering to legal standards is essential for the association's financial and legal integrity. |
By understanding levies, both unit-holders and potential buyers can appreciate the association's ability to respond to unforeseen challenges and its commitment to maintaining the property's condition without compromising on financial stability.