Introduction

As of 1 July 2025, significant NSW strata law reforms have been introduced, aiming to enhance transparency and accountability in the management of strata schemes. These new laws bring key changes that impact owners corporations, strata committees, and property owners by establishing more stringent governance and reporting requirements.

A major focus of these strata reforms is the introduction of stricter reporting obligations for strata managers. This guide provides a detailed overview of these new reporting duties, helping strata committees and owners understand what information they are entitled to receive and how to ensure their manager is compliant with the new laws.

Understanding the New 6-Monthly Reporting Obligation for Strata Managers

The Legislative Basis for 6-Monthly Reports

As part of the recent NSW strata law reforms, a significant change has been introduced to enhance transparency. The Strata Schemes Management Act 2015 has been amended, specifically under Schedule 1, Item [14], which alters Section 55(2).

This reform mandates that a strata managing agent must provide the owners corporation with a copy of their records every six months. This increases the reporting frequency from the previous annual requirement, ensuring the strata committee is kept more regularly informed.

What Your Strata Manager’s Report Must Include

Under the new strata laws, the 6-monthly report must provide a comprehensive record of the functions and actions the strata manager has performed on behalf of the owners corporation. This ensures that all duties carried out under their contract are clearly documented.

The report should detail a range of activities, including:

Activity Category	Required Report Details
Meeting & Administrative Tasks	Includes actions related to organising and running meetings, preparing agendas, distributing minutes, and enabling the inspection of strata records.
Financial Management	Must account for all money paid into and out of the administrative and capital works funds, particularly for repair and maintenance, and confirm the sending of levy notices, which is a key area of concern when it comes to addressing high strata levies.
Insurance & Compliance	Involves reporting on the process of obtaining and renewing insurance policies, making any insurance claims, and issuing notices to comply with by-laws.

The increased reporting frequency helps maintain transparency and keeps all owners better informed about the management of their strata scheme throughout the year.

Broader Disclosure Obligations & Increased Transparency Under the New Strata Law

Disclosures Required Before a Strata Manager’s Appointment

The NSW strata law reforms enhance transparency by requiring prospective strata managers to disclose important information before an owners corporation appoints them. This ensures the strata committee and owners can make a fully informed decision.

Under these new laws, a strata manager must disclose the following:

• Any connection they have with the original developer of the building
• Whether they have provided advice about the strata or community land plan to the developer within the last two years
• Any direct or indirect financial interest they hold in the strata scheme
• Detailed information about their connections with suppliers they regularly use, including the nature of these relationships (for example, revealing if an insurance company is a subsidiary of the strata management company)

Ongoing Disclosures During the Management Period

The new strata laws also establish several ongoing disclosure requirements that a strata manager must follow throughout their appointment. At each Annual General Meeting (AGM), the strata manager must report on:

• Any third-party commissions or training services they received in the previous 12 months
• Those they expect to receive in the next 12 months
• Any connections with suppliers or the original owner

Furthermore, if a strata manager becomes aware of a new connection or financial interest during their contract, they must inform the owners corporation in writing as soon as possible. This could happen if they acquire a property in the scheme or become connected to a supplier the scheme uses.

Before entering into a contract on behalf of the owners corporation that involves a commission or a connected supplier, the agent must provide written notice explaining why the contract is in the owners’ best interests.

Transparency in Insurance Policies & Quotes

To improve clarity around one of a strata scheme’s most significant expenses, the reforms mandate greater transparency in insurance matters. Strata managers are now required to provide itemised quotes for any insurance policies they present to the owners corporation.

These quotes must clearly set out several key details, including:

• The base premium amount for the insurance policy
• The value of any commission the strata manager will receive
• The amount of any broker fees and who will be paid
• The total Goods and Services Tax (GST) applicable

Additionally, the new laws prohibit strata managers from receiving a commission on an insurance policy if the owners corporation obtained the quote and arranged for its payment independently.

Consequences of Non-Disclosure & Breaching Obligations

Penalties for Failing to Disclose Information

The new NSW strata law reforms introduce significant consequences for strata managers who fail to meet their disclosure obligations. These measures are designed to ensure transparency and hold managing agents accountable for their conduct.

A failure to provide the required disclosures can lead to substantial penalties, including:

• Court-imposed fines of up to $55,000 for not disclosing connections with the developer or financial interests in the scheme before appointment
• Similar penalties for failing to disclose commissions or training services received during the management period at the Annual General Meeting (AGM)

Beyond financial penalties, there are additional consequences. If a managing agent does not properly disclose commissions, an owners corporation or NSW Fair Trading can apply to the NSW Civil and Administrative Tribunal. The Tribunal has the authority to order that any improperly accepted commissions be paid back to the owners corporation.

How the Tribunal Can Address Breaches by a Strata Manager

When a strata manager breaches their obligations, the owners corporation can seek intervention from the NSW Civil and Administrative Tribunal (NCAT). The Tribunal possesses broad powers to address misconduct and resolve strata disputes related to strata management agreements.

An owners corporation can apply to the Tribunal for various remedial orders, including:

• Terminating the strata management agreement entirely
• Varying a term or condition of the agreement
• Requiring a party to the agreement to take, or not take, a specific action
• Ordering the payment of compensation to the owners corporation

Reflecting the key changes in the strata law reforms, the Strata Schemes Management Act 2015 has been amended to broaden the Tribunal’s powers. Under section 72(3)(g), the Tribunal can now terminate an agreement if it finds that the strata manager is engaged in unlawful business practices while supplying services to the owners corporation.

Conclusion

The NSW strata law reforms, effective from 1 July 2025, introduce key changes focused on greater transparency and accountability for strata managers. These significant reforms include:

• New 6-monthly reporting requirements that provide regular updates on management activities
• Stricter disclosure obligations that ensure all relevant information is properly shared
• Clear consequences for non-disclosure, giving teeth to the new requirements

These measures collectively empower both the strata committee and owners corporation to ensure compliance with the updated regulations.

Following these strata law changes is crucial for the effective management of your scheme. For trusted expertise and guidance on the new NSW strata laws, contact the specialised strata law firm in Sydney & NSW, PBL Law Group, to ensure your strata committee is fully compliant and protected.

Frequently Asked Questions