Strata law during COVID-19: issues for lawyers
This article is the third in our property law series, reporting on the latest issues for property law practitioners.
Here, we interview Allison Benson, Principal of Kerin Benson Lawyers, a boutique law firm providing legal services to owners corporations, community associations, strata managers and individual lot owners.
Allison answers our questions about the biggest legal issues and changes in the area of strata law as a result of the COVID-19 pandemic.
Q. What were the biggest issues and changes that initially came up for strata managers, owners corporations and renters as a result of COVID-19?
The initial challenge was to manage communication and information. There was a lot of panic but not much strata-specific information for lot owners, strata managers and owners corporations.
The information and Public Health Orders were also being updated regularly so it was difficult to stay on top of it. Often, even where information existed, it was conflicting.
For instance, there was a debate between some strata lawyers as to whether the NSW Public Health Orders applied to strata schemes and whether common property facilities such as gyms and indoor pools should be closed. The debate centred over whether the common property of the scheme was private property and therefore exempt from the order.
My thoughts were that the Public Health Orders were/are beneficial legislation and that they should be interpreted as broadly as possible. Further, it was my view that each owners corporation needed to be careful not to expose itself to a negligence claim. It was difficult early on to obtain hand sanitiser and other cleaning supplies (let alone scheduling cleaners) so the prudent approach was for these facilities to be closed, particularly as we did not know how easily the virus could be transmitted.
Q. What other issues and changes eventually came up for strata managers, owners corporations and renters as a result of COVID-19?
The later challenges relate to:
1. Strata levies
There’s a need for more cleaning which must be paid for (remembering the potential for lot owners to be out of work or on Job keeper), so many schemes sought advice about amending their scheduled levies.
2. Noise and other complaints
Once people began to move through the initial phase and become accustomed to the new normal, the stress and tension remained and we saw more noise complaints and complaints about neighbours generally. In one scheme, I am aware of the police being called following an incident in the common property foyer.
I believe that the niggling little issues became more important when people were home 24/7 and in some cases the tension built and built until it exploded.
Other schemes have really come together, with people helping each other out with shopping, scheduling, cleaning and more. It has been a test of the strata community that people live in and good leadership from strata managers and strata committees definitely played a part in helping create goodwill and a spirit of comradery within schemes.
3. Managing meetings to keep making decisions
Because of the way strata schemes are required to make decisions, decision-making became ad hoc or ground to a halt.
There has been a tremendous take up of technology, which, with a little patience from everyone, has become extremely successful. It has certainly allowed strata managers the freedom to work from home – something I think we will continue to see for the late night meetings as it is more convenient and safer. – and to effectively run the scheme.
The Strata Schemes Management Amendment (COVID-19) Regulation 2020 (NSW) was made and it has certainly helped. It allows schemes who had not previously passed a motion to allow for electronic meetings to hold meetings electronically and it also allows owners corporations to witness documents more easily.
Q. What are the things that lawyers need to be aware of at the moment when advising clients about strata issues?
First, that electronic meetings are valid meetings. Owners corporations can hold meetings electronically – this can legitimately be done even if a motion to allow electronic voting has not been passed. See the Strata Schemes Management Amendment (COVID-19) Regulation 2020 (NSW) for more information.
There are several financial matters lawyers also should be aware of. Most owners corporations have passed motions allowing the strata committee to enter into payment plans for outstanding levy contributions, which is handy for those in need. Also, an owners corporation can pass a motion at a general meeting so that unpaid levy contributions do not attract the 10% interest under the Strata Schemes Management Act 2015 (NSW). Also keep in mind that if a lot owner is unfinancial they lose the right to vote at meetings – meaning that important decisions can be made that they are ineligible to vote on.
If there is a dispute concerning strata law, Fair Trading is still holding mediations. These are being held remotely and the NSW Civil & Administrative Tribunal (NCAT) has been holding hearings by telephone. NCAT also has extended the ability to file documents electronically. Where a document cannot be filed electronically, they are encouraging the documents to be posted or, if filing in person, there is a lodgement box at each registry. At this stage, NCAT is likely to continue with telephone hearings until early October 2020.
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