NSW: What NSW Strata Managers Need to Know About the 2023–2026 Strata Law Reforms

This article applies to strata schemes in NSW governed by the Strata Schemes Management Act 2015.

The most significant overhaul of strata legislation in over a decade is well underway. Here is what it means for you, your clients and the schemes you manage.

Strata living is no longer a niche segment of the NSW property market. Today, approximately 1.2 million people, representing 25% of the state’s population, live in strata or community title schemes. By 2040, the NSW Government projects that figure will rise to 50% of greater Sydney’s population.

That growth is not without consequence. As strata schemes increase in scale and complexity, so too do the governance demands placed on everyone involved in running them, including professional strata managers. Many schemes now manage assets worth tens of millions of dollars, operate budgets comparable to small businesses, and house hundreds of residents with competing expectations.

It is against this backdrop that NSW has embarked on one of the most comprehensive strata law reform programs in over a decade — a staged series of legislative changes spanning 2023 through to 2026, arising directly from the 2021 statutory review of the Strata Schemes Management Act 2015 (SSMA) and the Strata Schemes Development Act 2015 (SSDA).

These are not incremental tweaks. They are structural reforms and understanding them is now fundamental to professional strata practice.

Why reform? The policy drivers you need to understand

The 2021 statutory review identified persistent, systemic problems across the sector. Maintenance obligations were being deferred or ignored. Governance failures were going unchecked for years. Owners lacked meaningful access to financial information about their own schemes, and the regulatory model, heavily reliant on complaint-driven enforcement, was demonstrably insufficient for the complexity of modern strata living.

The resulting reform agenda is built around three interconnected policy goals:

Accountability — shifting from a self-regulated model to one of active, proactive regulatory oversight, with expanded powers for NSW Fair Trading to investigate breaches, compel document production, issue compliance notices and intervene in dysfunctional schemes.

Consumer protection — recognising that for most lot owners, their strata property represents their single largest financial investment, and that legal frameworks must reflect this reality with enhanced disclosure obligations, protections against unfair contract terms and clearer information rights.

Modernisation — professionalising governance structures so they match the scale and complexity of contemporary strata schemes, including mandatory training, standardised documentation and improved digital transparency.

A staged rollout: what has changed and when

One of the defining features of this reform program is its staged implementation. Changes have been, and continue to be, introduced across six distinct phases.

Stage 1 (2023): Governance flexibility and the courts

The first stage introduced amendments to both strata Acts with a focus on strata renewal processes, empowering the Land and Environment Court to address procedural irregularities with greater discretion. Legally significant, this stage signalled a deliberate move away from rigid procedural formalism toward outcome-based decision-making.

Stage 2 (February–March 2025): Manager accountability

This stage delivered the first major structural changes affecting strata managers directly, through the Strata Managing Agents Legislation Amendment Act 2024 and early provisions of the Strata Schemes Legislation Amendment Act 2025. Key amendments included lowering the threshold for removal of strata committee office-bearers from special to ordinary resolution under s 45 SSMA, and introducing mandatory periodic reporting obligations under s 55 SSMA. In practical terms, this stage marked the beginning of fiduciary-style accountability for managing agents.

Stage 3 (1 July 2025): Duties, liability and extended maintenance obligations

The July 2025 reforms are among the most substantive in the entire program. Amended s 37 SSMA now codifies legal duties for strata committee members, who must act honestly, fairly, and with due care and diligence — standards aligned with corporate governance principles. Section 55 introduces mandatory six-monthly reporting obligations for strata managing agents. Perhaps most significantly for risk management, the limitation period for maintenance claims under s 106 SSMA has been extended from two years to six years, substantially increasing the legal exposure of owners corporations and their managers.

Stage 4 (27 October 2025): Enforcement, financial regulation and building managers

This stage introduced a formal regulatory enforcement model. NSW Fair Trading now holds expanded investigative and enforcement powers, including the ability to seek NCAT orders for the appointment of compulsory managing agents. Financial hardship information statements became mandatory in levy notices, alongside standardised payment plan frameworks. Building managers were also brought within a clearer statutory framework, with formal obligations to act in the best interests of the owners corporation and disclose all financial interests and relationships.

