On 2 March 2025, the Strata Schemes Legislation Amendment Bill 2024 (NSW) (Amendment Act) was assented to, and the changes in it are expected to be effective from mid-2025. The Amendment Act amends the Strata Scheme Management Act 2015 (NSW) (Act), the Community Land Management Act 2021 (NSW) (CLM Act), the regulations under those Acts and makes some consequential amendments to other legislation.

The primary purpose of the Amendment Act was to implement the second phase of recommendations from the statutory review report prepared by the Department of Customer Service in November 2021 (Report).

It‘s hoped that these amendments, as well as the other proposed changes, will:

• Improve governance through enhanced accountability and transparency
• Better prevent, identify and rectify building defects
• Support competition and minimise costs for owners, and
• Ensure flexible management and administrative arrangements.

Key Takeaways

The amendments to the Act and the CLM Act include:

• Increasing the accountability for developers relating to initial maintenance and handover by inserting a provision requiring developers of multi-storey schemes to deliver construction documents and records to the owners corporation at least 14 days prior to the first AGM.If a developer fails to provide the relevant material the maximum penalty is 100 units for individuals or 500 units for corporations.
• Increasing the maximum penalty and introducing new on-going offences for failing to convene the first AGM within 2 months of the initial period: the maximum penalty is now 100 penalty units and a further 2 penalty units for each day the offence continues.
• Expanding the duties and obligations of strata committee members. Strata committee members’ duties now include an obligation to:
  • Exercise committee member functions with honesty and fairness, due care and diligence and for the benefit of the owners corporation
  • Comply with the Act and the regulations
  • Only use or disclose information obtained as a committee member as required to carry out strata committee functions or as required by law
  • Not behave in a way that unreasonably affects a person’s lawful use or enjoyment of a lot in the strata scheme or common property, and
  • Complete training prescribed by the regulations (a committee member who fails to complete the required training will cease to be a member of the committee).
• Improving committee governance. The chairperson of the committee of an owners corporation must ensure that at committee meetings:
  • The agenda is followed
  • Order is maintained, and
  • Fair, constructive and open discussion of matters is encouraged.
• Introducing a new statutory duty on building managers to act in the best interests of the owners corporation. The Amendment Act also clarifies that a person is not a building manager if the person exercises the functions of a building manager purely in their capacity as a member of the strata committee or if the person is prescribed as not being a building manager.
• Removing any flexibility in the form of the first ten year capital works fund plan. This plan must now be in the form prescribed by the regulations.
• Modifying payment plan procedures in relation to overdue levies.
  • Owners corporations may agree to enter into or reasonably refuse to enter into a payment plan (the regulations prescribe what constitutes a reasonable refusal and the Civil and Administrative Tribunal may order an owners corporation to enter into a payment plan if the owners corporation refusal is considered unreasonable)
  • Owners corporations may not take recovery action if a payment plan is being complied with, and
  • The period before an owners corporation may validly take action to recover an unpaid contribution, interest on the unpaid contribution and the reasonable debt recovery expenses of the owners corporation has increased from 21 days to 30 days.
• Modifying compliance with the statutory duty to maintain and repair common property.
  • Owners corporations may defer fulfilling their statutory duty to maintain and repair common property until after taking action against an owner or another person in relation to the damage – provided that the deferment will not compromise the safety of building, structures or common property within the strata scheme, nor restrict access to or use of the common property or any lot within the scheme)Where an owner wishes to bring an action against an owners corporation for a breach of the statutory duty to maintain and repair common property, the time limit for breach of that statutory duty has been extended from two years to six years (which broadly aligns with the longer of the statutory warranty periods under the Home Building Act 1989 (NSW)).
• Inserting investigation and enforcement powers for the Commissioner for Fair Trading in relation to compliance with the Act, particularly in relation to the owners corporation statutory duty to maintain and repair common property.