How to manage strata finances if levies dry up

This topic has 20 replies, 7 voices, and was last updated 8 months, 3 weeks ago by .

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31/03/2020 at 9:27 am #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.flat-chat.com.au/lost-levies/
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04/04/2020 at 9:51 am #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.

04/04/2020 at 9:39 am #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!

03/04/2020 at 4:01 pm #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.
- This reply was modified 9 months, 3 weeks ago by .
03/04/2020 at 3:09 pm #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.

03/04/2020 at 1:58 pm #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?
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