The landscape of strata legislation in New South Wales (NSW), Australia, is undergoing significant reforms aimed at enhancing transparency, accountability, and the overall living experience within strata communities.
In November 2024 legislation granted NSW Fair Trading increased enforcement and regulatory powers in relation to some existing disclosure requirements of strata managing agents. These measures are designed to ensure that strata managing agents adhere strictly to their duties, thereby protecting the interests of owners’ corporations.
From 3 February 2025, further legislative changes mandated increased transparency from strata managing agents. This includes revealing any affiliations with suppliers and developers, detailed breakdowns of insurance quotes—highlighting commissions and broker fees—and real-time reporting of new connections or interests. These measures aim to eliminate conflicts of interest and ensure that decisions made are in the best interests of the strata community.
At Strata Sense, we have always taken pride in our transparent, independent and client-focused approach. Whilst some companies are navigating new ways of operation in the context of these changes, here at Strata Sense it’s just about “business as usual”.
If we earn a commission, we rebate this back to our owners corporations. We don’t have any connections with brokers or insurers, or any other suppliers like building management, fire contractors, cleaning etc. We don’t have interests outside of our own company. We just do strata management and we plan to keep it that way.
But the reforms do not step here. Another tranche set to come into effect in mid-2025. Whilst the above changes focus a lot on the conduct of strata managing agents, there are a number of changes ahead that will impact how owners corporations themselves conduct their business that you should be aware of.
Impact on Strata Committees and Decision-Making
The reforms also emphasise the importance of inclusivity and transparency in decision-making processes. Strata committees are now required to operate with greater openness, ensuring that all owners are adequately informed about decisions that affect the community due to changes in how meetings are chaired and extended fiduciary and conduct duties. This move aims to foster a more collaborative environment and mitigate potential conflicts within strata schemes. Strata committee members will require training in order to hold their role and there are requirements as to how they conduct themselves added into the core duties of a committee member. The requirement for training of strata committee members is to be included in the Strata Schemes Management Regulations, and details of how this will occur and the requirements around this are not yet known.
Improved Protections for Owners Regarding Embedded Networks
Embedded networks, which are private energy setups for services like electricity, water, and gas, have been a focal point of the reforms. The new legislation removes exemptions for embedded electricity supply contracts, enforcing a three-year term limit to prevent long-term lock-ins. Additionally, the definition of ‘utility’ has been broadened to encompass a wider range of communication and domestic services. Importantly, there are now mandatory disclosure requirements about embedded networks at the point of sale, ensuring prospective owners are fully informed before making a purchase.
Reforms in Financial Management and Capital Works Planning
Financial transparency and proactive maintenance are key themes in the reforms. For new strata developments, the initial 10-year capital works fund plan must now consider the initial maintenance schedule provided by the developer. This ensures that long-term maintenance and financial planning are aligned from the outset, promoting the sustainability and integrity of strata properties.
Extended Timeframes for Damages Claims
Recognising the complexities that can arise in strata living, the reforms extend the timeframe for damages claims by strata property owners from two years to six years. This change provides owners with a more reasonable period to identify and address issues, thereby offering greater protection and recourse in the event of disputes or defects. These damage claims relate to situations where an owner has suffered a loss (to lot or personal property, or through loss of rent or similar) due to a failure of the owners corporation in maintaining the common property.
Conclusion
These are only some of the changes and there are many more to stay up to date on; we will endeavour to keep you across these in the coming months. The emerging changes to strata legislation in NSW represent a comprehensive effort to modernise and improve the governance of strata schemes. By enhancing transparency, strengthening accountability, and safeguarding the interests of owners and residents, these reforms are set to elevate the standard of strata living across the state. As these changes come into effect, it is crucial for all stakeholders—strata managers, owners’ corporations, and residents—to familiarise themselves with the new requirements to ensure compliance and to fully benefit from the improved regulatory framework.
For more tips and support on staying informed on legislative changes, please get in touch with our team. We’re here to help make the process of managing a community as simple as possible.