NSW: By 1 July Community Scheme Managers MUST Know…

The article is about critical reforms coming into effect on 1 July 2025 that significantly change how community scheme managers must operate under the Community Land Management Act 2021, including enhanced transparency, stronger committee duties, clearer maintenance responsibilities, and encouragement of sustainability and accessibility.

While the focus has been on strata reforms, equally critical changes are coming to community schemes (Community, Precinct, and Neighbourhood Associations) under the Community Land Management Act 2021 (CLMA) from July 1, 2025. Stage 1 of these reforms will significantly impact how community schemes are managed and governed.

Here’s what you need to know about stage 1:

1. Managers: Enhanced Transparency & New Reporting (Critical!)

• New Disclosure Rules: Before and during your appointment, you must disclose all connections with suppliers (e.g., referral fees, shared interests). You now need Community Association approval for any commissions or training services not in your initial agreement.
• Six-Monthly Reports: You will now be required to report on your functions to the Community Association every six months, not annually.
• Penalties: Failure to comply carries substantial fines (up to $55,000 for corporations, $11,000 for individuals).
• Action: Immediately update your agency agreements, internal processes, and reporting templates.

2. Executive Committees: Stronger Duties & Training Ahead

• Elevated Responsibilities: Committee members will have enhanced duties, similar to company directors (honesty, fairness, due diligence, acting in the Association’s best interest).
• Mandatory Training: While details are pending, mandatory training for executive committee members is coming.
• Action: Advise committees of their expanded role and the need to stay informed about upcoming training.

3. Common Property & Defects: Clearer Maintenance Duty

• Duty to Maintain: The Community Association’s duty to maintain common property now explicitly includes original building defects. Safety and access issues cannot be deferred.
• Fair Trading Powers: NSW Fair Trading gains new powers to enforce maintenance duties on Community Associations (compliance notices, investigations).
• Extended Claims: Lot owners now have six years (up from two) to claim damages for maintenance failures.
• Action: Prioritise maintenance, especially for safety/access. Review capital works planning with these expanded duties in mind.

4. Encouraging Sustainability & Accessibility

• Easier Approvals: By-laws banning sustainability upgrades (e.g., solar, EV charging) based solely on appearance are now banned (unless heritage-listed). Most accessibility upgrades now only require a simple majority vote.
• AGM Focus: Sustainability must now be a mandatory item at every AGM.
• Action: Encourage schemes to explore and implement green and accessible improvements.

For more information visit NSW Government

Crucial Next Steps for Community Scheme Mangers:

These reforms are not minor tweaks; they reshape how community schemes are governed and managed.

Ensure you are fully compliant and can confidently guide your Community Association clients.

It is advised that you seek legal advice from a team who understands the new Community Land Laws such JS Mueller & Co Strata Lawyers who has extensive experience in Community Land Laws and can help you with tailored advice on:

• Updating your management agreements.
• Compliance strategies for new disclosure and reporting.
• Navigating enhanced committee duties and maintenance obligations.
• Facilitating sustainability and accessibility projects.

Adrian Mueller
JS Mueller & Co Lawyers
E: [email protected]
P: 02 9562 1266

This post appears in Strata News #750.

If you have a question or something to add to the article, please leave a comment below.

Disclaimer: The information contained in this article is provided for your personal information only. It is not meant to be legal or professional advice nor should it be used as a substitute for such advice. You should seek legal advice for your specific circumstances before relying on any information herein. Contact JS Mueller & Co for any required legal assistance.

JS Mueller & Co Lawyers has been servicing the strata industry across metropolitan and regional NSW for over 40 years. We are a specialist firm of strata lawyers with in depth and unmatched experience in, and comprehensive knowledge of strata law and levy collection.

Read next:

• NSW Behind the Strata Law Changes 2025: For owners and committees
• NSW: Major NSW Strata Reforms Incoming: First Stage Rolls Out 1 July 2025
• NSW: Navigating the Strata Schemes Legislation Amendment Bill 2025

This article has been republished with permission from the author and first appeared on the JS Mueller & Co Lawyers website.

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