Why It Is Important to Pay Strata Levies Fees
The collection of levies and the proper maintenance of sinking and administration funds is an essential part of strata scheme living and vital for the continuation of schemes across the state, particularly amidst the COVID-19 pandemic.
The ability to properly maintain a property is being tested now more than ever and we explore why it’s important levies are still paid.
Buildings Operating at Capacity:
The effects the current COVID-19 pandemic will have on the Strata Sector and specifically the residents that live within multi-residential properties are still partly unknow.
There are thousands of apartment complexes in NSW where continued operation and resident support and protection is needed because of the heavy use of common areas and resident interaction in high density living.
Since lockdown measures were implemented, there has been enormous strain on all building infrastructure, waste and recycling management, cleaning demand, water/electricity/gas usage and facilities.
Due to the unforeseen nature of COVID-19, many Owners Corporation’s would not have budgeted adequately for these additional expenses.
However, any reduction in continued operation will have a snowballing effect for all residents and owners alike.
Levies:
The strata industry is responding like it never has. We are under revenue pressure like all businesses in today’s economy, with services and resident demand under intense strain for innovation, solutions, and support.
The increase in building expenditure unfortunately comes at a time when levy arrears for many buildings will increase due to the devastating financial impact the COVID-19 pandemic is having on the economy, businesses, individuals and the rental market.
The strata levies assisting with the ongoing running costs such as:
- Strata Insurances
- Bank fees
- Common Area Utilities (Water, Gas and Electricity)
- Cleaning & Gardening Maintenance
- Waste management
- Capital works fund
- General Maintenance
Unlike many other sectors, there is currently no Government stimulus available for owners within Strata Schemes to assist with levy payments or over-stretched budgets.
So What Assistance is There?
The Federal and State Government’s have announced numerous stimulus packages that are available to both individuals and businesses that have been impacted by COVID-19 and are facing financial hardship, these include:
- Job Keeper Payments
- Job Seeker Payments
- Credit Flow for Small and Medium Business
- Payroll Tax Changes
- Deferral of Parking Space Levy for 6 months
- Deferral of rents for 6 months for commercial tenants with less than 20
- employees in all Government-owned properties.
- Licence, registration and permit fees will be automatically waived for 12-months on new applications and renewals lodged by eligible businesses and individuals
- Emergency Cleaning Packages
- Small Business Support Grant
- Instant Asset Write Off Increase
And more pertinent support.
For more details regarding these stimulus packages see the following links
Aside from this, many banking and financial institutions are providing mortgage relief to customers by deferring mortgage payments.
Moving past COVID-19:
With no government stimulus available for Owners Corporations, the ongoing financial administration of your strata property is 100% reliant on strata levy contributions made by owners.
The need for a steady and predictable cashflow for your Owners Corporation to meet ongoing and increased expenses has never been greater.