Your 2026 Strata By-Law Health Check for NSW Strata Schemes

Introduction

Strata law in New South Wales has undergone significant changes over recent years, with major reforms taking effect throughout 2025. As a result, every strata scheme must now carefully review its by-laws to ensure they reflect the latest legislative requirements and avoid the risk of invalid or unenforceable rules.

This guide is designed to help strata owners and owners corporations navigate the most current legal landscape in 2026. It highlights the key updates and practical steps needed to keep your strata by-laws compliant, addressing new standards for sustainability, renovations, animals, financial hardship, and more.

Interactive Tool: Check If Your Strata By-Law Is Valid & Enforceable

Checking Your By-Laws Against Recent Legislative Reforms

Sustainability Infrastructure & Appearance Rules for Your Strata

As of July 2025, strata schemes must revise any by-laws that prohibit sustainability infrastructure based only on appearance. Under these reforms, a by-law is invalid if it unreasonably restricts the installation of items like solar panels or electric vehicle (EV) chargers.

However, this rule does not apply to:

• heritage-listed buildings
• structures located within a heritage conservation area

For all other strata properties, any by-law imposing a blanket ban on such installations purely for aesthetic reasons is no longer enforceable. Owners corporations should also review restrictions on balcony improvements or festive lighting, since these could be considered sustainability infrastructure when appearance is the sole basis for prohibition.

Minor Renovations & The Automatic Approval Timeline

A streamlined approval process for minor renovations took effect on 1 July 2025, creating a three-month timeline for every strata committee to make a decision. If a committee refuses a request, it must provide written reasons within that period. Conversely, failure to respond automatically approves the renovation.

To prevent unintended approvals, your strata scheme must:

• update its by-laws and internal procedures to align with this rule
• keep a record of all approved minor renovations for at least 10 years

Animal By-Laws & New Rules for Assistance Animals in Strata

Following key court decisions (including Cooper v The Owners – SP 58068 [2020] NSWCA 250) and legislative updates, by-laws that impose a blanket ban on keeping animals in a strata scheme are no longer enforceable. Following recent changes, the question of Can You Keep a Pet in the NSW Strata Scheme has been clarified, and schemes must permit them, although they may still implement reasonable rules to manage animal behaviour and communal areas.

Furthermore, changes effective from July 2025 have simplified the evidence process for assistance animals. A strata scheme can now request only one verifiable form of evidence to confirm an animal’s status. It is essential to review your pet by-laws to ensure they do not impose requirements that contradict these new, simplified rules.

Financial Hardship & Levy Payment Plan Mandates

Reforms commencing on 27 October 2025 introduce new obligations for strata schemes to assist owners experiencing financial hardship. Every levy notice must now include a Financial Hardship Information Statement directing owners to free financial counselling services.

Owners corporations are also required to fairly consider all requests for payment plans on overdue levies, a key aspect of strata levy recovery; blanket refusal policies are no longer permitted. Key requirements for handling these requests include:

• responding to a payment plan request within 28 days
• providing written reasons if a request is denied
• ensuring a refusal is only reasonable if the plan would leave the strata scheme without sufficient funds to meet its obligations
• not charging any fees for submitting or maintaining a payment plan

Reviewing High-Risk Areas for Outdated Strata By-Laws

Short-Term Rental Accommodation (STRA) & Occupancy Rules

Under a planning framework introduced in 2021, Section 137A of the Strata Schemes Management Act 2015 (NSW) provides a legal basis for regulating short-term rental accommodation. Accordingly, an owners corporation may adopt a by-law prohibiting short-term rental accommodation if the lot is not the owner’s principal place of residence.

Moreover, by-laws should:

• require guests using short-term letting arrangements to comply with all other scheme rules, such as those concerning noise and the use of common property
• establish a clear process for issuing a “Notice to Comply” when guests breach these by-laws

Noise Nuisance & Common Property Usage Rules

General by-laws are often too broad to effectively address how to deal with noise problems in a strata building. Therefore, it is better to have clear, detailed rules for high-friction activities, particularly during holiday periods.

Effective by-laws should address several key areas:

• Social Gatherings: Define quiet hours (especially evenings and weekends) and clarify that noise must not be audible within a habitable room of a neighbouring lot after a certain time.
• E-Devices: Regulate the charging and storage of e-bikes and e-scooters to mitigate the significant fire risk posed by lithium-ion batteries. For example, require certified chargers and prohibit charging in common area hallways.
• Shared Facilities: Specify operating hours for pools and gyms; enforce safety measures such as no glass near the pool; and regulate BBQ use on balconies due to smoke and fire concerns.

Parking Management & Uncollected Goods on Strata Property

Parking frequently generates strata disputes, so by-laws must be unambiguous. Your rules should:

• distinguish between resident, visitor and emergency vehicle spaces
• outline a formal agreement with the local council that permits rangers to issue enforceable fines for illegal parking, since owners corporations cannot impose fines directly

Furthermore, recent legislative updates have expanded an owners corporation’s powers to deal with abandoned goods. Under the Uncollected Goods Act 1995 (NSW), schemes may now remove items left on common property or within a lot, provided they reasonably believe those goods have been abandoned and obtain the owner’s consent.