Stage 5 (1 April 2026): Transparency, standardisation and disclosure

The most recent reforms, now in effect, represent the most comprehensive package in the entire program. Section 80 SSMA requires standardised 10-year capital works fund plans, ensuring consistent long-term financial planning across schemes. Section 184 SSMA strata information certificates have been significantly expanded to include compliance actions, financial liabilities and governance information. Developers are now required to provide an Initial Maintenance Schedule (IMS) in a prescribed form, with independent certification mandatory for multi-storey schemes. Together, these changes introduce a standardised disclosure regime aimed at reducing information asymmetry in the strata market.

Stage 6 (late 2026): What is still to come

Further reforms are anticipated in the second half of 2026, including mandatory training requirements for strata committee members and expanded conflict-of-interest disclosure obligations — including requirements to disclose embedded network arrangements in off-the-plan contracts for sale. The reform agenda, in short, is not yet complete.

Your role is fundamentally changing

For strata managers, the cumulative effect of these reforms is significant. The legislation now treats managing agents as highly regulated actors — not simply contracted administrators — subject to disclosure obligations, conflict-of-interest frameworks, and reporting requirements that bear closer resemblance to fiduciary duties than to standard service provider arrangements.

Under s 57 SSMA, agents must not accept commissions or benefits unless approved by the owners corporation by general meeting resolution, with mandatory disclosure of the commission amount and calculation, the nature of any supplier relationship, and why approval is in the owners corporation’s best interests. Under ss 55 and 60 SSMA, six-monthly function reporting and AGM disclosure of past and anticipated commissions are now legal requirements.

Every financial relationship with contractors, insurers, and developers, must be identified, disclosed, and formally justified. Failure to comply carries exposure to regulatory penalties and NCAT orders, including orders requiring repayment of undisclosed commissions.

The strategic challenges you should be planning for

The reforms are broadly welcome and the policy rationale is sound. But implementation presents real and practical challenges that strata managers will increasingly be asked to help navigate.

The capacity gap is perhaps the most pressing. Strata committees remain predominantly composed of volunteer lot owners, often without legal, financial or governance training. The reforms now impose legally enforceable duties on those volunteers, including documentation requirements and oversight obligations that assume a level of institutional capacity many smaller schemes simply do not possess. Managers will find themselves playing an increasingly important support and advisory role.

The compliance burden is unevenly distributed. A large residential tower with professional building management has a very different capacity than three lot schemes that have been self-managed for a decade. The reforms apply uniformly across schemes, which means the relative burden on smaller schemes, in terms of compliance cost, administrative effort and professional advice requirements, is considerably higher.

The disclosure and conflict-of-interest framework adds layers of procedural complexity that require ongoing vigilance. Identifying and documenting every commercial relationship, securing proper approvals and ensuring committees genuinely understand (rather than simply sign off on) disclosure documents is a material operational challenge.

Continuous adaptation is now the baseline. With staged reforms running across multiple years and further changes anticipated, maintaining current knowledge and updating internal systems and processes is an ongoing professional obligation, not a periodic task.

Preparing your strata practice for what comes next

The practical steps for strata managers are clear:

1. Review your disclosure systems and commission approval processes against the updated requirements under ss 55, 57 and 60 SSMA.
2. Audit your capital works fund planning processes ahead of the standardised 10-year plan requirements under s 80 SSMA.
3. Ensure clients understand their obligations under the extended maintenance limitation period in s 106 SSMA.
4. And begin preparing for mandatory committee training requirements, which will likely require you to direct clients to appropriate resources when Stage 6 reforms take effect.

The reforms set a framework. The profession’s job is to make that framework operational, accessible and sustainable for the schemes — large and small — that rely on professional management to function effectively.

Summary

The NSW strata reform program represents a generational shift in how strata schemes are governed and regulated. Legislation sets the framework, but capability, systems and culture determine whether reform delivers real outcomes. That cultural shift must happen on two fronts — within committees, where informal governance must give way to structured compliance, and within agencies, where higher professional standards are now both expected and enforceable. The most effective strata managers will not simply absorb these changes, they will use them as a catalyst to raise standards, rebuild client trust, and lead a profession that is rapidly maturing.

This post appears in Strata News #793.

Anna Hahm
Grace Lawyers
E: Anna.hahm@gracelawyers.com.au

This article has been republished with permission from the author and first appeared on the Grace Lawyers website.