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‘Double trouble’: What the health crisis means for strata communities

‘Double trouble’: What the health crisis means for strata communities

by Bianca Dabu | March 30, 2020 | 1 minute read

As strata communities deal with a double dose of the coronavirus (COVID-19) pandemic impact, how can investors make sure to stay afloat in the coming months?

Grant Mifsud
March 30, 2020

With on-site facilities having to be closed for health reasons and some unit owners now struggling to pay body corporate levies, strata communities are now facing a ‘double trouble’, according to Archers the Strata Professionals.

Archers the Strata Professionals Partner Grant Mifsud said that the economic impact of COVID-19 had hit hard, with bodies corporate reporting some owners are unable to pay levies because they have lost their jobs or their tenants have stopped paying them rent.

“More than two million Australians live in strata communities and the body corporate is like the fourth layer of government for residents as they make the majority of decisions for the community including financial contributions and management of common facilities,” Mr Mifsud said.

“Levies are the lifeblood of the body corporate system as they cover the cost of maintaining the building, insurance and other running costs.

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“The levies are typically fixed every financial year at the annual general meeting (AGM) for the body corporate and are based on budgets prepared by the committee that are approved by the owners at the AGM.”

Social distancing has also made it difficult for bodies corporate to actually hold a meeting, which makes the issue of someone saying they can’t pay levies or wanting to adjust levies even more complicated as a meeting is needed to deal with the issue.

Nowadays, both owners and professionals are utilising video and teleconferencing to overcome the said issue.

According to Mr Mifsud: “With the federal government considering relief for people struggling to pay their rent, the body corporate is left to consider relief of strata levies as the fourth layer of government in place for strata communities in response to COVID-19.”

Further, as health issues for body corporates have also magnified, particularly for buildings housing community facilities such as swimming pools, gymnasiums, lifts and barbecue areas, community gatherings have been banned under stage two restrictions, while private swimming pools and gymnasiums in strata communities are being closed to comply with social distancing requirements.

“Social distancing problems also arise with using lifts as only one person should be travelling in a lift at a time to comply with the 4 square metre per person rule.”

Another issue for bodies corporate as a result of COVID-19 is people staying in short-term rentals for self-isolating if they have returned from interstate, overseas or are recovering from the virus.

Mr Mifsud and his team have received reports of people making Airbnb bookings to self-isolate.

While they have no obligation to inform the community they are living within close proximity about their condition, it’s only right that they do so that measures can be taken to prohibit use of shared facilities while contagious, he said.

Owners renting out their properties through Airbnb and other online platforms are strongly advised to closely monitor who is staying in their unit and what bookings they accept, particularly following the stay so that adequate sanitation occurs for the next guest.

“It’s important for the owners to be aware of why their guests are choosing to stay during the current lockdown as many apartments are part of a resort or holiday complex so there would be a greater risk to others staying in the property,” Mr Mifsud highlighted.

Those who have been overseas and are feeling well are still advised to self-quarantine for 14 days from the date they arrived in Australia.

Self-quarantine generally means staying in your home, hotel room or provided accommodation, and not leaving for the period you are required to quarantine. No visitors are allowed.

As the current situation is fast-changing, the college urges owners and strata managers to consult a strata lawyer qualified to practice in their state and seek legal advice specific to their building.

‘Double trouble’: What the health crisis means for strata communities
Grant Mifsud
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