Industry Update
New laws for all strata schemes in NSW are expected to be rolled out from Mid-2025. The new laws will deliver recommendations from the 2021 statutory review of strata laws.
The NSW Government will release further news and information on these changes; The 1888 Co. will ensure all our clients are informed and what this means for you.
Why Are the Strata Laws Changing?
Strata laws are changing to better meet the needs of strata communities in NSW.
The changes deliver recommendations from the 2021 statutory review of strata laws.
Certain changes also deliver reforms which the strata sector, owners and residents raised following the review.
The recommendations are being delivered in phases to give owners and industry time to adapt to the changes. These phases include:
• delivery of immediate benefits to strata schemes in the first phase in 2023
• roll out of a second phase of more substantial reforms from mid-2025 (these reforms are the most significant ones since 2015)
• further reforms that will be introduced to the NSW Parliament in the future.
From mid-2025, the second phase of strata reforms will be rolled out
This will bring changes to better protect people in strata schemes.
There are some new and changing requirements for strata schemes, as well as benefits for owners, such as easier approvals for minor renovations.
The changes will impact you if you are a:
• strata managing agent
• developer
• building manager
• strata property owner
• strata committee member (this includes general committee members and the secretary, chairperson and treasurer).
The new strata laws will also apply to community land schemes.
To find out more about the reforms, visit the NSW Parliament website.
Assisting Owners in Financial Hardship
Changes include:
New information requirements for strata levy notices. This includes information to assist owners in financial hardship to get help early. The information that will need to be provided with the levy notice will include contact details for the National Debt Helpline. This is a free, confidential and independent financial counselling service.
Allowing strata committees to enter into payment plans with an owner in financial hardship. Currently, this requires owners corporation approval.
Supporting owners in financial hardship who request a payment plan. Schemes must consider all requests to enter into a payment plan with an owner for unpaid levies.
A strata scheme will need to let owners enter into a payment plan, unless they can reasonably refuse this.
Giving an owner more notice about when the strata scheme takes debt recovery action against them. Schemes will need to provide at least 30 days’ notice (up from 21 days).
A scheme needs a court or tribunal order before they can recover debt recovery costs from an owner. An example of a debt recovery cost is the scheme paying for the services of a debt collection agency. The scheme also needs to have offered the owner a payment plan before these costs can be recovered.
Overdue payments made by an owner first apply to their strata levies, followed by any interest and debt recovery costs. This is a fairer process for owners to help them to pay off their strata debt.
Making it Easier For Owners with Assistance Animals
Changes include:
Expanding the list of evidence an owner can give to confirm that an animal is an assistance animal.
Clarifying that an owner only needs to give one form of evidence of their choosing.
Improving Strata Committee Governance
Changes include:
The strata committee having to give written reason to refuse an owner’s request for a minor renovation – within 3 months of the written request. If the strata committee fails to do this, the minor renovation will be automatically approved.
Training requirements and new duties for strata committee members.
Requiring Owners Corporations to Maintain Common Property
Changes include:
Restricting an owners corporation’s ability to delay building works if it affects the safety or amenity of their strata scheme.
Increasing NSW Fair Trading’s powers to respond if owners have not met their legal duty to maintain their building. These include compliance notices, and agreements that are legally-binding for schemes (‘enforceable undertakings’).
Prescribing a standard form for the 10-year capital works fund plan.
For new strata developments – requiring the initial 10-year capital works fund plan to consider the initial maintenance schedule. The initial maintenance schedule is provided by the strata building’s developer.
Increasing the time limit on damages claims by strata property owners to six years (up from two years).
Uplift Strata Professional Service to Build Confidence
Changes include:
Strata managing agents having to report every 6 months to the owners corporation on the work that they do.
Compelling building managers to act in an owners corporation’s best interests.
Enabling the owners corporation to apply to the NSW Civil and Administrative Tribunal (the Tribunal) to end the contract of their strata managing agent or building manager, if they break the law.
Giving NSW Fair Trading the power to prescribe the form of contracts that a strata managing agent or building manager can enter into with a strata scheme. This would allow NSW Fair Trading to impose standards for these contracts (also called agreements) that better protect strata communities and make it easier to compare providers.
Banning terms in strata management contracts that require an owners corporation to pay for the agent’s professional indemnity liabilities, or limit an agent’s liability to a specific amount.
Protecting Owners Corporations Against Unfair Contract Terms
Unfair contract terms will be banned in line with Australian Consumer Law. This will apply to:
strata management contracts
contracts for goods and services that a strata scheme receives.
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