What if an Owners Corporation Can’t Meet its Obligations During Coronavirus?
COVID-19 has thrown up some unique situations, and with many people out of a job or underemployed there may well be strata owners corporations that are looking to keep costs to a minimum. It’s important to first note that owners corporations remain obligated to keep the strata properties in a safe and working condition, and to take appropriate steps to ensure the safety of owners and residents.
But what if an owners corporation can’t meet its obligations as a result of COVID-19?
There are a number of options to consider that could ease the pressure on owners corporations.
First, there are options to ease financial pressure for individual property owners This might include payment plans or the waiving of interest on an individual basis. Owners corporations are not obligated to waive any debt or interest, but considering each application on a case-by-case basis may help owners to keep their payments up and therefore support the owners corporation during this time.
Secondly, there is the adjusting of strata services. While owners corporations might be increasing cleaning frequency of common areas such as door handles, laundry equipment and lift buttons, shared recreational areas such as swimming pools and gyms should currently be closed for everyone’s safety and wellbeing. As such a decision might be made to minimise unnecessary services in regards to these closed facilities. Of course, maintenance should be kept up as needed to minimise the risk of any costly repairs in the long run.
The strata plan for each owners corporation will be unique, and there may be a need to hold an Extraordinary General Meeting to discuss how to set the budget moving forward. There may be discussions on how to allocate funds from your strata administrative and capital funds to cover expenses until people can make payments, and planned upcoming projects might be adjusted. If expenses are starting to add up, there are also solutions for cash flow funding in the short term. But by taking active and early steps to encourage owners’ levy payments with clear communication and individual consideration, owners corporations will be able to maintain as much normal cash flow as possible.
If you are seeking advice, we’d suggest getting in touch with your strata manager who can help you consider the options.
Here at Jamesons Strata Management we’re still providing all of our regular strata services, with due considerations for social distancing in place. You can find up-to-date information about strata schemes and Coronavirus on our COVID-19 page, as well as on the dedicated information page at Fair Trading NSW.