Impor­tant Stra­ta Law Changes — Effec­tive 1 July 2025

The Stra­ta Schemes Leg­is­la­tion Amend­ment Act 2025 (Amend­ing Act) intro­duces fur­ther reform in Gov­ern­men­t’s ongo­ing review of the stra­ta legislation. 

On 1 July 2025, the sec­ond tranche of changes under the Amend­ing Act com­menced, which will impact or give effect to the following: 

• enhanced pro­tec­tion of own­ers cor­po­ra­tions from stra­ta man­agers, build­ing man­agers and oth­ers who pro­vide goods and ser­vices to own­ers cor­po­ra­tions with the exten­sion of Unfair Con­tract Terms (UCT) under the Aus­tralian Con­sumer Law: refer UCT arti­cle https://​ow​.ly/​i​b​R​f​5​0​Wgv1U
• a require­ment for stra­ta man­agers to under­take 6 month­ly (instead of 12 month­ly) report­ing to own­ers cor­po­ra­tions on func­tions they exer­cise for those own­ers corporations
• devel­op­er account­abil­i­ty, by increas­ing penal­ties on devel­op­ers who fail to hold the first annu­al gen­er­al meet­ing or fail to pro­vide cer­tain doc­u­ments or records at that meeting
• strength­en­ing cap­i­tal works plans, by requir­ing own­ers cor­po­ra­tions to con­sid­er ini­tial main­te­nance sched­ules when prepar­ing them
• own­ers to have 6 years to bring a claim for dam­ages against an own­ers cor­po­ra­tion aris­ing from a fail­ure to main­tain and repair com­mon prop­er­ty rather than 2 years from when they first became aware of a loss
• com­mon prop­er­ty rights by-law require­ments, includ­ing the require­ment to spec­i­fy who will be respon­si­ble for ongo­ing main­te­nance to be set out in spe­cial res­o­lu­tions passed with such by-laws as well as restric­tion on the amend­ing pow­ers of own­ers who could ben­e­fit from a by-law
• addi­tion­al sus­tain­abil­i­ty infra­struc­ture pro­vi­sions are now in place over­rid­ing by-laws that ban sus­tain­abil­i­ty infra­struc­ture just to pre­serve the exter­nal appear­ance of a lot or com­mon prop­er­ty (unless affect­ed by a her­itage list­ing or sit­u­at­ed with­in a her­itage con­ser­va­tion area). Gen­er­al meet­ings and bud­gets will also need to include some focus on sus­tain­abil­i­ty infrastructure
• updates for approvals of minor ren­o­va­tions, with new rules apply­ing to stra­ta com­mit­tees that have pow­er to approve minor ren­o­va­tions, and stronger record keep­ing reten­tion require­ments for approved minor ren­o­va­tions for 10 years
• acces­si­bil­i­ty infra­struc­ture will become eas­i­er, by the adop­tion of mea­sures to facil­i­tate their imple­men­ta­tion sim­i­lar to the sus­tain­abil­i­ty infra­struc­ture mea­sures recent­ly introduced
• expand­ed duties of stra­ta com­mit­tee mem­bers, and clear­er pro­vi­sions as to the role of the chair­per­son in all meetings
• lim­it­ing terms of embed­ded net­works agree­ments, with these agree­ments expir­ing before the first annu­al gen­er­al meet­ing for a scheme if entered into before then, or lim­it­ed to a 3 year term
• require­ments for res­o­lu­tions to approve legal ser­vices to spec­i­fy whether legal costs to be incurred are for either an unlim­it­ed costs or capped to a max­i­mum amount
• lim­it­ing the kind of evi­dence required about assis­tance ani­mals to one type that is per­mit­ted under the legislation 

Read more on the changes at the Guide to 2025 stra­ta law changes | NSW Gov­ern­ment.

Back­ground

This is the sec­ond of three tranch­es of reform to stra­ta law in 2025.

As high­light­ed by Fair Trad­ing NSW, the State gov­ern­ment expects that 50% of all res­i­dents in NSW will be liv­ing in stra­ta schemes by 2050. These recent changes to stra­ta leg­is­la­tion also reflect the gov­ern­men­t’s desire to reach its hous­ing tar­gets by mak­ing stra­ta liv­ing more effec­tive for cur­rent and future residents.

In the Sec­ond Read­ing speech for the Amend­ing Act released on 20 of Novem­ber 2024, the Gov­ern­men­t’s aim is stat­ed to ​“improve account­abil­i­ty and con­fi­dence in stra­ta man­ag­ing agents and build­ing man­agers” as well as to ​“enhance pro­tec­tions for own­ers from mis­con­duct by stra­ta man­agers” in a bid to meet the state’s hous­ing needs.

Fur­ther Changes to Come

In the last tranche of this reform, we will see: 

• increased devel­op­er account­abil­i­ty, regard­ing ini­tial main­te­nance sched­ules and levy estimates
• increased build­ing man­ag­er account­abil­i­ty, by enhanced statu­to­ry duties
• pro­vi­sion for vari­a­tion or ter­mi­na­tion of stra­ta man­age­ment and build­ing man­age­ment agree­ments by the Tri­bunal if car­ry­ing on busi­ness con­trary to law
• manda­to­ry train­ing for stra­ta com­mit­tee mem­bers, how­ev­er this change is still unclear as to specifics so watch this space
• levy col­lec­tion and recov­ery of over­due levies – this will be a sig­nif­i­cant change which recog­nis­es costs of liv­ing pres­sures on own­ers and the need for cer­tain­ty for own­ers cor­po­ra­tion who can­not main­tain build­ings with­out the pay­ment of levies
• expan­sion of inves­tiga­tive and enforce­ment pow­ers of NSW Fair Trad­ing, around infor­ma­tion gath­er­ing pow­ers, pow­ers of entry, issu­ing com­pli­ance notices and enforce­able undertakings
• new dis­clo­sure require­ments in con­tracts for sale of stra­ta lots to require dis­clo­sure of whether there are any embed­ded net­works in a stra­ta scheme, with pro­vi­sion for pre­scribed war­ranties cov­er­ing same under sale of land con­veyanc­ing regulations

Swaab has an expe­ri­enced team of lawyers spe­cialised in stra­ta law to assist with any queries aris­ing out of the most recent leg­isla­tive changes.