The effects of the Covid-19 virus are far ranging. Owners Corporations and Community Associations are and can also be affected by this, as some owners may be stood down, have reduced hours or work or own a business that has been affected.
What are some of the items that your committee and building can do to assist owners that may be affected financially?
Review Budget Your building can review its current budget to see if there are any items that have been budgeted for that you may wish to push back to a further date or into the future.
This may be some large capital expenditure items or items that you had budgeted for in your Capital Fund that you may not carry out over the next 12-months and push back to be done 2-years or further down the track.
To do this, your building will need to conduct an Extraordinary General Meeting, should an AGM not be forthcoming, to pass a resolution.
Turning-Off Interest Against Levies Your building can decide to turn the interest component off for levies that are outstanding or overdue.
This would assist those owners that may be struggling to keep up with levy payments or are only in a position to make a part payment of their levy.
This would require a resolution to be passed at a General Meeting that is applied to all lots so that no interest is accrued against any unit/lot for a period of time.
Our recommendation would be to turn-off the interest until 1 January 2021; however the committee can make a recommendation to either extend this period or shorten the period as recommended for the General Meeting.
Loan Through Financial Institution In the event that your building requires additional funds, outside of raising a special levy or increasing levies significantly, you can look at taking out either a short-term or long-term loan.
The loan would need to be budgeted for, therefore a change to your budget and levies would be required. Bearing in mind, some financial institutions to provide interest only for a period of time.
There are several financial institutions that provide strata loans to buildings over a period ranging from 1 – 7 years and a mixture of Interest Only and Principle and Interest. Owners Struggling with Levy Repayments Owners that are struggling with their levy payments or have been affected financially by Covid-19, should contact our office in writing, so we can review and discuss your individual circumstances with the committee of your building.
If affected by Covid-19, such as a stand down or loss or your job, you will be required to provide evidence accordingly.
Your committee should in consultation with its Strata Manager, at Foreshew Strata Agency, review its current financial position as well as forecasting of expenses and income before proceeding with any one of the above recommendations.
Should you require further information or assistance, please contact your Strata Manager or our office.