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  • #49287
    Jimmy-T
    Keymaster

      There’s a lot of talk around at the moment about rent and mortgage support, to help individuals and families whose income has been hit by the coronavirus.

      We touched on it in the answer to this post in the Forum, where we point out it’s not as simple as saying “Ok, take a break from paying your levies this …
      https://www.flatchat.com.au/lost-levies/

      The opinions offered in these Forum posts and replies are not intended to be taken as legal advice. Readers with serious issues should consult experienced strata lawyers.
    Viewing 15 replies - 1 through 15 (of 20 total)
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    • #49293
      Ziggy
      Flatchatter

        Like most people, I’ve lost one third of my savings due to the coronavirus. I would like to ask our Strata Manager if we could reduce our levies.
        I know this is usually done at the AGM, but can a General Meeting be held (via email or online) to ask for this reduction?

        #49297
        scotlandx
        Strataguru

          As Jimmy has set out, it’s not that simple. We have one owner who wants a six month levy holiday to be applied across the board, that is just not feasible – I am not sure what they think will happen if urgent works are required.

          The levies are determined at the AGM, by reference to the budget, i.e. the projected outgoings for the year. So for example if the OC knows that its projected expenses over the coming year are going to be $10K, it can’t say we we will only raise $5K.

          Mixed into that is the OC’s overall obligation to maintain the common property – if you don’t have enough money for that then you are in breach of the Act.

          One thing you can do is call a general meeting and ask the owners to agree to a payment plan for your payment of levies, this would give you a degree of certainty and mean that while you still owe the money you won’t pay interest or be subject to recovery action.

          In answer to your question – you can hold a general meeting or vote on a resolution by electronic or other means if the owners vote to adopt that method.

           

          #49302
          Jimmy-T
          Keymaster
          Chat-starter

            Scottie’s beaten me to the punch, here (again). But have a look at this and you’ll see why what she says is right on the money (no pun intended) … and why there are other potential consequences too.

            The levies have been set to pay for anticipated costs.  Most of those costs won’t go away so you’re asking for a whole new budget with, potentially a minor reduction in your payments.

            Negotiate, as Scottie said. That offers your best potential outcome.

            The opinions offered in these Forum posts and replies are not intended to be taken as legal advice. Readers with serious issues should consult experienced strata lawyers.
            #49305
            Ziggy
            Flatchatter

              Thanks Scottie and Jimmy. I live in a block that has no garden, no pool, a new lift, and has a healthy Capital Works fund. Currently, there are no special levies being paid.

              I pay $1700 a quarter in strata levies, which I think is already an exorbitant amount. Each day, I get emails from companies telling me they are taking the coronavirus into consideration and not charging me eg unlimited wifi, extended bundles on cable TV, no membership fees, no hikes in health fund fees etc etc.

              We all need help in these troublesome financial times. And that includes Strata Land!

              #49307
              Jimmy-T
              Keymaster
              Chat-starter

                Point taken, but the answer may be to ask your owners corp to reduce everyone’s contribution by using some of the capital works funds. Or at least allow you to delay payment without a penalty.

                All the companies you have mentioned are probably making “sacrifices” that cost them no money. Owners corps work on a simple money-in, money-out basis.

                If your owners corp can’t pay contractors, then the services will cease, people will lose their jobs and your quality of life could be severely impacted, right at the point when you are spending more time at home.

                If the finances aren’t being properly managed, leading to excessive levies, that’s an issue for your AGM when they are approved or otherwise.

                You could always try to identify some potential savings right now, but the word we’re getting from strata managers is that the demand for cleaning services, with more people staying at home, has gone up, not down.

                 

                The opinions offered in these Forum posts and replies are not intended to be taken as legal advice. Readers with serious issues should consult experienced strata lawyers.
                #49312
                Sir Humphrey
                Strataguru

                  Here’s an idea:

                  When our OC passes a resolution at its AGM to approve a budget and levies, it specifies the amount of the annual levy and what fractions of that levy will be due on what dates. An option might be to keep the levy at the level it would need to be to cover the budget but resolve that the due dates shall be much later than they would usually be.