Invalid Rules on Cost Recovery & Access Devices

The NSW Civil & Administrative Tribunal (NCAT) has consistently invalidated by-laws that are deemed “harsh, unconscionable, or oppressive.” Two high-risk areas involve attempts to recover all costs from an owner and to control access to their property.

For example:

• In Nikitopoulos v The Owners – Strata Plan No 52311 [2023] NSWCATCD 83, the Tribunal struck down a special by-law that sought to recoup all legal and administrative costs from a single lot owner.
• Similarly, in The Owners – SP No 91684 v Liu [2022] NSWCATAP 1, a by-law giving the owners corporation the power to deactivate a lot owner’s access devices for by-law breaches was found to be invalid because it exceeded the powers granted under the Strata Schemes Management Act.

Understanding the Legal Standard for Your Strata By-Law Review

Applying the “Harsh, Unconscionable or Oppressive” Test

The central legal benchmark for any strata by-law in NSW is found in section 139(1) of the Strata Schemes Management Act 2015 (NSW). This provision states that a by-law must not be “harsh, unconscionable, or oppressive.” If the NSW Civil & Administrative Tribunal (NCAT) determines that a by-law fails this test, it can be invalidated and declared unenforceable.

This standard requires that by-laws are fair and equitable, avoiding rules that place an unreasonable burden on lot owners. A by-law may be considered harsh, unconscionable, or oppressive if it:

• Disproportionately targets specific individuals
• Is excessively restrictive without a clear justification for protecting the use and enjoyment of other lots or common property

Learning from Recent NCAT Rulings on Invalid By-Laws

Recent decisions from the NCAT provide clear examples of how this legal test is applied in practice, showing where owners corporations have overstepped their authority. These rulings highlight the importance of drafting by-laws that are reasonable and directly related to the management of the strata scheme.

Several types of by-laws have been struck down for failing this test, including:

• Unlawful Cost Recovery: In Nikitopoulos v The Owners – Strata Plan No 52311 [2023] NSWCATCD 83, a special by-law designed to recoup all legal and administrative costs from a single lot owner was found to be harsh, unconscionable, and oppressive.
• Excessive Powers: A by-law that granted an owners corporation the power to deactivate a lot owner’s access devices for by-law breaches was invalidated in The Owners – SP No 91684 v Liu [2022] NSWCATAP 1, as it exceeded the powers granted under the Strata Schemes Management Act 2015 (NSW).
• Blanket Bans: The Tribunal has invalidated by-laws that impose complete prohibitions on reasonable activities. For instance, in Franklin v The Owners—Strata Plan No. 87497 [2022] NSWCATCD 210, a by-law that completely banned cooking within a residential unit was deemed disproportionate and invalid.
• Restrictive Flooring Rules: In Ghabour v The Owners – Strata Plan No. 53284 [2019] NSWCATCD 18, a by-law mandating the exclusive use of carpet was overturned. The NCAT found it was harsh and oppressive because it lacked flexibility and failed to accommodate minor renovations that are otherwise permissible.

How to Formally Update & Register Your Strata By-Laws

The Process for Drafting & Passing Compliant By-Laws

To formally change your strata by-laws, the process begins with careful strata by-law drafting to ensure the new rules are clear, fair, and legally compliant. The language used must be unambiguous to avoid misinterpretation and future disputes within the strata scheme.

Once a new or amended by-law is drafted, it must be approved by the owners corporation. This is achieved by passing a special resolution at a properly convened general meeting.

When a special resolution is passed to alter common property, it must also explicitly state:

• Who will be responsible for the ongoing maintenance
• Who will be responsible for the repair and replacement of that property

Registering Your Updated By-Laws with NSW Land Registry Services

After a special resolution has been passed, the final and most critical step is to register the updated by-laws with NSW Land Registry Services (LRS). This action formally consolidates the changes and makes the new rules legally valid and enforceable.

Failure to register the by-laws means they have no legal effect, even if they were correctly passed by the owners corporation. Therefore, timely registration is essential for ensuring the governance of your strata scheme remains compliant and effective.

Conclusion

A proactive by-law health check in 2026 is essential for legal compliance, requiring strata schemes to align their rules with recent reforms on sustainability, renovations, pets, and financial hardship. To remain enforceable, by-laws must also navigate high-risk areas like short-term letting and noise nuisance while adhering to the legal standard of not being harsh, unconscionable, or oppressive.

To ensure your strata scheme is protected from disputes and costly legal challenges, contact PBL Law Group’s strata by-law lawyers for a comprehensive review of your by-laws. Our specialised strata lawyers provide the trusted expertise needed to navigate these complex changes and ensure your by-laws are clear, fair, and legally robust.

Frequently Asked Questions