What the experts have to say about strata management post-COVID-19

How did the COVID-19 pandemic affect the strata management industry and what are the experts’ recommendations to ensure the sustainability of strata management? SCA board members Peter Brisbane and Joshua Baldwin sat down with leading strata Lawyer, Colin grace, and MRI strata specialist, Sam Cochrane, at the first-ever virtual MRI Ascend conference to discuss this question and take a comprehensive look at the impact of the COVID-19 crisis has had on body corporates and strata management agencies. Here are the highlights from the discussion.

Unique challenges brought by the pandemic highlighted the importance of strata managers 

The pandemic has certainly brought new challenges for body corporates. From the more serious topic of financials down to trivial disputes like car parking – the conversations that strata managers are having with committees are not always pleasant nor easy, but the shared experience left a lasting impression that bode well for the strata management moving forward.

“The trust that these committees had in us as managing agents to adapt and to give ideas to them during the pandemic grew the relationship between the body corporate and the strata manager. It reaffirms the fact that a good manager can also help in business development,” said Joshua Baldwin, Director at Munro Property Group and President at SCA SA.

For Peter Brisbane, Director and Licensee at Strata One and SCA NSW Board Member, this time is also an opportune moment for the strata management industry to step up and implement professional standards, “As more people are understanding their budgets now, understanding the complexity of community living and taking greater ownership in looking after their investment, the time is right for the industry as a whole to step up and really be that key to make a change.”

Technology helped facilitate more efficient and engaging meetings 

One of the biggest tasks for a strata manager is dealing with the many meetings required to keep strata communities functioning. But what were once face-to-face meetings have now become virtual meetings due to the pandemic and those who quickly adapted to the new approach has seen positive results.

“Our meeting attendance has increased by 32% over this period because of the convenience of being online,” said Joshua. He added that this increase in participation creates an easier workflow for managers as they will be able to take note of concerns in just one meeting instead of going through individual emails from a number of people. 

Colin Grace, Partner and Strata Community Specialist at Grace Lawyers gave a legal insight, noting that these meetings will also help in preventing future breaches, “We need to have the AGM. I think this whole new world is committee meetings online and in general meetings where we don’t need to meet online, use the electronic voting powers, the proxy voting, or the pre-meeting voting.” 

Learning to find the right balance in dealing with levy contributions 

As the crisis affects people and their livelihoods, there were owners who inevitably fall into financial hardship causing non-payment of contributions. This will eventually have an effect on how the strata schemes are managed and maintained and also have a lasting effect on both the owners and the body corporate. It is then the strata manager’s task to establish a middle ground that can minimise the risks for both.

“It’s finding that balancing act between letting someone defer their payments and how we actually manage the property,” said Peter. “That’s really what we need to as a body corporate and owners corporation managers – make sure that we find that balance between making sure there’s enough money to pay the bills, but yet be mindful of increases or additional costs on the owner.” 

Integral to this is having a deep understanding of the different owners and their situations. Colin summarized the common types of owners strata managers will encounter during this period and advised the steps to take for each:  

1. Those that don’t pay and never will – “They are probably in debt collection long before this started and don’t let them use the pandemic as another excuse. Strata managers should be persistent in collecting contributions from these types and if all else fails then you can inform the committee and advise to bankrupt them.” 
2. Those that were behind before the pandemic but not really bad – “They’re not the recalcitrant type that uses every excuse. These are the ones that found a bit of trouble. You can go the first stage and issue a letter, see if they need help. It is not untoward to ask. In fact, the tribunals encouraged asking questions to owners to get a full picture of the situation. 
3. The ones that have struggled because of the pandemic – “These are those who lost their job or are on JobSeeker who can really use the help.” He then mentioned setting up a levy crisis line or web page to make the application confidential and convenient for the owners and make the whole process for the strata managers. 

The full impact of COVID-19 pandemic is yet to come, and strata managers must be prepared to advise clients in carrying out decisions 

As government subsidies like JobKeeper are reduced and eventually removed, body corporates should expect the full-blown effect of the crisis financially. The panellists agreed that making informed decisions will help body corporates minimise risks and it is the strata manager’s responsibility to supply the right information they need. 

“What we’ve been doing is really involving those owner’s corporation committees and giving them all the data and expert advice – if it’s a sinking fund analysis, etc. But at the end of the day it’s still their decision to make,” said Joshua. 

Colin also added that body corporates should always keep their legal hats on against deciding what’s right “It’s all about good fiscal management and not running afoul of the legislation. We don’t want to get to the point when we’re out of money. Then you’re raising special levies. And as we know, those are combined have to pay to cover off on those who can’t pay.” 

Strata management at its core is about building open, well-oiled and well–communicated communities where everyone can flourish together. What this pandemic has shown is that transparent flow of information between body corporates and strata managers, as well as active involvement from owners, are key aspects to ensuring sustainable and healthy communities now and in the future. 

Watch the full panel  

Watch the full Strata Panel: The Impact of COVID-19 for Strata Management session on demand. You can also watch more MRI Ascend sessions and hear from industry leaders, MRI Executive and Product Managers covering client case studies, product deep dives, industry issues and more.