New strata laws are now in place to provide relief for owners facing cost-of-living pressures. This includes new powers for NSW Fair Trading to ensure repairs and maintenance of common property aren't neglected in a bid to prevent owners from being hit with expensive special levies.
These world-leading rules form part of an extensive strata reform package implemented by the Minns Labor Government to help address the housing challenges in NSW.
The new laws include:
- Introducing a crucial consumer protection measure helping owners pay off their strata debt by requiring owners' corporations to offer a payment plan before taking debt recovery action and prohibiting blanket rules to refuse payment plans.
- Providing practical assistance to owners in financial stress by requiring a Financial Hardship Information Statement to be sent with every strata levy notice to make it easier for owners to stay on top of their levies and get help faster when they need it.
- Ensuring building managers are held to the same accountability and transparency standards as strata managing agents by requiring them to act in the best interests of their clients, with penalties of between $11,000 and $22,000 for breaches, and to disclose any conflicts of interest or kickbacks, and
- A world-first in strata regulation by allowing NSW Fair Trading to issue compliance notices and enter enforceable undertakings with owners' corporations that do not meet their duties to maintain and repair common property. These changes will ensure serious maintenance issues and defects can be fixed without expensive and time-consuming litigation through the courts or tribunal.
Starting at the end of October, the new laws are part of three tranches of strata reforms the Minns Government has introduced since November 2023. These reforms have been designed to restore consumer confidence in strata living which is vital to the Government's housing agenda. More than 1.2 million people already live in strata, with that number set to rise under the Government's strategic planning reforms.
Previous reforms include increased penalties for strata managing agents who don't disclose conflicts of interest or kickbacks; a ban on unfair contract terms in strata or building management, cleaning, and gardening contracts; making it easier for owners to do minor renovations and removing barriers to the uptake of sustainability measures such as solar panels and electric vehicle charging by prohibiting bylaws that block the infrastructure due to external appearance.
Compliance with the reforms will be led by the $8.4 million Strata and Property Services Taskforce within NSW Fair Trading, which has dedicated inspectors and investigators who examine issues across the real estate industry including strata.
For more information on strata reforms, please visit Guide to strata law changes for strata committees and owners | NSW Government.
Minister for Better Regulation and Fair Trading Anoulack Chanthivong said:
"The Minns Labor Government is focused on giving the 1.2 million people living in strata schemes across New South Wales greater trust and confidence in how strata is regulated.
"These changes build on successive reforms to our state's strata laws that are lifting accountability for strata professionals, increasing transparency in the management process and putting owners back in control over how their schemes are managed.
"Strengthening the owners corporation's repair and maintenance obligation will drive strata communities to be more focused on building upkeep and safety for everyone who lives in or owns property in the scheme.
"When schemes don't meet their repair and maintenance obligations under strata laws, they risk their building falling into disrepair leading to cost blowouts to fix damage, safety issues, legal disputes, and limiting the insurability of the strata complex.
"Anyone can experience financial hardship, and these reforms help provide more clarity and certainty for owners who may need more time to pay their levies, as well as for the strata scheme managing the levy payments."
Director of Casework at Financial Rights Legal Centre Alexandra Kelly said:
"Providing information about the National Debt Helpline on levy notices is already having an impact.
"When stressed callers tell us about being unable to pay their levies, we can advise them they can now request a payment plan. This flexibility should result in more people getting back on track and contributing to their schemes, without unnecessary debt collection fees and charges being added.
"Before these reforms, we frequently spoke to people who were refused a payment plan for no reason, or simply ignored when they requested it. Payment plans are a smart way to let people catch up when life happens and they fall temporarily behind. Hopefully the dubious practice of adding large fees for chasing small debts will also significantly reduce."
CEO of Financial Counselling Australia Dr Domenique Meyrick:
"These reforms are a huge step forward. Financial counsellors witness the hardship faced by struggling strata owners as they deal with aggressive debt recovery over relatively small debts, with little support and no clear pathway to resolve the issue.
"The new laws strike a better balance, giving people a fair chance to get back on track without immediately facing legal action, escalating costs or the risk of losing their homes.
"Financial Counselling Australia is proud that our sector helped drive these reforms and we applaud the NSW Government for listening to our concerns and putting in place much-needed safeguards.
"Financial Counselling Australia would like to see similar safeguards introduced across the country because access to fair treatment shouldn't depend on your postcode."
