Navigating the July 2025 NSW Strata Law Reforms: What You Need to Know

From 1 July 2025, significant reforms to New South Wales strata legislation will come into effect, impacting owners corporations, strata committees, developers, and strata managing agents. These changes aim to enhance transparency, sustainability, and governance within strata and community schemes across the state.

Key Reforms Effective 1 July 2025:

1. Sustainability Initiatives
By-laws that prohibit the installation of sustainability infrastructure, such as solar panels or electric vehicle charging stations, based solely on aesthetic grounds will be invalid, except for heritage-listed properties. Additionally, environmental sustainability must be a standing item on the agenda at each Annual General Meeting (AGM), with owners corporations required to review common property energy and water consumption and expenditure. Capital works fund estimates must now include costs for sustainability infrastructure.

2. Protection Against Unfair Contract Terms
Unfair terms in standard form contracts for goods or services supplied to strata schemes, including strata management contracts, will be prohibited. This measure empowers owners corporations with greater negotiation power and control over their financial commitments, preventing them from being locked into disadvantageous agreements.

3. Enhanced Strata Management Accountability
Strata managing agents will face stricter requirements, including half-yearly reporting to the scheme on their functions, replacing the previous annual reporting. Certain terms in strata management contracts signed on or after 1 July 2025 will be prohibited. Building managers will also have a new statutory duty to act in the best interests of the owners corporation.

4. Developer Obligations
Developers will be required to have the initial maintenance schedule and initial levy estimates independently certified before the first AGM. This measure aims to provide new owners with more accurate and realistic financial projections, helping to prevent unexpectedly high levies post-purchase. Increased penalties for non-compliance are also in place.

5. Streamlined Minor Renovation Approvals
If a strata committee fails to provide written reasons for refusing a minor renovation request within three months, the renovation will be automatically approved. This applies to schemes with by-laws allowing the committee to decide on such requests.

6. Improved Repairs and Maintenance Enforcement
The reforms bolster the owners corporation’s duty to maintain and repair common property. NSW Fair Trading will be granted increased powers, including the ability to issue compliance notices and enter into enforceable undertakings, to ensure maintenance obligations are met. The timeframe for owners to claim damages for a scheme’s failure to maintain common property will be extended from two to six years.

7. Utility Contract Regulations
Agreements for the supply of electricity through embedded networks entered into on or after 1 July 2025 will be subject to a maximum term limit. New disclosure requirements will also apply for exclusive supply (embedded) networks, providing greater transparency for owners.

8. Support for Owners Facing Financial Hardship
Strata levy notices will now feature details to help owners access assistance, such as contact information for the National Debt Helpline. Strata committees will also be permitted to enter into payment plans with owners experiencing financial hardship, a decision that currently requires owners corporation approval.

9. Assistance Animal Provisions
The reforms aim to make it easier for owners to install accessibility infrastructure. This includes simplified approval processes and broader recognition of evidence for assistance animals.

10. Increased Record Inspection Fees
Fees for inspecting strata records will increase from $31 to $60 for the first hour, and from $16 to $30 for each subsequent half-hour. This change applies to prospective buyers of apartments, townhouses, and villas, while fees for current owners remain unchanged.

Preparing for Compliance

To ensure compliance with the new legislation, strata schemes should:

• Review and Update By-laws: Ensure by-laws align with the new sustainability and renovation provisions.
• Revise Contracts: Examine existing contracts for potential unfair terms and make necessary amendments.
• Enhance Record-Keeping: Implement systems to maintain electronic records securely for at least seven years.
• Educate Committee Members: Provide training on new duties and responsibilities under the reformed laws.
• Plan for AGMs: Incorporate sustainability considerations into AGM agendas and capital works planning.

For more detailed information on the reforms, refer to the NSW Government’s guide to the 2025 strata law changes.