Explained: All Changes to Strata Laws Introduced under the Strata Legislation Amendment Act 2023 (NSW)

Introduction

On December 11, 2023, the Strata Legislation Amendment Act 2023 (NSW) introduced significant changes to strata laws in New South Wales. Stemming from extensive public consultation and a 2021 statutory review, these reforms were designed to address long-standing issues and improve the overall experience of strata living by creating a fairer and more transparent system.

These amendments have had a considerable impact on the governance, financial management, and day-to-day operations of strata schemes. Therefore, it is essential for property owners, tenants, and strata committees to understand their updated rights and responsibilities. This guide offers a detailed explanation of these key legal changes in 2023 and what they mean for those living and working in a strata community.

Interactive Tool: Check Your Strata Scheme’s Compliance with 2023 NSW Law Reforms

Enhanced Strata Committee Governance & Accountability

Streamlined Removal & Re-election Rules for Strata Committee Members

The 2023 reforms simplified the process for removal and strengthened accountability in two key ways under the Strata Schemes Management Act 2015 (NSW):

• Removal now requires only an ordinary resolution (majority vote) instead of a special resolution (75% approval).
• Any member voted off a strata committee is ineligible for re-appointment or re-election for 12 months, commencing from the date the removal resolution was passed.

Together, these changes make it more straightforward for an owners corporation to hold its committee accountable and clarify how to remove strata committee members.

New Strata Committee Appointment Flexibility

The amendments provided owners corporations with greater operational flexibility in appointing their strata committees. While elections at the Annual General Meeting (AGM) remain mandatory, they are no longer the only opportunity.

Under the Strata Schemes Management Act 2015 (NSW), a strata committee can now be elected at:

• The AGM, as before.
• Any other general meeting convened specifically for that purpose.

This allows a strata scheme to fill vacancies or appoint a new committee as needed throughout the year, rather than waiting for the next AGM.

Key Financial Management & Strata Record-Keeping Updates

Mandatory Quotes for Major Strata Works

A significant change was the extension of the requirement to obtain multiple quotes for major works. Previously, only large strata schemes of 100 lots or more had to secure at least two quotes for projects exceeding $30,000. Under the amended section 102 of the Strata Schemes Management Act 2015 (NSW), this rule now applies to all strata schemes, regardless of their size.

This reform ensures greater financial diligence and competitive pricing for all owners corporations. The legislation specifies that:

• The two quotes must be obtained from independent, unrelated entities to prevent conflicts of interest.
• If a strata scheme is unable to obtain two quotes, it must be noted on the agenda of the next general meeting with an explanation.

Increased Flexibility for Transferring Strata Funds

The reforms introduced more discretion for owners corporations when transferring money between their administrative and capital works funds. Before these changes, if funds were used for an expense that should have been paid from the other fund, the amount had to be reimbursed within three months.

As per the amended section 76 of the Strata Schemes Management Act 2015 (NSW), the owners corporation now has the flexibility to decide if a reimbursement is necessary. This decision must be made by a resolution at a general meeting within three months of the transfer, determining whether:

• All of the money should be repaid to the original fund,
• Part of the money should be repaid, or
• None of the money should be repaid.

Faster Levies for Emergency Strata Repairs

To help strata schemes respond more quickly to urgent situations, the notice period for special levies related to emergency repairs was shortened. The previous requirement mandated a 30-day notice period before such a levy was due.

The amendment to section 83(3A) of the Strata Schemes Management Act 2015 (NSW) reduces this minimum notice period to 14 days. This change applies specifically to levies needed for urgent works that are necessary to address a serious and imminent threat to the health or safety of residents in the strata scheme.

The Shift to Electronic Strata Record Keeping

A key modernisation effort was the mandate for owners corporations to maintain certain records in an electronic format. This reform, outlined in the amended section 176 of the Strata Schemes Management Act 2015 (NSW), aims to simplify record-keeping and improve access to important information.

Strata schemes were given a transitional period to adopt this change. The requirement to keep specified records, including the strata roll, in digital form came into effect on June 11, 2024, which was six months after the amending legislation commenced.

Major Reforms to the Strata Renewal Process

Extended Tenure for Strata Renewal Committees

The operational period for a strata renewal committee was extended to provide more stability and time to develop a comprehensive renewal plan. Under the reforms introduced by amending section 166 of the Strata Schemes Development Act 2015 (NSW), the default tenure for these committees was increased from one year to two years.

This change acknowledges the complexity and length of time often required to prepare and negotiate a collective sale or redevelopment. Moreover, an owners corporation can still pass a special resolution to extend the committee’s term beyond this new two-year default period if necessary.

Stricter Conflict of Interest Disclosures for Your Strata Renewal

To enhance transparency and fairness in the strata renewal process, strict new disclosure requirements for conflicts of interest were introduced. Now, any owner or committee member with a “relevant interest” in a renewal proposal must disclose it at key decision-making points. A relevant interest is defined as a direct or indirect financial or other interest in the proposed sale or redevelopment.

