A number of lot owners have been asking “are my levies going to be reduced/discounted if the committee closes the gym”?
This question stems from the Government’s decision to close the use of recreation facilities in the public.
So what about a body corporate?
This article focuses on the operation of common property facilities during this Pandemic – that is, pools, gyms, BBQ facilities and surrounding areas.
Government Regulations and Restrictions
Common property facilities are technically considered part of the private property of a body corporate.
The Government imposed regulations and restrictions for public use pools, gyms and other facilities, have recently been amended to apply to bodies corporate and its facilities.
These restrictions are in addition to the Government rules relating to social distancing and prevention of spreading COVID-19. These rules apply to everyone and every household, apartment and in turn, your body corporate.
So what facilities must the body corporate close and are there any facilities or common property that a body corporate may keep open, subject to social distancing?
Regulation of Common Property Facilities in COVID-19 Pandemic
The starting point is that bodies corporate (and its owners and occupiers) should ensure they are each doing their bit to comply with the Government imposed regulations and restrictions to prevent the spread of the virus.
The decision to keep open or close areas of common property requires consideration of many factors.
Queensland Health has published (on 31 March 2020) an extensive list of non-essential business, activity and undertakings that must be closed.
A link to that direction is here.
A number of activities, which are considered facilities within bodies corporate, are now included in this list. We outline the main common property facilities that must be closed below:
- Swimming pools;
- Recreation rooms;
- Gyms (indoor and outdoor); and
Regarding any other social sporting-based activities, these may still operate but that is limited to two (2) people with social distancing observed.
An example of this would be a common property tennis court.
If there are other facilities that are not required to be closed and a body corporate wishes to keep those facilities open, it may need to consider new regulation of the use of those facilities to comply with the COVID-19 restrictions. This is done by updating the scheme’s by-laws.
To amend the by-laws requires the body corporate to hold a general meeting (i.e. AGM or EGM).
If the facilities stay open, it is likely that the body corporate may need to consider additional and professional cleaning/sanitising of the facilities. This will be an additional expense.
If schemes are required to close majority of their facilities – will there be a reduction in levies?
The short of it is that levies must still be paid by owners.
If a body corporate can reduce its maintenance costs of facilities, then it is likely the future levies may reduce due to a surplus evolving from what was budgeted.
Bodies corporate can consider managing any surplus by reducing levies for the next financial year or applying credits to owners’ accounts (especially against owners’ accounts that may have lost employment and are behind in payment of their current levies).
Otherwise, a body corporate can adjust the current levies (resolved at its last Annual General Meeting (AGM)) however, this will require the calling and holding of an Extraordinary General Meeting (EGM) to modify levy amounts. Careful consideration is required when considering this option.
Each body corporate will need to consider what is in the best interests of the scheme.
Bodies corporate should familiarise itself with the recent direction published by Queensland Health to ensure that they comply with the compulsory closure of facilities.
Fines will issue if there is a breach of these health directions.
Gold Coast lawyers at OMB Solicitors, we can assist those bodies corporate that wish to continue to provide facilities that are not required to be closed by preparing revised by-laws to regulate the use of the facilities in accordance with the Government regulations and restrictions.
Regarding the compulsory closure of non-essential activities/facilities, OMB Solicitors can assist in preparing correspondence to all owners and occupiers outlining that requirement.