Big changes as new strata laws take effect

Has the sky fallen in yet?  I must have seen like that when the weather bomb hit NSW this week – but that has nothing on the big changes in NSW strata that occurred on Monday.

In case you hadn’t heard, July 1 saw the activation of new and amended strata laws in one of the most far-reaching and fundamental updates to the sector since the last statutory review.
 
Partly in the wake of the Netstrata scandal, the changes are designed to strengthen accountability across all levels of strata governance, from strata and building managers to committees and developers
 
“These reforms represent a meaningful step forward in improving transparency, consumer protections, and sustainability in the strata sector,” said Robert Anderson, President of Strata Community Association NSW, the strata managers’ professional body which has welcomed the changes.

“They also show the government has listened to many of the recommendations made by the sector and its communities.” 

Key Changes: 

• Strata Manager Reporting: Strata managers must now report to the Owners Corporation every six months, rather than annually. Reports must include details such as meetings held, work orders issued, levy notices, and section 184 certificates. 
• New Protections for Managers: A new defence is introduced for strata managers acting in good faith where breaches are caused by the Owners Corporation and reasonable steps were taken to prevent them. 
• Reform of Agency Agreements: Prohibited terms include indemnifying an agent’s professional liabilities or limiting their liability outside of a professional standards scheme. NCAT gains power to terminate unlawful agreements. 
• Committee Oversight and Conduct: Owners Corporations can now remove committee members via ordinary resolution, with disqualified members barred from reappointment for 12 months. Chairs must also promote fair and constructive discussion during meetings. 

• Accessibility: Voting thresholds for accessibility upgrades affecting common property are lowered to a simple majority from a 75 per cent super majority.
• Sustainability: Sustainability is now a mandatory AGM item, and schemes must consider water and energy use when budgeting. 
• Embedded Networks and Utilities: Contracts for embedded networks entered after 1 July are capped at three years. Disclosure requirements have expanded to include these networks on section 184 certificates. 

• Assistance Animals: Easier recognition of assistance animals with only one form of evidence required.
• Renovations: Minor renovations refused by a committee without written reasons within three months will be deemed approved. 
• Developer and Legal Reforms: Developers face increased penalties for failing to provide documents or hold timely AGMs. There are also new requirements for independent cost certification and maintenance scheduling. 
• Unfair Contract Terms: Unfair terms in standard form contracts for goods or services supplied to strata schemes, including strata management contracts, are now prohibited. This applies to new contracts entered, renewed, or varied on or after 1 July 2025

And this is what SCA-NSW says Owners Corporations and agencies should do now: 

• Ensure any new strata managing agency agreement complies with the updated unfair contract terms. The latest SCA (NSW) Strata Managing Agency Agreement reflects these changes.
• Review your embedded network contracts and assistance animal by-laws. 
• Update Section 184 certificate templates to comply with the new disclosure rules. 
• Include sustainability as a standard item on AGM agendas.