From 1 July 2025, the NSW Government is implementing the second phase of major strata law reforms—marking the most significant changes since 2015. These reforms are designed to improve fairness, sustainability, and service quality.
The key changes to be rolled out for phase 2 are:
- Minor Renovations: If a committee denies approval for an owner’s minor renovation, they must provide written reasons within three months. If no response is given, approval is automatically granted (this applies only if a relevant by-law is in place). Owners Corporations must also keep records of approved renovations for 10 years.
- Encouraging Sustainability: By-laws prohibiting sustainable infrastructure that alters common property appearance will be banned—unless the property is heritage-listed.
A motion to consider sustainability in the scheme must be included on each AGM agenda. - Unfair Contract Terms: Contracts for goods and services—including strata and building management—can no longer contain unfair terms. A term is deemed unfair if it creates a significant imbalance in rights, causes financial loss, or is unnecessary for protecting the interests of the benefiting party.
- Accessibility Infrastructure: Installing disability accessibility infrastructure on common property will require only a majority vote, replacing the need for a special resolution.
- Committee Member Responsibilities: Strata Committee Members must act fairly, avoid unreasonable interference with others’ enjoyment of their lot, or common property, and comply with all obligations, including appropriate disclosure of information. Chairpersons must follow agendas, maintain order, and encourage fair discussions.
- Improvement to Repairs and Maintenance: Owners Corporations must not delay repairs to common property if the delay affects accessibility or usage. Additionally, initial maintenance schedules prepared by the developer must be considered in the first 10-year forecast.
- Assistance Animals: Occupants need to provide only one form of evidence—such as a GP letter or Council recognition—if requested to prove an animal is an assistance animal.
- Strata Inspection Fees: Inspection fees for non-owners will rise from $31 to $60 for the first hour and $16 to $30 for each additional half-hour.
- Improving Owners’ Confidence: Reporting requirements under Section 55 will shift from 12-month to 6-month reporting intervals. Owners will no longer be required to cover strata managers’ professional indemnity liability.
- New Strata Schemes: Developers face penalties of up to $11,000 if they fail to hold the first AGM on time or provide required documents to Owners 14 days before the meeting. A daily penalty of $220 applies for each day the meeting is overdue.
- Uncollected Goods: Strata schemes will receive clearer powers to dispose of goods left on common property, following a notice and waiting period process.
- Approval of Legal Services: Owners Corporations must formally approve legal services at a general meeting before engaging a lawyer. This approval can apply to a specific issue or cover a set budget. Non-urgent services under $3,000 do not require prior approval but must be documented and justified.
- Common Property Rights By-Law: The reforms will streamline the process for creating or amending these by-laws.
Further changes will be rolled out in late 2025 which will include:
- Training requirements for Strata Committee Members
- Assisting Owners in Financial Hardship
- Strengthened Developer Accountability
- New disclosure requirements about embedded networks
The Bright & Duggan Group remains committed to supporting the new legislation and fostering stronger relationships between owners and committees. These reforms align with our mission to shape communities for a brighter future.