New strata manager disclosure laws revealed

Thanks to our Flatchatter Tina, who posted this on the Forum, we now know what Fair Trading has planned and how it will be enforced (if at all).

You may not be aware of it because it was sent to strata committee members registered on the Strata Hub database and they were asked to pass it on to owners.

So, if your strata committee isn’t registered on the Hub, or if your committee members couldn’t be bothered to send it out, this is for you.

---

Guidance on strata managers’ new disclosure duties

New laws will require your strata manager, if you have one, to disclose more information, more frequently to the owners’ corporation. This includes details about:

• the strata manager’s connections with suppliers and developer
• commissions and training services they may receive

If they assist your strata scheme to secure insurance quotes, these quotes must have a breakdown of certain costs. Strata managers will be banned from getting a commission on insurance – if your scheme obtained the quote and arranged for its payment independently, without their help.

How do the changes impact me?

The new disclosure obligations will help your owners corporation to make the best decision about:

• your current strata manager’s appointment
• the appointment of a new strata manager
• how you work with your strata manager

This is thanks to the improved transparency you will have of how they manage your scheme.

For Fair Trading’s strata living guide for an overview of the new disclosure laws click here.

Understanding strata managers’ new disclosures in more detail

Currently, your strata manager can only accept any commission or training service linked with their management of your strata scheme if:

• they include the details in the agency agreement. This is the contract the owners corporation negotiates with them when the strata manager is being appointed. Or,
• they gain approval first at a general meeting of the owners corporation

From 3 February 2025, your strata manager’s approval request at a general meeting for a commission or training service must include a new written explanation. This will need to:

• include why approval is in the owners corporation’s interest
• disclose details, such as the commission amount

The owners will then review and decide on whether to approve the request.

From 3 February 2025, a strata manager will also need to:

• make certain disclosures before they are appointed to your scheme about:

◦ suppliers they routinely use
◦ if they have given advice about strata plans or community land plans to your building’s developer in the past two years. Such advice may indicate that the strata manager has an ongoing relationship with the developer which may be a conflict of interest.

• make real-time written disclosures – as soon as they become aware of any connections or interests they have with your scheme or suppliers.
• disclose more information at your annual general meeting (AGM). This includes:

◦ any connections they have with suppliers or the building’s developer
◦ connections from the previous 12 months.

• provide clearly itemised quotes for insurance policies. This includes setting out commission and insurance broker fee amounts – and who these are ultimately paid to. The base premium amount of the insurance and GST will also need to be clearly set out.

What if my strata manager does not comply?

From 3 February 2025, you can make a complaint to NSW Fair Trading if you believe a strata manager has breached their new disclosure obligations. Click here for details.

Where can I find out more?

For more details about the increased disclosure requirements click here. For key updates in the strata section once the law changes take place click here.