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/ibRf50Wgv1U
- 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.