New Strata Law Reforms: Strengthening Owners’ Rights and Governance in NSW

The NSW Government has introduced additional provisions, expanding beyond strata management disclosure rules to enhance owners’ rights, improve governance, and introduce new sustainability measures.

In November 2024, we covered the first phase of the Strata Managing Agents Legislation Amendment Act 2024, which focused on increasing transparency and accountability in strata management. You can read that article here for a refresher on the initial changes.

These reforms, introduced to NSW Parliament on 20 November 2024, bring significant changes that strata owners and committee members should be aware of.

Key Updates in the Second Phase of New Strata Law Reforms

These additional reforms build on the 2021 statutory review and follow the first phase of changes introduced in 2023. The new provisions focus on:

• Stronger accountability for developers in preparing maintenance schedules and levy estimates for new strata schemes.
• Greater oversight of strata management agreements and a new statutory duty on building managers.
• Protection for owners corporations from unfair contract terms in standard form contracts.
• New governance duties for strata committee members to improve decision-making and accountability.
• Enhanced obligations for owners corporations to maintain and repair common property.
• New Fair Trading powers to enforce compliance with maintenance obligations.
• Mandatory sustainability considerations at Annual General Meetings (AGMs).
• Better protections for owners in embedded networks (private electricity distribution systems in strata buildings).
• Support for owners experiencing financial hardship.
• Improved accessibility rights for owners needing modifications to their property.

Developers Face Stricter Obligations for New Strata Schemes

Strata committee members will have new statutory duties to improve governance and transparency. These measures will help ensure committee members act in the best interests of owners corporations, particularly when making financial and contractual decisions.

Stronger Protection Against Unfair Contracts

Owners corporations will no longer be locked into unfair contracts with service providers. Standard form contracts will now include legal protections against unfair terms, giving owners greater negotiating power and control over financial commitments.

Enhanced Common Property Maintenance Obligations

Owners corporations will face stricter responsibilities to maintain and repair common property. NSW Fair Trading will be granted new powers to issue compliance orders, ensuring maintenance obligations are met and disputes over repairs are resolved more effectively.

Sustainability and Accessibility Improvements

Owners corporations must now consider sustainability initiatives at each AGM, particularly when estimating levies for the year ahead. This move is designed to encourage investment in renewable energy, EV charging stations, and energy-efficient infrastructure in strata buildings.

Additionally, the new provisions make it easier for owners with disabilities or mobility challenges to install supporting infrastructure in their strata property, improving accessibility and inclusivity.

Financial Hardship Assistance for Owners

For the first time, the legislation includes provisions aimed at supporting owners experiencing financial hardship. While details on the specific assistance mechanisms are yet to be finalised, this measure acknowledges the rising costs of strata living and seeks to protect vulnerable owners.

What These Changes Mean for Owners and Strata Committees

These additional reforms further strengthen owners’ rights and increase the accountability of strata committees, managers, and developers. With stricter governance rules, stronger financial protections, and a push for sustainability, strata schemes will become more transparent, fair, and future-proofed.

For further information on these updates, visit the NSW Government website: https://www.nsw.gov.au/housing-and-construction/strata/serving-on-a-committee/strata-laws

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