                  Explain to owners that this is to allow lee-way for a subset of owners facing financial hardship. Explain that the hope is that everyone who can pay would continue to pay by the usual due dates to help with the OC’s liquidity. When issuing the levy notices on the usual dates, make it clear that most owners should not take advantage of the later-than-usual due dates unless they really need it. Make it clear that once the later-than-usual due date has passed, the OC could then proceed with normal debt recovery action.

                  This would be manageable for the OC if it has sufficient cash in the bank to cover expenses early in its financial year with less income.

                  #49344
                  Ziggy
                  Flatchatter

                    Thanks everyone. I have written to our Strata Manager who responded by saying she’s forwarding my email to the Strata Committee for their approval to hold a General Meeting.

                    Eh? Is that the appropriate response? I thought she should be asking the Owners Corporation?

                    #49352
                    Jimmy-T
                    Keymaster
                    Chat-starter

                      Ummm … the general meeting will be of the Owners Corporation, but someone needs to call it, and that would be the committee.

                      Also, if you are seriously strapped for cash, you might inquire about a payment plan, and to be excused from penalty interest (which also requires a general meeting).

                      But I was chatting to a senior strata manager today and he said that a lot of OCs are saying they want to reduce their levies and his response was that costs are likely to go up, due to more people working from home, while the relevant question is, which item in your budget was an over-expenditure when you agreed to it at your last AGM?

                      The opinions offered in these Forum posts and replies are not intended to be taken as legal advice. Readers with serious issues should consult experienced strata lawyers.
                      #49359
                      Ziggy
                      Flatchatter

                        I thought owners entitled to vote, who together hold at least a quarter of the total unit entitlements, can ask for a meeting in writing.

                        #49365
                        Jimmy-T
                        Keymaster
                        Chat-starter

                          Ziggy said:

                          I thought owners entitled to vote, who together hold at least a quarter of the total unit entitlements, can ask for a meeting in writing.

                          Yes, that’s true.  Have you done that?  You didn’t mention it previously. You only said you had requested a meeting. Or are you just correcting my previous statement?

                          The opinions offered in these Forum posts and replies are not intended to be taken as legal advice. Readers with serious issues should consult experienced strata lawyers.
                          #49372
                          Ziggy
                          Flatchatter

                            Sorry Jimmy I didn’t mention that. I didn’t think the SM would send it onto the SC! I was hoping for some advise from her. Will do so if the SC reject my suggestion or I don’t get an answer.

                            #49411
                            LKY
                            Flatchatter

                              Our Strata passed the budget at the AGM last year,2019. Usually, we hold the AGM in July / August and the levies for March & June quarters are the same as those for September & December Quarters.

                              Now my question is : what happens if we do not hold the AGM in July or August or even later say up to December end. Strata Act allows AGM to be held any time during the FY up to end of February literally.

                              So in the absence of AGM in July / August on account of COVID-19, can the levy collected in June be repeated for September & December quarters without any advice or action  ?

                              #49488
                              Ziggy
                              Flatchatter

                                Can the SC alone decide not to reduce/defer Strata levies? Isn’t that up to the OC?

                                #49516
                                kaindub
                                Flatchatter

                                  LKY

                                  the OC  cannot collect levies unless a motion for them has been passed at a General meeting.

                                  Get your strata manger to arrange a general meeting where he us the only one in attendance to allow electronic or other means of voting. Then in the future you can hold AGM by teleconference or videoconference and pass all the necessary motions of an AGM.

                                   

                                  #49591
                                  Ziggy
                                  Flatchatter

                                    I have asked the Strata Manager again to call a General Meeting. I have asked for the financial statements. I have heard or received nothing.

                                    One person on the Strata Committee has told me they will not consider the lowering of Strata levies as they plan to spend all of the Capital Works funds + levies on repairs. There was no SC meeting to discuss this and no contact with the Owners Corporation.

                                    What can I do to call the meeting? I have support from a number of other owners and I presume the SC who will need to explain this unilateral decision.

                                  Viewing 15 replies - 1 through 15 (of 20 total)
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