Under the amendments to the Strata Schemes Development Act 2015 (NSW), these disclosures are required at several stages:

• Before election: A person nominated for a strata renewal committee must disclose any potential conflicts before the election is held.
• During committee meetings: Members of the strata committee must disclose any relevant interests when considering a renewal proposal.
• At general meetings: Lot owners must disclose their interests when the owners corporation meets to consider a renewal proposal or plan.

If a conflict is disclosed, the owners corporation must consider its nature and decide whether to place restrictions on the individual’s involvement in deliberations and decisions related to the renewal.

The Land & Environment Court’s Expanded Powers in Strata Renewals

The Land and Environment Court was granted expanded powers to oversee the strata renewal process, ensuring proceedings are fair and efficient. It can now consider any conflicts of interest when reviewing a renewal application or an objection to a plan.

Furthermore, the court’s new authority regarding procedural matters and costs includes:

• Power to award costs against dissenting owners who act unreasonably or not in good faith, helping prevent obstruction of the process.
• Approval of a renewal plan despite minor procedural defects or irregularities, provided they did not cause substantial injustice.

Improving Livability in NSW Strata Schemes

Making Strata Living More Pet-Friendly

The 2023 reforms made strata living more accessible for pet owners by removing financial barriers, helping to clarify whether can you keep a pet in a NSW strata scheme. Under the new section 105A of the Strata Schemes Management Act 2015 (NSW), an owners corporation is now explicitly prohibited from:

• Requiring a resident to pay a fee or a bond as a condition for keeping a pet.
• Requiring a resident to obtain a specific type of insurance policy just for their pet.

These changes ensure that owning a pet in a strata scheme is not subject to unreasonable financial conditions.

Strengthening Protections for Assistance Animals in Strata

Enhanced protections were introduced to ensure residents who rely on assistance animals are not unfairly restricted. A new provision, section 139A of the Strata Schemes Management Act 2015 (NSW), clarifies that a by-law has no force or effect if it:

• Prohibits the use of an assistance animal on a lot or common property.
• Unreasonably burdens the use of an assistance animal on a lot or common property.

While an owners corporation cannot deny an assistance animal, it can request evidence to verify the animal’s status. However, the types of proof that can be requested are strictly limited to protect the resident’s privacy and include:

• Evidence that the animal holds an accreditation under a State or Territory law.
• A statutory declaration confirming the animal has been trained to assist a person with a disability and maintains appropriate standards of hygiene and behaviour for a public place.

Importantly, an owners corporation is not permitted to ask for a resident’s private medical records as part of this verification process.

Clarifying Rights & Responsibilities for Tenants & Landlords in Strata

To improve transparency for tenants, the reforms established new obligations for landlords and their agents. Under the amended section 186 of the Strata Schemes Management Act 2015 (NSW), a landlord or their agent must:

• Provide a tenant with a copy of the current by-laws within 14 days of the tenant becoming entitled to possession of the lot.
• Notify the owners corporation of a new tenancy.

The amendments to section 258 of the Strata Schemes Management Act 2015 (NSW) introduced a significant change: if the landlord or agent fails to provide this notice, the tenant is now empowered to give notice of the lease to the owners corporation themselves.

Changes to Strata Meetings & Voting

Extended Notice Periods for Annual General Meetings

To improve owner participation, the 2023 reforms extended the minimum notice period for Annual General Meetings (AGMs). Under the amended Schedule 1, clause 7(3) of the Strata Schemes Management Act 2015 (NSW), owners must now receive notice at least 14 days before an AGM, which is an increase from the previous seven-day requirement.

This change provides owners with several benefits:

• More time to review the agenda and any accompanying documents
• Greater opportunity for informed preparation

As a result, the extension facilitates greater engagement in the decision-making processes of the strata scheme.

New Voting Rules for Two-Lot Strata Schemes

The reforms introduced specific changes to voting and by-law enforcement for two-lot strata schemes to make procedures more practical. One key amendment relates to the value of a vote cast by an original owner, which is typically reduced until a certain portion of the lots are sold.

As per the amended section 5(2A) of the Strata Schemes Management Act 2015 (NSW):

• The reduction in vote value now only applies to strata schemes with more than two lots.
• The need for an owners corporation in a two-lot scheme to pass a resolution before issuing a Notice to Comply for a by-law breach was removed, streamlining the enforcement process.

Conclusion

The Strata Legislation Amendment Act 2023 (NSW) introduced a suite of significant reforms that have reshaped the landscape of strata living in New South Wales. These changes were designed to create a fairer and more transparent system by enhancing committee governance, updating financial management protocols, and improving the overall livability for residents.

If you require guidance on how these legislative changes affect your strata scheme, contact our expert strata lawyers at https://pbl.legal/strata-law/PBL Law Group for a consultation. Our specialised strata law firm in Sydney is dedicated to providing trusted legal advice for owners corporations to help navigate the complexities of NSW strata law and ensure your scheme remains compliant.

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