New Strata Legislation Brings More Transparency for Property Owners and Committee Members in NSW

The NSW Government recently introduced the Strata Managing Agents Legislation Amendment Act 2024.

This legislation, implemented in stages starting 8 November 2024, aims to increase transparency and accountability, giving strata property owners and committee members a clearer view of their strata managers’ practices and potential conflicts of interest.

Key Dates and What to Expect

The legislation’s rollout includes two critical phases:

• 8 November 2024: Enhanced enforcement powers for NSW Fair Trading take effect, with increased penalties for non-compliance with existing obligations.
• 3 February 2025: Expanded disclosure obligations commence, requiring that strata managers reveal connections with suppliers and developers, and banning commissions on insurance if quotes and payments are arranged independently by the owners corporation.

Stronger Transparency and Disclosure Requirements

The new legislation mandates that strata managers disclose detailed information about their affiliations with suppliers, developers, and any commissions or training services they receive. This expanded disclosure enables owners to make more informed decisions about their strata management, scrutinising potential conflicts of interest and ensuring alignment with the owners corporation’s best interests.

These regulations extend to insurance, where strata managers will need to provide itemised quotes, clearly outlining premiums, GST, commissions, and broker fees. Further, if the owners corporation secures its insurance quotes and payments without assistance, strata managers will no longer be allowed to collect any insurance commission. These requirements place decision-making authority firmly in the hands of the owners corporation, strengthening owners’ oversight and enabling greater transparency around insurance arrangements.

At Premium Strata, we fully support these changes. CEO Leanne Habib commented, “I fully support the government’s desire to address potential conflicts of interest further by fully disclosing connections between strata managers and other parties. At Premium Strata, we have always prioritised transparency by openly sharing our company structures and related entities. The current debate on insurance commissions is also something we’re closely monitoring. We believe that not only should decision-making authority rest with the owners corporation, and managing agents should not have full delegated functions for insurance renewal, but also that the owners corporation should decide whether to opt for a lower management fee with insurance commission or a higher management fee with no commission. Insurance commissions have historically played a crucial role in subsidising higher management fees.”

Stronger Transparency and Disclosure Requirements

This reform marks a critical shift toward a more accountable strata sector, addressing long-standing concerns over conflicts of interest. By making insurance processes more transparent and implementing stricter disclosure obligations, the NSW Government is empowering property owners and committee members with the tools to oversee their strata managers’ activities more effectively.

For further information on these changes and updates to strata laws, visit the NSW Government website: NSW Strata Laws

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