Strata Reforms Come into Effect in New South Wales

The new strata laws now in effect in NSW focus on enhancing accountability and transparency.  

These reforms aim to provide property owners with better information and hold strata managers more accountable by increasing transparency around their financial relationships and potential conflicts.  

These changes are part of the second phase of reforms passed by the NSW Government to enhance the strata industry. A third phase, currently being debated in NSW Parliament, is aimed at ensuring that developers are accountable for accurate initial strata levies and will introduce provisions for financial hardship.

Under the new laws, strata managers must:  

• Disclose any connections with suppliers and developers, including the nature of the relationships 
• Offer detailed breakdowns of insurance quotes, including commissions and broker fees  
• Report in real time if any new connections or interests arise during their tenure.  

Strata managers must also provide more detailed annual reports to owners corporations that note any connections between suppliers and developers.

Minister for Better Regulation and Fair Trading Anoulack Chanthivong said:  

“Strata owners deserve clear, timely, and honest information from their managers, and these laws provide a vital step in restoring trust and supporting better decision-making for strata communities.” 

NSW Fair Trading will enforce these new obligations, with strata managers expected to comply by reviewing their past disclosure practices and ensuring they meet the updated reporting requirements. 

Managers who fail to meet the new disclosure standards could face penalties of up to $110,000.  

NIBA has been engaging with the NSW Government to ensure that insurance brokers remain well positioned as trusted partners for strata communities and welcomes the steps the NSW Government has taken to build consumer trust and confidence in the sector.