Temporary COVID-19 Changes for NSW Strata and Community Associations

23 June 20

TEMPORARY COVID - 19 CHANGES FOR NSW STRATA AND COMMUNITY ASSOCIATIONS

In response to the impact of COVID-19 on Strata and Community Schemes, the NSW Government has made temporary changes to the law to give schemes the flexibility they need to function.

The following changes commenced on 5 June 2020 and will remain in place for six months.

Electronic Voting

All Strata Schemes and Community Associations in NSW can now meet and vote electronically (teleconference, videoconference, email or other electronic means) at general and committee meetings.

Previously, Strata Schemes could only meet and vote electronically if the Owners Corporation or Strata Committee had adopted a resolution to allow it.

Community Schemes laws didn’t provide for electronic voting.

To ensure these owners aren’t excluded or disadvantaged, the scheme’s secretary must take reasonable steps to ensure all owners can participate in and vote at meetings.

At a minimum, the secretary must ensure the technology chosen:

• is accessible to all lot owners
• doesn’t incur unreasonable expenses for individual lot owners to use
• has easy to follow instructions readily available.

Note however, that the new laws simply provide schemes with the option to meet and vote validly by electronic means. It is not mandatory to do so.

Some schemes may be able to continue holding meetings in person and paper ballots for voting, as long as they follow public health advice about physical distancing and hygiene.

The new laws also allow for meeting notices and other documents to be served by email, rather than hard copy, reducing points of contact.

Schemes may also decide to adopt a resolution to continue to meet and vote electronically after the temporary regulations expire.

Common areas and shared facilities

Shared facilities can remain open as long as restrictions are in place including physical distancing and hygiene. Most importantly, only one person per four square metres is allowed in each space.

These facilities can include:

• swimming pools, saunas and spas;
• barbeques;
• gyms;
• rooftop gardens;
• indoor recreation rooms (for example, games rooms);
• outdoor or indoor playgrounds.

These facilities can be open for residents (as they aren't a facility open to members of the public). However, facilities need to operate safely and comply with physical distancing and hygiene measures.

If an Owners Corporation temporarily closes facilities on the common property, a notice of closure must be posted so all residents are aware.

Hygiene

Owners Corporations must also consider cleaning common areas more frequently.

In particular, frequent points of contact such as door handles, handrails, light switches, lift buttons, and garbage chutes and rooms must be disinfected more regularly.

Strata managers, committees, building managers and contract cleaners must have procedures in place to ensure cleaning practices conform to the Department of Health’s COVID – 19 policies.

Levies and contributions

The NSW Government acknowledges that some owners are experiencing financial hardship as a result of COVID-19 and non-payment of levy contributions impacts the ability of Owners Corporations to manage and maintain the property.

The financial impact on schemes will vary depending on the proportion of affected owners and the financial position of the scheme.

Owners Corporations by resolution at a general meeting can enter into a payment plan for overdue contributions. The payment plan is limited to a 12 month period.

Subject to a resolution at a general meeting, the scheme can also agree to reduce contributions by 10% if they are paid before their due date.

Levy contributions in arrears accrue interest at a rate of 10%. The interest is payable if the contribution is not paid within one month of the contribution being due and payable.

Owners Corporations can now decide, by resolution at a general meeting, that no interest applies to individual lot owners or across all lot owners.

Currently, there is no provision available to reduce the interest rate.

The strata manager or committee treasurer can also review potential costs in the budget by:-

• deferring special levies unless they relate directly to health and safety work,
• deferring non-essential works to free up funds for increased cleaning and waste management.

Owners corporations can also consider taking out a strata loan to cover shortfalls if needed.

Article Written by Col Myers of Small Myers Hughes Lawyers 

Liability limited by a scheme approved under Professional Standards Legislation
Disclaimer – This article is provided for information purposes only and should not be regarded as legal advice.
 

Additional Documents

Click here to download: 2020_07_Jul___Temporary_COVID___19_Changes_for_NSW_Strata_and_Community_Associations__002_.pdf

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