The COVID-19 Pandemic – Financial Issues for Strata Corporations
Like everyone else, once we have the social distancing on lock, there are a number of financial issues that come up. The three most frequent questions that have come up in the last few days are as follows:
1. How does the strata corporation pay for unexpected or large expenses like insurance premiums?
2. Can we cancel work that we planned to do and refund the special levy?
3. Will there be relief for owners from the payment of strata fees?
Unlike a bank or other commercial enterprise, a strata corporation is a not for profit. As such, it does not have credit facilities available (i.e. line of credit) to support the strata corporation when cash-flow is tight. The strata corporation’s sole source of funding is from its owners, by way of strata fees or special levies. To run the complex, the strata corporation has its operating fund, contingency reserve fund (“CRF”) and special levy funds (if any) to pay for all of its expenses. All these funds, however, can only be accessed in accordance with the provisions of the Strata Property Act (“SPA”)....
...view full article here