Introduction
On 1 July 2025, significant strata reforms came into effect, introducing key changes to NSW strata law. These reforms, implemented under the Strata Schemes Legislation Amendment Act 2025 (NSW) as part of a staged rollout, are designed to improve the governance, transparency, and accountability of strata schemes across the state.
The changes to strata affect everyone involved in community living, including owners corporations, committee members, strata managers, and developers. This guide to the 2025 strata law changes provides a comprehensive overview of the new requirements, helping all stakeholders understand their updated rights and obligations to ensure compliance with the NSW strata law reforms.
Key Changes for Owners Corporations & Committees from 1 July 2025
New Duties for Strata Committee Members & Chairpersons
As part of the NSW strata law reforms from 1 July 2025, new statutory duties have been introduced for strata committee members and chairpersons to improve governance. These changes clarify the standards of conduct expected from those in leadership roles within a strata scheme.
Strata committee members are now required to:
- Act with honesty and fairness, and with due care and diligence, when carrying out their functions
- Comply with their obligations under all relevant strata and community land scheme laws
- Avoid behaving in a way that would unreasonably affect another person’s use and enjoyment of their lot or the common property
- Use or disclose information obtained as a committee member only as permitted by law or as required to perform their duties
Additionally, chairpersons have new responsibilities focused on meeting effectiveness. Their duties now include following the meeting agenda, maintaining order, and encouraging fair, open, and constructive discussion among owners on all agenda items.
Stronger Repair & Maintenance Obligations
The reforms from 1 July 2025 introduce stronger obligations for owners corporations regarding the repair and maintenance of common property. A key change is that an owners corporation cannot delay necessary repairs if the damage affects a person’s access, use, or safety, even if it is pursuing legal action against the person who caused the damage.
Other significant changes to repair and maintenance obligations include:
| Area of Obligation | Details of the New Requirement |
|---|---|
| Extended Claim Period | Lot owners now have six years, an increase from the previous two-year limit, to bring a damages claim against the owners corporation for a breach of its duty to maintain and repair common property under section 106 of the Strata Schemes Management Act 2015 (NSW). |
| Maintenance Responsibility | When an owners corporation passes a special resolution to alter common property, the motion must now explicitly state whether the owners corporation or a specific lot owner will be responsible for the ongoing maintenance of that alteration. |
| Initial Maintenance Schedule | In preparing the first 10-year capital works fund plan, the owners corporation is now required to consider the initial maintenance schedule provided by the developer at the first Annual General Meeting (AGM). |
Banning Unfair Contract Terms in Service Agreements
To protect owners corporations from disadvantageous agreements, the NSW strata law now bans unfair terms in standard form contracts for the supply of goods or services. This change applies to any new contracts entered into, or existing contracts renewed or varied, on or after 1 July 2025. These protections cover a range of agreements, including strata building management agreements, as well as contracts with cleaners and gardeners.
A contract term may be considered unfair if it:
- Causes a significant imbalance in the rights and obligations of the parties
- Is not reasonably necessary to protect the interests of the party who benefits from it
- Would cause financial or other harm to a party if it were applied
Examples of potentially unfair terms include clauses that permit one party, but not the other, to terminate the contract, or that penalise one party for a breach without a corresponding penalty for the other.
Mandatory Sustainability Considerations for Your Scheme
The 2025 strata law changes place a new emphasis on environmental sustainability within strata schemes. Owners corporations are now required to include sustainability as a standing item on the agenda for every AGM. This discussion must cover the scheme’s energy and water consumption and expenditure for the common property.
Furthermore, these key changes promote the adoption of sustainable infrastructure through several new rules:
| Rule Category | New Requirement |
|---|---|
| By-law Restrictions | By-laws that prohibit the installation of sustainability infrastructure (e.g., solar panels) based on their impact on the building’s external appearance are now banned, except for heritage-listed properties. |
| Capital Works Planning | When preparing annual estimates for the capital works fund, the owners corporation must now consider the costs associated with installing, repairing, or replacing sustainability infrastructure. |
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Enhanced Protections & New Processes for Strata Lot Owners
Streamlined Approvals for Minor Renovations & Accessibility Upgrades
The NSW strata law reforms from 1 July 2025 introduce a more efficient approval process for minor renovations. Under these new regulations:
- If a scheme’s by-laws permit the strata committee to approve renovation requests, the committee must provide a written refusal with reasons within three months.
- Should the committee fail to respond within this timeframe, the minor renovation is automatically approved.
- Owners corporations are now required to keep a record of all approved minor renovations for a period of 10 years.
Furthermore, these key changes make it easier to improve accessibility within strata schemes. To install accessibility infrastructure on common property, such as a ramp for a person with a disability, the approval threshold has been significantly lowered. Instead of requiring a special resolution, these upgrades can now be approved with a simple majority vote at an owners corporation meeting.
