Although lockdown restrictions are slowly easing across NSW, it can be confusing to understand what impact the Government’s COVID-19 Public Health Order has on NSW strata management, strata living and what is and not allowed within strata property environments.
To help your understanding, we have compiled a key list of essentials provided by Strata Community Association (NSW) and Fairtrading NSW that all strata managers need to know to operate day to day during this Coronavirus (COVID-19) pandemic.
If the Building Manager contracts COVID-19 or needs to self-isolate, this would typically be taken as sick leave. A contractor may need to be brought in to complete any necessary work on their behalf. It is the Building Manager’s duty and responsibility to advise their whole building of any precautions in place including extra cleaning, or no contact with common areas such as lift buttons or doors and fire safety.
The Australian Government Department of Health has produced an informative cleaning guide called ‘the Environmental cleaning and disinfection principles for COVID-19’. All cleaners, caretakers, Building Managers and Strata Managers should reference this when discussing cleaning plans.
As an extra precaution if Committees have concerns, the strata building’s cleaning company can be asked to:
- Increase the number of cleans, length of clean, what gets cleaned; and
- Send you their Coronavirus cleaning plan that outlines how they are handling the situation.
All Owners should reduce use of common areas or shared facilities to protect themselves and the strata community from the spread of the virus. However, the common property must still be maintained and be in good condition. If shared facilities such as gyms, swimming pools and barbecues are in use then physical distancing and good hygiene practices should occur with only one person per four square metres.
Before issuing demands to owners who might be having problems paying their levies, make the time to talk with them or the property manager on behalf of the owner. Keep in mind that some owners may have lost their jobs or are working reduced hours. They might also be relying on income from short-term letting guests.
Instead, consider working with committees and owners to find a resolution such as waiving interest and implementing formal approved payment plans or an ‘informal’ payment plan if appropriate at this time. You should assess this per each individual’s requirements.
Increased Building Loads
With more Sydney strata residents working from home or self-isolating, this will put an increased load on buildings throughout the strata industry including a higher water and utility consumption. Building Managers and Committees should make plans to reduce these increased costs if not already considered and plan for a lengthier lockdown, with discussions on how to manage:
• Additional cleaning and garbage services
• Increased water and utility bills
• Likelihood of increased expenses for plumbing and other under pressure infrastructure maintenance
Cash flow Management
With health and government agencies predicting that we will be dealing with the impacts of the COVID-19 pandemic for many months, it’s essential to ensure responsible cash flow management both now and in the immediate future.
Factors to consider include:
- Owners and Tenants seeking financial relief due to being made redundant or on a reduced salary.
- Owners may request exemptions or deferments of levy payments, which unless Government provides some assistance or passes legislation, can only be dealt with on a building per building level.
- The increase in building loads, with some Owners potentially falling into arrears at the same time due to being unable to collect rent.
The strata manager or committee treasurer can also review potential costs in the budget that might be deferred or lowered that are non-essential to help temporarily reduce running costs.
- Deferring special levies unless they relate directly to health and safety work
- Deferring non-essential works to free up funds for increased cleaning and waste management
Owners corporations can also consider taking out a strata loan to cover shortfalls if needed.
Strata Committee Meetings
To comply with Health orders, all face to face meetings including strata committee meetings and general meetings should be limited. However, to allow Committees the flexibility to continue to function, the NSW Government has made temporary changes to the law, which will remain in place for six months to help strata and community associations manage their responsibilities during COVID-19.
As of Friday 5 June 2020, strata and community land laws have been changed so owners corporations (body corporate) and community associations can:
- Meet and vote at general and committee meetings electronically
- Provide an alternative to affixing the common seal so documents can be validly executed with electronic signatures
- Now have six months to hold the first annual general meeting for new schemes and to determine how to reimburse money transferred from one fund to another.
All strata schemes and community associations are able to meet and vote electronically at general and committee meetings. However, some schemes may still hold in person meetings and paper ballots for voting, as long as the public health advice is followed about physical distancing and hygiene.
Meeting notices and other documents under the new law can also be emailed to reduce physical points of contact.
To learn more about how COVID-19 affects your Sydney strata property, contact your strata manager or strata managing agent at The Strata Collective today.