NSW: Major NSW Strata Reforms Incoming: First Stage Rolls Out 1 July 2025

The NSW Government has announced the commencement date for the first significant phase of strata reforms to strata and community land laws: 1 July 2025. These changes are the result of recommendations from the 2021 statutory review of strata laws, along with other issues identified since then, and also aim to align community land laws with strata laws. More information about how these changes affect community land law in 2025 can be found here.

These extensive amendments are set to affect a broad spectrum of individuals and entities involved in strata and community living across NSW. This includes strata managing agents, building managers, developers, tenants, strata property owners, and strata committee members.

Timelines: What NSW strata reforms are rolling out 1 July 2025 and what’s changing later in the year?

The reforms are being introduced in stages. Some changes related to strata manager disclosure obligations already came into effect in February 2025. The 1 July 2025 date marks the rollout of the second phase of NSW strata reforms, described as the most significant reforms since 2015. Further changes are scheduled to commence from later in 2025.

Key reforms discussed

Here are the 10 key changes in the NSW strata reforms commencing on 1 July 2025:

1. Encourage sustainability in strata schemes
   • By-laws that prevent the installation of sustainability infrastructure solely based on appearance will be prohibited. An exception applies for properties that are heritage listed or located within a heritage conservation area. Schemes should review and update their by-laws accordingly.
   • Schemes will be required to consider sustainability at each Annual General Meeting (AGM), including reviewing energy and water consumption and costs for infrastructure. An item must be included on the AGM agenda for this purpose.
   • The capital works fund plan must now be in a prescribed form. Owners corporations must have regard to the original owner’s maintenance schedule when preparing their first 10-year plan.
2. Protect owners in strata from unfair contract terms
   • Unfair contract terms will be banned in standard form contracts for the supply of goods or services, or for the sale or grant of an interest in land to schemes.
3. Uplift strata management services to improve owners’ confidence
   • Strata managing agents will be required to report every six months to the scheme on the functions they perform, such as chairing meetings and organising repairs. This changes from the previous annual reporting requirement.
   • Certain terms will be banned in strata management contracts signed on or after 1 July 2025.
   • A statutory defense for strata managing agents will be introduced.
   • NCAT will have the ability to terminate strata managing agent agreements or building management agent agreements if the agent or their business is acting unlawfully.
4. Impose stricter rules on developers
   • Developers of multi-story buildings will be required to provide additional documents before the first AGM.
   • Penalties will significantly increase. There are now quite significant penalties if the developer does not meet these time frames, including a concept of a continuing offense for every day they are late.
5. Make it easier to install accessibility infrastructure uptake
   • The voting threshold to approve upgrades for accessibility purposes is lowered to a majority approval. This mirrors the rules for sustainability infrastructure resolutions. A new definition of “accessibility infrastructure” is introduced, broadly defined as changes to common property to facilitate access for a person with a disability to the common property or their lot.
6. Support owners with assistance animals
   • If requested under a by-law, a person will only need to provide one form of evidence regarding their assistance animal.
   • The list of acceptable evidence has been expanded. This includes various forms of identification from training organisations, evidence of completing specific training programs, government agency evidence, local council recognition, dog badges/medallions, or a written statement from a registered health practitioner (from specific health professions).
   • Schemes should review and update their by-laws if they conflict with this change.
7. Make it easier to obtain approvals for minor renovations
   1. If a strata committee refuses a lot owner’s minor renovation request, they must provide written reasons for the refusal.
   2. The refusal and written reasons must be provided within three months of the request.
   3. Failure to provide the refusal and written reasons within the three-month period can result in the minor renovation request being deemed approved.
   4. Schemes are required to keep records of minor renovations for 10 years. Committees and managing agents are encouraged to keep a renovation register.
8. Improve repairs and maintenance
   • The duty of the owners corporation to repair and maintain common property cannot be deferred where the safety of buildings, structures, or common property is impacted, or where a person’s access to or use of a lot or common property is impacted.
   • This change applies if the association commenced action against a person after 1 July 2025. The increase in the time limit is significant.
9. Improve protections for owners entering into new utility contracts, including embedded networks
   • Agreements for the supply of electricity through an embedded network entered into on or after 1 July 2025 will have a maximum term limit. They will expire at the first AGM if made before the meeting, or after three years from the start date.
   • New disclosure requirements apply for exclusive supply (embedded) networks.
   • Section 184 certificates must now state whether an exclusive supply network exists in the building and, if so, the nature of the services provided. The definition of “utility” is broad, including communication and domestic services like phone, intercom, electricity, water, EV charging, etc.
10. Increases to record inspection fees
    • Fees for inspecting records will increase from 1 July 2025 for persons other than owners requesting access, such as prospective buyers.
    • The fee for the first hour of inspection increases from $31 to $60, and for each half hour after that, it increases from $16 to $30. The fee increase does not apply to owners inspecting their own records.
    • The same fee applies regardless of whether the inspection is carried out in person or online.
    • The new laws will also require electronic access to records to be provided through secured means. Schemes and agents should update their fee structures and ensure secure access is provided for digital records.

Other Key Changes in the NSW Strata Reforms Commencing 1 July 2025

In addition to the categories above, other important changes taking effect on 1 July 2025 include:

Uplifting strata professional services to improve owners’ confidence

Strata managing agents will be required to report to the owners corporation every 6 months on the services they perform. Previously, this reporting was required every 12 months. Certain terms in strata management contracts will be banned from the start date of the new laws. These include terms that require the owners corporation to pay for the agent’s professional indemnity liabilities or limit the agent’s liability to a specific amount, unless the agreement is covered by an approved professional standards scheme. A statutory defence is also introduced for strata managing agents if a breach of a delegated duty was caused by the owners corporation and the agent took reasonable steps to prevent it. Owners corporations should review new or renewed strata management contracts after 1 July 2025 to ensure these banned terms are not present.

