Strata & Owners Corporations in the age of COVID-19 (NSW)

Strata managers or committees can make alternate arrangements to vote and discuss strata issues if they do not want to attend strata meetings in person.

The options available include voting in writing, email, teleconference or via other technologies, as well as voting by proxy – however, there are limits on the number of proxies that any lot owner can hold on behalf of other lot owners.

If an owners corporation has not previously passed a resolution to accept voting by means other than in person, they only have the option of an in-person meeting.

For small schemes, it may be possible to continue in-person meetings while observing the current social distancing and gathering orders from NSW Health.

Fair Trading understands this presents a problem for larger schemes in the current environment and is reviewing the situation.

Grounds for challenging resolutions

Decisions can only be made by parties who have the authority to do so.

Such authorities are often granted in managing agency agreements which delegate some or all of the functions of the strata committee to a licensed managing agent.

Those agreements can also place limitations on the agent’s authority to act, for example by placing a cap on the amount of the owner's corporation’s money they can spend on repairs and maintenance.

Likewise, decisions of the owners corporation, found in minutes of owners corporation meetings, may restrict how much a strata committee can spend without urgent approval.

Owners can challenge a decision made by a strata manager or strata committees where they do not have the approval to make that decision under the scheme rules.

Essential Services in Strata Buildings

The legislation does not provide a definition of what is an essential service for a strata scheme.

In the current situation, any services that contribute to the safety, health of residents and maintenance of minimum living standards should be considered by the owner's corporation.

For example, lighting for an underground garage may be considered more essential than lighting in a common property pool or meeting room.

For now, repairs and maintenance work (such as fire safety inspections, fitting of window safety devices, fixing defects and/or other inspections and certifications) should still be funded using administration and capital works accounts which already have funds due to levies paid over previous years.

Once these funds are exhausted, the owners corporation may consider moving funds between these accounts.

However, the law requires that money to be reimbursed and requires the owner's corporation, within three months of money being transferred or used for the other account’s purposes, to determine the amount that will be levied on lot owners so that the relevant account can be reimbursed.

The owner's corporation may request the strata manager to source a strata loan if any urgent repairs are required to maintain the safety, health and minimum standards for the building and common property, and the owner's corporation’s administrative or capital works funds are inadequate for the job.

During the Coronavirus (COVID-19) situation, urgent repairs and maintenance should only be carried out if they are necessary for the safety, health and minimum standards of residents. When repairs are carried out, social distancing measures must be maintained.

What if a person with COVID-19 uses common property

The strata manager has an obligation to "act in the client's best interests” which includes communicating with residents on health guidelines as they affect closure of common areas such as pools, spas, community halls and gymnasiums.

Owners corporations must hold an annual general meeting (AGM) every financial year. However, there is no penalty attached to non-compliance with this requirement.

Owners corporations can hold additional general meetings throughout the financial year if they are needed – these are known as Extraordinary General Meetings.

Source : https://www.fairtrading.nsw.gov.au/resource-library/publications/coronavirus-covid-19/property

Don’t forget to upload all relevant documents and minutes for meetings onto the RealRenta platform to form part of the tenancy file.

If you are not a RealRenta Landlord, join now and save 50% off the normal subscription fee. https://mailchi.mp/realrenta/50-deal-2020

Email Jason @ jason@realrenta.com

Jason Gwerder
Friday, 17 April 2020

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