Consumer law to crack down on strata rorts

Strata owners are expected to benefit from major legal reforms coming to strata in NSW from next month, with stronger contract protections, easier approvals for minor renovations, stricter guidelines for committee members and tougher rules for developers.

These rule changes are especially good news for new and future owners who could currently be duped into signing unfair, long-term, and inflated contracts presented at the start of a strata scheme’s life by apartment developers, sometimes acting in concert with strata managers.

At present, new owners have one shot, the first time they get together, to review a plethora of complicated contracts, some as long as 15 years or more. Too often the developer will have traded the free installation of infrastructure in exchange for pushing the owners to sign up for the inflated maintenance deals.

From July 1, all strata contracts covering areas such as management, embedded networks and service provision, must align with Australian Consumer Law protections. In short, contracts that are designed to disadvantage the consumer to the benefit of the contractor could be subject to legal challenge, an option previously not available under strata law.

The consumer protections have been introduced following the controversial Netstrata review which exposed unfair and opaque practices across the strata management and property development industry.

These changes aren’t just about embedded networks and new schemes. Strata committee members and especially office-bearers, will have formal responsibilities, like acting honestly and fairly, codified.

They’ll also need to review how they approve minor renovations, update by-laws, and discuss sustainability. Apparently there will be no more blocking solar panels, reverse cycle air-con units or vehicle chargers because they “don’t fit in with the appearance of the block”.

Strata managers may need to look at their contracts, fees, and processes to make sure they meet the new legal standards.  

Other strata service providers, from cleaners through to energy suppliers, will need to make sure their contracts and agreements are fair and clear.

There’s more changes coming later in 2025 too, especially around repairs, financial hardship support, and developer transparency.

Meanwhile the new July 1 changes include:

• Easier approvals for minor renovations (yay)
  
• More support for people with assistance animals (those pet rules are never going away)
  
• Better rules for approving and disclosing legal and utility contracts
  
• Stronger protections from unfair terms
  
• New responsibilities for strata committee members
  
• Boosted transparency and service standards for strata managers
  
• More pressure on developers to do the right thing
  
• Stricter rules around repairs, safety, and maintenance

And it’s not just new rules. Fair Trading will have enhanced enforcement powers, too. You can read more on the NSW Fair Trading website and here at Flat Chat we will be looking at the changes in more detail to work out what differences, if any, they will make.

The reforms – which have been widely discussed on Flat Chat – should raise performance and accountability standards in strata, property services, retirement villages, and residential land lease properties. 

Meanwhile, if you’re on a strata committee, make sure you understand the new laws, especially your roles and responsibilities. If you own or rent in a strata scheme, ask your strata manager or committee representatives what the changes might mean for outstanding business in your scheme.

The reforms come as the number of strata schemes in NSW has grown from around 70,000 at the end of 2015 to more than 87,000 in 2025 – and even more coming with pressure to build more housing.