Improving protections for owners entering into utility contracts, including embedded networks

Changes aim to strengthen protections for owners regarding utility contracts, specifically embedded networks. An embedded network is a private network supplying services like electricity, water, gas, and other utilities. Under the new laws, agreements for the supply of electricity through an embedded network entered into on or after 1 July 2025 will have term limits. If the agreement is made before the first AGM, it will expire at that meeting; otherwise, it will expire three years from its start date. The definition of “utility” is broadened to clarify that the same term limits apply to other utility agreements the owners corporation enters into, including services such as waste removal, air conditioning, stormwater retention and filtration, sewage, recycling, and electric vehicle charging.

Strengthening developer accountability for new strata schemes

Penalties on developers will be increased for failing to hold the first AGM on time or failing to provide certain documents to owners 14 days before the meeting. A penalty of up to $11,000 can apply for a breach, plus an additional $220 for each day the meeting is delayed beyond two months of the ‘initial period’ or the documents are not provided on time. For multi-story buildings (defined as containing more than one level with a different lot above what is below), developers must provide an initial maintenance schedule (IMS) in the prescribed form and estimates for the administration and capital works funds 14 days before the first AGM. The IMS and the fund estimates must be reviewed and certified by an independent surveyor or another prescribed person. These measures are intended to support new owners with effective planning for repairs and maintenance.

Approval of legal services, uncollected goods and common property rights by-laws

• The laws clarify that an owners corporation’s approval for obtaining legal services can be for a maximum amount or an unlimited amount, although generally, approval is needed for costs above $3,000 unless it’s for non-urgent services.
• The Uncollected Goods Act 1995 will be amended to include goods left behind on an owner’s property, requiring the owners corporation to seek consent from the owner before removing abandoned goods from the lot.
• For common property rights by-laws (which grant exclusive use or special privileges over common property), the requirement for the benefiting owner’s consent before amending or revoking the by-law is extended. However, the owner’s consent cannot be unreasonably refused. Special resolutions approving alterations to common property must now specify who is responsible for ongoing repair and maintenance. The consent required for making a by-law granting rights or special privileges (like exclusive use) now also extends to amending or revoking that by-law, and consent cannot be unreasonably refused.

Further Changes Expected from Later in 2025

Several other significant NSW strata reforms are scheduled to commence later than 1 July 2025:

Requiring owners corporations to maintain and repair common property

Changes include increasing NSW Fair Trading’s powers to respond when owners corporations have not met their legal duty to maintain their building. These new powers encompass compliance notices and agreements that are legally-binding (‘enforceable undertakings’). Additionally, a standard form will be prescribed for the 10-year capital works fund plan and for the initial maintenance schedule for new schemes.

Improving strata committee governance

Changes in this area include the introduction of training requirements for strata committee members.

Assisting owners in financial hardship

Changes aim to support owners experiencing financial difficulty. This includes new information requirements for strata levy notices, which will feature details to help owners get assistance early, such as contact information for the National Debt Helpline. Strata committees will be allowed to enter into payment plans with owners in financial hardship, a decision that currently requires owners corporation approval. Schemes are required to consider all requests to enter into a payment plan. An owners corporation must enter into a payment plan with an owner who requests one, unless they can refuse the request for reasons permitted by the new laws. The notice period given to an owner before the strata scheme commences debt recovery action against them will be increased to at least 30 days (up from 21 days). A fairer process for paying off strata debt is introduced, where overdue payments made by an owner first apply to their strata levies, followed by any interest and then debt recovery costs.

Strengthening developer accountability for new strata schemes

Changes aim to strengthen accountability for developers of new strata schemes. Developers will be required to have the initial maintenance schedule and initial levy estimates independently certified. This independent certification is intended to help new owners plan and carry out effective repairs and maintenance. Penalties will be increased for developers who fail to meet these new obligations.

Uplifting building manager conduct requirements

Changes include imposing new duties on building managers. An example given is a duty for building managers to act in the best interests of the owners corporation.

Adding new disclosure requirements about embedded networks at the point of sale

Changes require the sale contract for a strata property to disclose certain information about embedded networks.

How are duplexes in NSW affected by the upcoming changes?

The NSW Government recognises that many duplexes in NSW are not managed by a strata manager. Their resource provides a summary of how the changes can affect self managed duplex, specifically detailing the changes in relation to sustainability, accessibility infrastructure, unfair contract terms and assistance animals. You can find out more here under the heading How do the 1 July changes affect duplexes?

Access the Legislation

You can access the Strata Schemes Legislation Amendment Bill 2024 here.

This article details significant NSW strata law reforms, commencing in stages from 1 July 2025. These extensive amendments will impact a broad range of individuals and entities involved in strata and community living across NSW. The reforms aim to address various aspects of strata management and living, including promoting sustainability, protecting owners from unfair contract terms and improving utility contracts, uplifting strata professional services, strengthening developer accountability, facilitating accessibility and minor renovations, improving repairs and maintenance processes, assisting owners in financial hardship, and enhancing building manager conduct. With key changes rolling out from 1 July 2025 and further reforms scheduled for later in the year, stakeholders in strata schemes should review the details provided to understand and prepare for the new obligations and protections.

The LookUpStrata Team

This post appears in Strata News #746.

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Read next:

• NSW: Navigating the Strata Schemes Legislation Amendment Bill 2025
• NSW: Strata Managing Agents Legislation Amendment Bill 2024 – Disclosure Obligations for Strata Managers

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