Body corporate guide: how to best survive coronavirus

Body corporate committees are being warned to not stop maintenance of Gold Coast buildings or rip up subcontracting contracts due to financial woes caused by coronavirus.

BODY corporate committees are being urged to continue maintenance of Gold Coast buildings and subcontracting contracts despite financial woes caused by coronavirus.

The Bulletin this month reported out-of-work unit owners were furious about paying thousands of dollars in body corporate levies at apartment towers where swimming pools and gyms were closed.

Surfers Paradise skyline — some buildings waiving fees. Picture: Jerad Williams.

Some committees at super towers in the heart of the Glitter Strip are about to rescind levies from $500 to $2000 a quarter but the State’s peak body for strata title property management is warning about the long-term financial side effects.

Strata Community Association president James Nickless predicts cancelling maintenance work would have a severe and costly impact on the workflow and budgets of buildings.

“Even if common facilities like pools and gyms are closed due to the COVID-19 government restrictions, there may still be fixed maintenance and management costs for these areas and there is an obligation to ensure common property is in a safe condition,” he said.

“In some instances, we have heard reports of increased costs due to heightened sanitisation of common property and increased security required for the complex.”

Property owners at Oracle Towers at Broadbeach, where the first case of coronavirus was discovered on the Gold Coast in January, have complained about paying $3100 for perks they cannot use.

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The Oracle building in Broadbeach. Picture: Luke Mortimer.

Mr Nickless said many bodies corporate entered into long-term maintenance and service agreements prior to the COVID-19 crisis requiring a fixed payment to a caretaker to look after all common property.

“That includes areas that are not restricted from use, like foyers, lifts, gardens and grounds. There can be serious adverse legal consequences for bodies corporate if they breach these agreements, so we recommend that utmost caution is taken to negotiate with contractors and try to find a workable solution,” he said.

Lot owners who do not pay levies may lose discounts given to those who make timely payments would become liable to pay penalty interest.

A body corporate can be liable for penalty interest of up to 2.5 per cent per calendar month (30 per cent per annum) and “reasonable recovery costs” if this has been put in place and the committee does not make a decision to waive it.

The SCA is urging lot owners to become more involved in their property’s financial affairs, because body corporate managers cannot change levies and only committees have powers to reinstate lost discounts, waive penalty interest and agree to payment plans.

James Nickless from the Strata Community Association.

Most buildings work off a 10-year sinking fund forecast in which money is built up over time.

“While a committee is responsible for day-to-day management of the body corporate, the legislation does not allow a volunteer committee to change the amount of money that has to be raised on lot owners,” Mr Nickless said.

“A decision to change how much the money is raised lot owners can only be by lot owners in a general meeting. The power to reduce levies rests with the owners in each community.”

The options available to a body corporate committee to decide upon on without calling a general meeting include reinstating lost discounts, waiving penalty interest and

agreeing to payment plans with individual lot owners.