Simplified Evidence Requirements for Assistance Animals
The reforms simplify the process for residents who require an assistance animal. If requested by the owners corporation, a resident now only needs to provide one form of evidence to support their request. This change is part of the broader 2025 strata law changes designed to support residents with specific needs.
The expanded list of acceptable evidence includes:
| Type of Evidence | Description / Example |
|---|---|
| Official ID Card / Permit | An animal identity card, pass, or permit from a recognised assistance animal training organisation. |
| Proof of Training | Documentation showing the animal has completed a training program that meets the standards of Assistance Dogs International. |
| Government-Issued Pass | A pass or permit issued by a government body, such as a transport pass, that accepts the animal as an assistance animal. |
| Professional Statement | A written statement from a registered health practitioner confirming the animal’s status as an assistance animal. |
| Organisation Insignia | A badge, medallion, or vest supplied by a recognised assistance animal training organisation. |
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Greater Accountability for Strata Managers & Developers
New Reporting Obligations & Contract Rules for Strata Managers
As part of the NSW strata law reforms from 1 July 2025, strata managing agents must now report to the owners corporation every six months. These reports need to detail all work performed on behalf of the scheme, such as:
- Organising repairs
- Chairing meetings
- Other management activities
This new requirement significantly enhances transparency and accountability in strata management.
The reforms also introduce important new rules for strata management contracts to better protect owners corporations. For agreements entered into, renewed, or varied on or after 1 July 2025, certain terms are now prohibited, including those that:
- Require an owners corporation to pay for the agent’s professional indemnity insurance or liabilities
- Limit an agent’s liability to a specific amount, unless the agreement is covered by an approved professional standards scheme
Additionally, strata managing agents now have access to a new defence against prosecution for breaches of delegated duties. This defence can be used if the agent can establish that:
- The owners corporation caused the breach
- The agent took all reasonable steps to prevent the breach from occurring
Increased Penalties for Developer Non-Compliance
The reforms have significantly strengthened developer accountability by increasing penalties for those who fail to meet their obligations for new strata schemes. Developers now face much higher financial consequences if they don’t comply with key requirements.
The first AGM must be held within two months of the end of the initial period. Furthermore, all necessary documents must be provided to owners at least 14 days before this meeting takes place.
Developers who fail to meet these obligations may face severe penalties of up to $11,000, plus an additional daily penalty of $220 for each day the breach continues. These increased penalties reflect the importance of proper documentation and timely meetings in establishing well-functioning strata schemes.
A Look Ahead at Strata Law Changes Later in 2025
While many key changes to NSW strata law took effect from 1 July 2025, further reforms are scheduled to be rolled out later in the year. This next stage of the NSW strata law reforms will continue to build on the initial changes, introducing additional measures to improve governance, support owners, and increase accountability.
Enhanced Governance Requirements
One of the most significant upcoming changes is the introduction of mandatory training for strata committee members to ensure they understand their duties and responsibilities.
Building managers will also be subject to new conduct requirements, including a statutory duty to act in the best interests of the owners corporation.
Financial Hardship Support Measures
Further reforms will provide greater support for owners experiencing financial difficulties. These key changes include:
| Support Measure | Details of the Upcoming Change |
|---|---|
| New Levy Notice Information | Levy notices will be required to include information to help owners in financial hardship, such as the contact details for the National Debt Helpline. |
| Simplified Payment Plans | Strata committees will be permitted to enter into payment plans directly with owners, a decision that previously required owners corporation approval. Schemes must consider all such requests. |
| Extended Notice for Debt Recovery | The notice period before a strata scheme can initiate strata levy recovery action against an owner will be extended from 21 to 30 days. |
| Fairer Payment Allocation | Overdue payments made by an owner will first be applied to their outstanding strata levies before being allocated to interest and any associated debt recovery costs. |
Developer Accountability Improvements
Developer accountability for new strata schemes will also be strengthened later in 2025.
Developers will be required to have the initial maintenance schedule and initial levy estimates independently certified to provide new owners with more accurate financial planning. Additionally, the sale contract for a strata property will need to disclose specific information about any embedded networks.
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Conclusion
The NSW strata law reforms from 1 July 2025 have introduced significant key changes, reshaping governance for owners corporations, enhancing protections for lot owners, and increasing accountability for strata managers and developers. Understanding these new rights and obligations is essential for all stakeholders to ensure compliance and navigate the updated legal landscape effectively.
As the strata landscape continues to evolve, securing expert legal guidance is crucial for adapting to these reforms. To ensure your strata scheme is fully compliant with the new NSW strata laws, contact the experienced strata lawyers at PBL Law Group for specialised advice tailored to your specific needs.
