The devastating effects the COVID-19 pandemic is having on our health systems, the housing sector, unemployment rates and the economy in general are well documented.
Less well known are the indirect impacts the pandemic will have on the Strata Sector and specifically the residents that live within multi-residential properties.
With a Stage 3 shutdown now in full effect and more and more residents working from home, we have seen a significant increase in building loads, specifically;
Due to the unforeseen nature of COVID-19, many Owners Corporation’s would not have budgeted adequately for these additional expenses.
The increase in building expenditure comes at a time when levy arrears for many buildings will increase due to the devastating financial impact the COVID-19 pandemic is having on the economy and rental market.
Your strata levies contribute to the ongoing running costs of your Owners Corporation including;
Unlike many other sectors, there is currently no Government stimulus available for owners within Strata Schemes to assist with levy payments or over-stretched budgets.
The government has announced numerous stimulus packages that are available to both individuals and businesses that have been impacted by Owners that are facing financial hardship, these include;
For more details regarding these stimulus see the following link https://treasury.gov.au/coronavirus
Aside from this, many banking and financial institutions are providing mortgage relief to customers by deferring mortgage payments. For more details we urge you to speak with your Bank or Mortgage broker.
Our office has already reached out to many of the suppliers to your Owners Corporation, particularly larger corporate entities seeking extended credit terms. It is likely that most strata insurers will offer payment plans for Insurance Premiums (at no additional cost) and utility providers such as gas, water, telephone and electricity have also indicated they will defer payments without suspending services and without penalty.
It is important that a steady and predictable cashflow for your scheme be maintained so smaller operators such as cleaners, gardeners and trades can continue to service your scheme and receive regular payment for their services.
We will continue to manage the cashflow for your scheme closely and if necessary, we will liaise directly with your committee regarding the possible reallocation of budget expenditure, however this will only occur on an as required basis.
We also appreciate that many owners are currently facing extreme and unexpected financial hardship, through absolutely no fault of their own. Our office, in conjunction with your committee and Owners Corporation will do what we can to assist these owners through these troubling financial times. This may include the waiving of interest on Strata Levies as well as the introduction of payment plans for levies to assist owners through these difficult financial times.
With no government stimulus available for Owners Corporations, the ongoing financial administration of your strata property is 100% reliant on strata levy contributions made by owners. Never has there been a greater need for a steady and predictable cashflow for your Owners Corporation to meet ongoing and increased expenses.
The cashflow management of your Owners Corporation will become paramount over the next few months and we will be in constant communication with your Strata Committee and the owners within your scheme to ensure that vital services are maintained throughout the shutdown and COVID-19 pandemic.
Be assured we appreciate the importance of our role in guiding your scheme through the COVID-19 crisis and will be available to you throughout this crisis.
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