NSW strata law reforms – are you ready for the next round of changes?

2025 has seen a number of changes to strata law in New South Wales. These changes impact all players in strata, from lot owners and owners corporations to developers, strata managing agents and building managers.

The significant reforms came into effect under the Strata Schemes Legislation Amendment Act 2025 (NSW) (the Act). The next round of round changes is about to commence on 27 October 2025, to complement the earlier changes introduced on 3 February and 1 July 2025. At this stage, a further round is expected to be rolled out on 1 April 2026.

A summary of the key changes is set out below.

Changes set to commence on 27 October 2025: enforcement powers, strata levies and building managers

This round of changes will see significant changes relating to the enforcement powers of Fair Trading, a change to the way in which strata levies are collected and additional regulation on building managers.

Enforcement powers for Fair Trading 

In a move that will see NSW Fair Trading getting tough on strata repairs, Fair Trading will have strong powers to help ensure owners corporations meet their duty to repair and maintain common property. Fair Trading will have the power to investigate any potential breaches of the duty, including powers to:

•  demand documents and answers

•  enter buildings and record evidence.

Where a breach of the duty has occurred, Fair Trading can take a number of steps, including:

• request formal, enforceable commitment from the owners corporation to address the breach of duty

• issue compliance notices or fines

• apply to the Tribunal for orders or appoint a new strata manager

• in serious matters, commence prosecution proceedings.

New rules for strata levies 

In a bid to help lot owners facing financial hardship, levy notices must now include a Financial Hardship Information Statement, which includes contact details for the National Debt Helpline, a free and independent financial counselling service.

In addition, lot owners can request a 12-month payment plan using a new standard form. Once a request is received, an owners corporation must:

• consider the request fairly

• respond in writing within 28 days

• give reasons if refusing the request.

Lot owners can challenge unfair refusals through mediation or the Tribunal.

The new changes also dictate how the repayments are to be applied to the overdue amount and what recovery action the owners corporation can take against a lot owner.

Clarifying the role of building managers

The new rules stipulate that only those formally appointed are considered building managers, such that informal agreements will not be recognised. In addition, building managers will have new duties, obligations and disclosure requirements.

1 July 2025 amendments: key changes regarding defects, maintenance, renovations and developer obligations

The changes which came into effect on 1 July 2025 include those relating to defect management, repair obligations, renovation approvals and developer conduct.

Below is an overview of the major changes which were implemented in July 2025 and their implications.

Urgent defect repairs

The legislation prioritises safety, requiring urgent repairs to common property defects to be undertaken immediately regardless of any ongoing legal proceedings if the defect poses a risk to safety or access (s 106(4) of the Act). For example, if a roof is leaking or façade panels are unstable, the strata committee must act without delay.

Additionally, lot owners now have six years (up from two) to take legal action against an owners corporation that fails to repair and maintain common property. This extended timeframe increases potential liability and incentivises strata committees to undertake proactive maintenance.

Streamlined minor renovations

Minor renovations such as kitchen upgrades, flooring replacements, or internal reconfigurations are now easier to carry out. If a lot owner submits a request and it is not refused within three months, approval is deemed to have been granted, provided there is a by-law in place authorising the strata committee to approve such works. Any refusal must include written reasons and be issued within the same timeframe. All approvals must be recorded in the strata records and retained for a minimum of 10 years, ensuring transparency and traceability.

Developer accountability for documents

Developers must now convene the first annual general meeting (AGM) within two months of the end of the initial period and must provide all required documentation such as warranties and the initial maintenance schedule, at least 14 days in advance.

Failure to comply may result in penalties of up to 100 penalty units (currently $11,000), plus an additional 2 penalty units per day ($220 per day) until rectified. This represents a tenfold increase from previous fines.

Limits on initial contracts and unfair terms

Initial utility contracts (including electricity, waste, stormwater, and EV charging) entered into by developers are now limited to a maximum of three years (previously ten). Utility supply agreements including embedded network contracts must expire by the first AGM, if the agreement was made before the meeting, or three years from the start date of the agreement.

From July 2025, owners corporations and community associations are also protected under the Australian Consumer Law (ACL) provisions concerning unfair contract terms. Contracts that include terms such as excessive penalties or clauses that unfairly limit liability may now be declared void. These changes significantly reduce developers’ ability to impose long-term, one-sided arrangements, empowering owners corporations with greater control and transparency.

The above changes are all in addition to the amendments which were implemented in February 2025. These changes primarily related to increased disclosure obligations and approval requirements for strata managers.

The next stage of reforms: April 2026

At this stage, further reforms are scheduled to commence on 1 April 2026, continuing the NSW Government’s staged approach to improving strata governance and consumer protection. Those changes include requirements for:

• developers to prepare an initial maintenance schedule using a standard form

• developers of multi-storey schemes to engage an independent, qualified surveyor to review and certify the initial maintenance plan and first-year budget. These measures are intended to improve upfront planning, documentation, and early detection of defects.

• strata information certificates to include additional information.

Other changes in 2026

Additional reforms which will be implemented later in 2026 will include:

• Mandatory committee training: Strata committee members will be required to complete prescribed training or risk removal from the committee, promoting more informed decision-making

• Embedded network disclosure: Contracts for the sale of strata lots to include disclosure of any embedded utility networks, offering prospective buyers greater transparency.

Whether you're a lot owner, part of a strata committee, a managing agent, developer or building manager, these reforms will reshape your rights and responsibilities in NSW strata living. If you’d like further information or guidance on how these changes may affect you, please don’t hesitate to get in touch. 

Our strata team will be happy to assist in all aspects of strata, including tender and contract reviews, any form of dispute relating to by-laws and building defect issues or any other matter arising from strata living.

 Authors: Sharon Levy & Antoni Risteski

 

This publication is intended as a source of information only. No reader should act on any matter without first obtaining professional advice.