NSW: Strata Managing Agents Legislation Amendment Bill 2024 – Disclosure Obligations for Strata Managers

Strata managing agents, the individuals or entities responsible for overseeing the operations and maintenance of strata schemes, play a crucial role in the lives of thousands of Australians. The New South Wales government has introduced the Strata Managing Agents Legislation Amendment Bill 2024 aims to improve transparency, accountability, and financial oversight in the strata management industry. It was tabled in the New South Wales Parliament on August 14, 2024.

These amendments address various issues, including transparency, conflict of interest, and financial accountability. By introducing stricter regulations and penalties, the government seeks to protect the interests of strata owners and residents.

One of the most significant changes introduced by the Strata Managing Agents Legislation Amendment Bill 2024 is the restriction on commissions for insurance policies. Strata managers can no longer claim commissions for insurance policies when the owners corporation has independently obtained quotes and arranged the insurance. This is a major step towards ensuring that strata managers act solely in the best interests of their clients and avoid conflicts of interest.

Key Provisions of the Strata Managing Agents Legislation Amendment Bill 2024:

• Increased Penalties:
  • Specific Offences: The Bill increases maximum penalties for various offences related to strata managing agents, such as breaches of disclosure requirements, failure to obtain insurance quotations, and obstruction of authorised officers.
  • Impact: These harsher penalties aim to deter misconduct and ensure greater compliance with strata management laws.
• Greater Transparency by Strata Managing Agents:
  • Specific Details: The Bill requires owners corporations to approve monetary commissions or training services provided to strata managing agents by a resolution at a general meeting. The motion for the resolution must be accompanied by a document detailing the commission or service, the relationship between the parties, and the reasons for the approval. This is because owners corporations have a fiduciary duty to act in the best interests of their members, as outlined in Section 57(3A), and approving such commissions or services can potentially involve conflicts of interest. By requiring approval from the owners, the Bill ensures that these decisions are made democratically and with the consent of the majority of owners.
  • Impact: This provision strengthens owners’ rights and ensures greater transparency in financial matters related to strata management.
• Disclosure Requirements:
  • Expanded Scope: Strata managing agents must now disclose connections with suppliers of goods or services for the strata scheme and original owners of the scheme under Section 60(1)(c). The agent must provide details about the nature of the relationships and the goods or services supplied.
  • Impact: These additional disclosure requirements enhance transparency and help identify potential conflicts of interest.
• Insurance Quotations:
  • Specific Requirements: Strata managing agents are now required to provide owners corporations with at least three insurance quotations from different providers, or provide written reasons for obtaining fewer quotes. Failure to comply with this requirement is an offence. insurance quotations must include a detailed breakdown of charges, specify the recipients of commissions and broker fees, and disclose any connections between the provider and the strata managing agent. These measures aim to promote competitive pricing, transparency, and informed decision-making by owners.
  • Timeliness: The agent must provide the quotations or written reasons to the owners corporation as soon as practicable.
  • Impact: This provision encourages competitive pricing and helps protect owners from overpaying for insurance and ensures owners have the information they need to make informed decisions about insurance.
• Expanded Powers for Commissioner for Fair Trading:
  • Expanded Powers: The Commissioner for Fair Trading can now apply to the NSW Civil and Administrative Tribunal under section 60(3) for orders requiring strata managing agents to pay the owners corporation the value of undisclosed commissions or training services.
  • Impact: This gives the Commissioner more authority to enforce strata management laws and protect owners’ interests.

These are just some of the key points and additional details contained in the Strata Managing Agents Legislation Amendment Bill 2024. The Bill aims to improve the regulation of strata managing agents and protect the interests of owners and residents.

Here are the links to the Strata Managing Agents Legislation Amendment Bill 2024 and Explanatory note.

The Lookupstrata Team

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