New Strata & Community Land Laws for 2025

On 2 March 2025, the Strata Schemes Legislation Amendment Act 2025 (Amending Act) received assent. The Amending Act introduces multiple reforms for the strata and community land sector, most of which are expected to commence mid-2025. It comes as a result of the 2021 statutory review of the Strata Schemes Development Act 2015 and the Strata Schemes Management Act 2015, as well as other reforms raised by stakeholders since that review.

Whilst a number of these amendments relate to committee members and strata or community land managers or agents, important reforms are being introduced that will affect developers and those living in, buying, or selling strata and community land property. This insight focuses on those amendments.

Maintenance and repair obligations

The Second Reading Speech of the Amending Act noted that feedback received during the statutory review of the strata legislation, which was verified by NSW Fair Trading and the Building Commission, found that too many strata schemes are failing to properly maintain and repair common property which can then lead to rising insurance costs and special levies being imposed.

The Amending Act seeks to prevent non-compliance with maintenance and repair obligations by an owners’ corporation or association by:

• mandating that the 10-year capital works fund plan meets minimum requirements
• extending the time that lot owners have to make a claim for damages as a result of a scheme’s failure to maintain and repair the common property from two to six years from when they first became aware of the loss, and
• enabling Fair Trading to enter into enforceable undertakings with, or issue compliance notices to, owners corporations or associations to take action to remedy a breach of duty to maintain and repair property.

Minor renovations

Pursuant to the amendments under the Amending Act, a strata committee exercising the functions of the owners’ corporation in considering minor renovations must provide written reasons to the lot owner if the request for minor renovations is refused. If the strata committee fails to refuse the approval and give reasons for the refusal within three months of the request, it is deemed to have approved the minor renovations.

Embedded networks

The Amending Act will amend s 132A of the Strata Schemes Management Act 2015 so that the section will apply to the supply of electricity through an embedded network. Section 132A prevents owners’ corporations from being permanently locked into uncompetitive supply agreements, but it currently does not apply to agreements entered into for the supply of electricity through an embedded network.

The Amending Act also imposes new requirements for disclosure of embedded networks at the time of sale. For established strata and community land schemes, the Amending Act (by amending the Conveyancing Act 1919) requires vendors to warrant that, unless disclosed in the contract, the relevant strata or community land scheme does not include an exclusive supply network. Purchasers will test this in the strata information certificate (s 184 certificate) and, it if was not disclosed by the vendor, purchasers may rescind the contract for breach of a vendor warranty.

For off-the-plan sales, developers must disclose in the disclosure statement whether the development includes, or is likely to include, an exclusive supply network and details of the type of service. The developer must notify purchasers before settlement if that disclosure changes. Materially impacted purchasers can rescind the contract or, in some cases, claim compensation if they can show they would not have agreed to buy the property had they known the true position.

Obligations on the original owner

Amendments are also being introduced by the Amending Act that require the original owner/developer of a multi-storey strata scheme to:

• ensure that the initial maintenance schedule meets prescribed minimum requirements that set up a scheme to properly maintain the building, and is contained in the prescribed form (the prescribed form is not yet available for viewing)
• prior to the first AGM, engage an independent surveyor to review the initial maintenance schedule and certify that it has been prepared in accordance with the prescribed form, and
• prior to the first AGM, engage an independent surveyor or other prescribed expert to certify that the estimates of initial levies meet the scheme’s expected expenditure for the year, based on the expenses provided by the original owner.

Evidence of compliance of with these obligations must be delivered to the owners’ corporation at least 14 days before the first AGM.

Failure to comply with these obligations may result in a Court-imposed penalty of up to $55,000.00 for corporations.

The Amending Act has a wide range of amendments that will affect multiple stakeholders in strata and community land schemes. Stakeholders in these areas should familiarise themselves with the amendments before they commence in mid-2025.