The 2025 NSW Strata Law Update represents a major overhaul of the Strata Schemes Management Act 2015, rolled out in several tranches throughout the year. These changes are designed to increase transparency, protect owners from misconduct, and modernize building management.

Here is a summary of the most critical updates you need to know as a lot owner or committee member.

1. Financial Management & Levy Recovery

Since July 2025, the government has introduced fairer arrangements for owners experiencing financial hardship:

• Mandatory Payment Plans: Owners corporations must now offer payment plans to owners with overdue levies before they can begin legal recovery action.
• Capped Interest: The maximum interest rate on unpaid levies has been reduced from 10% to 6% per annum.
• Hardship Statements: All levy notices issued from October 27, 2025 onwards must include a “Financial Hardship Information Statement”.
• Reasonable Costs: Legal costs recoverable from owners for debt collection are now limited to “reasonable” expenses to prevent excessive fees.

2. Strata & Building Manager Accountability

The reforms significantly tighten the rules for those hired to manage your scheme:

• Disclosure of Benefits: Strata managers must now provide mandatory, detailed disclosure of all commissions, training services, or benefits received from third parties (like insurers or contractors).
• Statutory Duty for Building Managers: As of October 2025, building managers have a legal duty to act honestly and in the best interests of the owners corporation.
• Shorter Contracts: Initial strata management agreements are now limited to a maximum of 3 years (down from 10 years) and building manager terms are also being reduced from 10 years to 3 years to ensure competitive service.
• Tribunal Power: NCAT has expanded powers to terminate or amend management agreements if a manager is found to be acting unlawfully or in bad faith.

3. Repairs, Maintenance & Fair Trading Powers

The 2025 reforms give NSW Fair Trading much stronger “teeth” to enforce building maintenance:

• Compliance Notices: Fair Trading can now issue compliance and penalty notices directly to owners corporations that fail in their duty to repair and maintain common property.
• Extended Claim Period: Owners now have up to 6 years (up from 2 years) to bring a “Section 106” claim against an owners corporation for losses resulting from a failure to maintain common property.
• Window Safety: The law clarifies that maintaining window safety devices is the strict responsibility of the owners corporation.

4. Committee Governance & Transparency

Governance has been modernized to reduce conflicts and increase owner awareness:

• Code of Conduct: A statutory Code of Conduct now applies to all strata committee members, requiring them to disclose personal interests and act in good faith.
• Electronic Inspection: Key documents like by-laws, insurance certificates, and minutes must be available for electronic inspection upon request.
• 10-Day Deadline: Strata managers or committees now have a strict 10-day limit to produce requested documents, replacing the vague “reasonable period” standard.

Upcoming Changes (2026)

While most 2025 tranches are now in effect, keep an eye on these pending updates:

• 1 April 2026: New prescribed forms for 10-year capital works fund plans and initial maintenance schedules become mandatory.
• 1 July 2026: The building bond for developers is expected to increase from 2% to 3% of the contract price.
• Late 2026: Mandatory training requirements for all strata committee members are expected to be finalized.