While a statement like ‘you could lose your home’ may feel alarmist, the reality is many owners will be faced with this very outcome.
The profoundly negative impacts of Covid-19 on the economy will continue far after restrictions cease. As income loss puts pressure on millions of Australians, you have to ask, what happens to strata expenses if owners cannot pay their levies?
The scary truth of it is every owner is exposed. If 20% of owners are financially unable to pay their levies, where does the missing income come from? The remaining 80% of owners pay more. Until 10% of the 80% are unable to carry the additional burden, kicking it to the remaining 70%…and so it continues. In the meantime, the owners unable to pay are accumulating debt at a rate they may never be able to pay off. This domino effect could place owners in the position of needing to sell as the cost of keeping the property becomes untenable.
At the very worst, owners will be sued for none payment of levies. Forcing apartment sales, potentially at a loss.
It is time now, more than ever, for owners to recognise that the Owners Corporation is not ‘other’. It is not an entity operating independently of ownership. It is a business. Every owner is a shareholder, and every owner carries the requirement to fund the operations of the Owners Corporation. Every owner carries financial risk, based on their fellow strata owners ability to pay levies.
This reliance on each owner to fund their share of the strata exposes everyone when one cannot pay. That risk increases with the number of owners forced to default.
To read more on this issue, please click here to download our white paper: https://morethanstrata.com.au/lp/losing-your-strata-home/