Between cyclones, torrential rain, floods and more floods, a large majority of Queenslander’s have suffered from some form of physical damage or decline in industry. In the wake of Ex tropical cyclone Oswald and the flooding right across the state, thousands of Queenslanders have been left with huge repair bills or, worse, lost homes and loved ones. So what do we do now? Let’s take a look at how bodies corporate can be prepared and, if the worst does happen, how they can recover.
As the water begins to recede, and the winds and storm surge have died down, the damage across the State became evident and the question on everyone’s lips is, ‘where do we start?’ Health and safety, structural integrity and restoration of utilities have been the three issues of most urgency and therefore highest on the priority list following this disaster.
Following these items of immediate concern, comes the enormous mass of cleanup and restoration duties. This may include any of the following, depending on the structure and type of your Scheme: lifts, pool, landscaping, professional building clean, rebuilding plasterboard and other walls, re-carpeting or tiling, painting, replacement of lights, replacement of pumps, replacement of fire doors, testing of fire equipment, repair of emergency lighting, garage doors, electrical meters, electrical switchboards, mailboxes and removal of debris and mud.
Some of the most expensive repair bills we have seen as a result of the water inundation experienced are in relation to the plant and equipment within Schemes: particularly lifts, electrical switchboards, electrical meters and air conditioning plant, most of which is often installed and kept in the basement or ground level carparks.
Where there is sufficient warning, some precautionary measures may be able to be taken. Many lift companies advised their clients to move the lift carriages to the top of the building to avoid direct damage to the carriage and some Schemes even had time to move some electrical items to higher ground. Unfortunately, as much of the electrical equipment within a building forms part of the infrastructure, it is near impossible to move it with short notice. Some Schemes have considered relocating a lot of this plant to rooftop or other higher areas, though, due to the urgency to have utilities reinstated as soon as possible, the relocation of items such as electricity meters, switchboards and air conditioning plant will more likely be a future project to be considered by bodies corporate. It may also be an issue which developers should take into consideration when planning future developments.
As the full cost of all of this restoration is likely to be very high, it is also likely that the costs of such will be above the Committee expenditure limit. If this is the case, there are two options for a Body Corporate to gain necessary approval: obtain majority owner approval at a General Meeting or obtain an order from the Office of the Commissioner for Body Corporate and Community Management (OCBCCM). Regulatory timeframes must be observed when calling a General Meeting, meaning that in the case that urgent works are required, it is often too time consuming to call and hold a General Meeting. Instead, an urgent order can be sought from the OCBCCM with as little as 48 hour turnaround, however be prepared for this to stretch out to a week depending on any additional information required or questions the OCBCCM may have. It may also be the case that you need to make more than one urgent order request depending on when you receive quotes for certain works.
Because of the large costs involved with the recovery and restoration process, most bodies corporate will be required to raise a special levy to fund these costs. As the OCBCCM cannot make an order to raise a special levy, this must be approved at a General Meeting. Depending on the cash immediately available to your body corporate, you may need to consider applying urgently to the OCBCCM to be granted a shorter notice period in which to call and hold a General Meeting (as little as 7 days) for the purpose of raising a special levy and/or applying for a loan. Some bodies corporate have elected to raise an initial special levy to deal with the ‘big ticket’ items which required immediate work and for which the costs are known (and now due!) and then follow this with a second special levy in some months’ time for the difference of what has already been raised and the full cost of recovery.
An important thing to keep in mind with loans to a body corporate is that, as it must be an unsecured loan, the interest rate can be very high: I personally found it to be between 11-12% during the January 2011 floods. Some owners consider that individual owners are better to obtain a personal loan for their share of the costs, as ultimately, due to the personal or secured interest rate being lower than that a body corporate can obtain, the interest factor per owner will be less.
No matter whether you have been highly affected or not, the most important aspect in managing your body corporate through a disaster is communication. Keeping in touch with your Building Managers, Committee Members, all owners and tradespeople is vital to ensure everyone is operating on the same page, which will in turn lessen the possibility for individuals’ angst to be taken out on you or the body corporate.
It is important that you know what’s happening on the ground, so be sure to check in with your Building Managers or onsite Committee Members as often as possible. It is even more important that owners are kept up to date: after all, it is their property which has been affected and, in the end, their money which will need to pay for the repairs. Regardless of whether you have all the answers, a newsletter to all owners is a great way to communicate what is currently happening, what will be happening, how they can help and any other important details of which they may need to be aware. Continued updates are important to ensure all owners know the current state of repairs, any particular issues the Committee may be facing, the thought process behind raising a special levy or applying for a loan and also just how hard the Building Managers, the Committee and you are working to ensure a state of normalcy is returned as quickly as possible. On the plus side, this is a great way to obtain owners’ email and phone contact details, as many of them will contact you using one of these means.
Regardless of whether you and your body corporate has been directly affected during the recent floods, it is important to consider issues which may be pertinent in the future. Where is our electrical and other plant kept? Should we consider relocating this? Do we have a natural disaster plan in place? Should we meet with our insurance broker to better understand our policy? And, is our insurance coverage sufficient? Do we need a new valuation?
So let’s all continue to do what we can to help those Queenslanders who have suffered the most and, just as importantly, let’s ensure that we work as hard in preparing our unaffected clients as best possible for any possible future disaster. After all ‘standing by your mate’ (body corporate interpretation: neighbour!) is what the Queensland spirit is all about.