Tips for Owners Corporations, Strata Committees and Strata Managers — COVID-19
In these unprecedented times, there is a lot of uncertainty for businesses and individuals. This uncertainty extends to the ongoing and satisfactory functioning of an owners corporation.
Strata Managers and Strata Committees should be aware of their ongoing obligations to ensure that an owners corporation continues to function satisfactorily during the Covid ‑19 disruptions.
In the case of financial hardship of its owners, a Strata Committee may wish to initiate a review of the current viability of the administration fund and capital works fund of the owners corporation, consider upcoming essential payments, and, if possible, resolve to allow owners:
- an extension of time to pay their scheduled levies;
- to submit a payment plan for approval; and
- waive interest for late payments if an approved payment plan is put in place.
In considering any adjustment to the levies payments, a Strata Committee should carefully consider the owners corporations budget commitments before proposing any motions for resolution at a general meeting.
In today’s modern world, and with the implementation of Clause 14 in the Strata Scheme Management Regulation 2016 (Regulations), an owners corporation or a strata committee, may by resolution adopt:
‘(a) voting by means of teleconference, video-conferencing, email or other electronic means while participating in a meeting from a remote location,
(b) voting by means of email or other electronic means before the meeting at which the matter (not being an election) is to be determined by the corporation or committee (pre-meeting electronic voting)’.
All ongoing matters requiring discussion and resolution at a general meeting or a strata committee meeting, do not need to stop and can be addressed remotely or electronically if conducted in accordance with the Regulations.
Annual General Meetings should still be held, remotely or electronically, in accordance with the Strata Schemes Management Act 2015 (the Act) although there is a call for Government intervention to avoid penalties being imposed on owners corporations for not holding their AGM in accordance with legislative requirements.
By-laws and registration of by-laws
Proposed by-laws may still be considered and specially resolved at General Meetings which can be held in the matter as noted above.
The owners corporation is still required to register any change of by-laws specially resolved at a General Meeting within 6 months of the special resolution being passed.
Building defect claims
If the owners corporation has building defects and is within its two and/or six year warranty periods under the Home Building Act 1989, statutory time limits still apply and action should be taken to protect the interests of the owners corporation as usual. No extensions of time will be allowed for bringing a claim against, or notifying a builder, developer or home owners warranty insurer, unless further legislation is passed authorising such extension and there is no indication at all that this will happen.
The Courts and Tribunal and legal offices remain open at this time (albeit operating remotely in part) and legal advice should be sought and claims brought within the statutory time limits applicable to your scheme. If you are unaware of what these time limits are please seek legal advice.
If the owners corporation has entered into a contract with a third party for the provision of services, remedial building works or some other arrangement, if the shutdowns impact the third party, the contract terms should be reviewed and consideration given as to the impact of what Covid-19 means for the contract.
Essential services should continue uninterrupted although there will be supply shortages in some instances. Remedial building works should also continue in the interim unless further closures are announced by the NSW Government.
Should you require legal advice about any issue impacting your strata scheme please contact Helen Kowal Partner, Swaab to discuss on 9777 8321.