Strata corporations have options for financial lifeline

Strata corporations have a financial lifeline if owners are unable to pay levies because they have lost their jobs or their tenants have stopped paying rent due to the COVID-19 crisis, according to strata lender Lannock Strata Finance.

Lannock CEO Paul Morton said the owners’ corporation in this situation can take advantage of a product called Levy Assist, which provides a loan to help manage levy payments.

“Levies are the lifeblood of the body corporate system as they cover the cost of maintaining the building, insurance and other running costs,” Mr Morton said.

“Given the economic downturn due to COVID-19, many owners are afraid that they will be unable to pay their levies. This will mean people who maintain strata complexes such as gardeners, builders and cleaners won’t be paid.

“Levy Assist will provide a year’s funding for all owner corporations, and more if required. It enables an owners’ corporation to meet its financial obligations way past the anticipated end of the virus crisis.”

Mr Morton said the decision about levies and loans should be made at a body corporate general meeting.

“Every owner corporation is different and owners have different needs and objectives – the general meeting is the place to decide which is best for each particular group,” he said.

“Levy Assist is a safety net for strata. And if the corporation never uses it, they won’t have to pay a cent. Our Levy Assist loan is incredibly flexible and puts the owners in control. We don’t tell the corporation what amount we’ll lend, we let the owners work out what is best in their situation. There is a standard term and interest only period, but we’ll also adjust that if you want something different."

“We don’t restrict you to a three or six month period, we let you decide for what period you’ll need this assistance. We don’t ask for personal financial information, there’s no security, set up cost, bank liens, fees, charges, caveats or personal guarantees."

“We let you pay it back over time or in one hit whenever you like without penalty. Levy Assist gives control to owners. The corporation can decide each month whether to fund its needs by drawing on the loan or by using funds from other sources.”