The NSW Parliament has introduced a third wave of strata and community land reforms, aimed at strengthening governance, improving transparency and lifting confidence in the sector. With more Australians living in strata schemes and increasing pressure to address housing supply and affordability, the changes represent a major regulatory shift.

The reforms respond to recommendations from the 2021 review of the Strata Schemes Development Act 2015 (NSW) and the Strata Schemes Management Act 2015 (NSW), while also addressing commission practices in strata insurance.

Key changes are contained in the Strata Legislation Amendment Act 2023, the Strata Schemes Legislation Amendment Bill 2025 and the Strata Managing Agents Legislation Amendment Act 2024.

The changes affect all stages of strata and community land schemes – from cradle to grave. Whether you are a utility or insurance provider, strata managing agent, building manager, vendor, owner, developer, or part of an owners corporation or community land association, it is essential for all stakeholders to understand how the current and upcoming changes will affect your operations to ensure compliance.

Reforms already in force

The 2023 reforms introduced flexibility to the strata renewal process, allowing the Land and Environment Court to approve schemes despite procedural defects, provided they don’t cause substantial injustice. These changes address past delays caused by dissenting owners with conflicts of interest.

Voting rules have also been adjusted. For schemes with only two lots, the original owner’s vote is no longer reduced by two-thirds – a change relevant to smaller commercial strata assets.

New restrictions on company nominees and powers of attorney aim to curb proxy farming. This measure has proved impractical in some larger schemes and will be eased under the upcoming reforms.

Strata committee members can now be nominated and appointed at extraordinary general meetings, not just annual general meetings – allowing greater flexibility to replace outgoing members.

Upcoming 2025 reforms

The 2025 reforms, passed in February but yet to commence, introduce further obligations for developers and strata stakeholders.

Developers must hold the first AGM within two months of the initial period and provide prescribed documents, including a certified initial maintenance schedule. Fines of up to 500 penalty units may apply for non-compliance.

The initial maintenance schedule must be prepared using a prescribed form and certified by a qualified, independent quantity surveyor. These requirements will impact the planning and documentation processes of new multi-storey strata schemes.

Disclosure of embedded networks is another key change. Developers must state whether a project includes, or is likely to include, embedded utility networks. Failure to do so can give purchasers the right to rescind a contract. Section 184 certificates must also confirm whether embedded networks are in place and disclose relevant terms.

Strata and community schemes must now consider sustainability annually, and appearance-based objections to the installation of sustainable infrastructure will no longer be permitted, except in heritage-listed properties. This opens the door for more widespread solar, water-saving and energy-efficient installations.

Accessibility infrastructure will require only a simple majority to approve – down from the previous 75 per cent threshold – increasing the feasibility of upgrades such as ramps, lifts and accessible entries.

Committee members will have new duties to act honestly, fairly and in the best interests of the scheme. Training will be mandatory, and members who fail to complete it may be removed.

Tighter rules for agents and managers

Since 3 February 2025, strata managing agents have been subject to stronger disclosure requirements under the Managing Agents Act, including:

• providing at least three insurance quotes
• disclosing all commissions and supplier relationships
•  detailing how each arrangement benefits the owners corporation
• reporting every six months on delegated functions.

Similar obligations will soon apply to building and facilities managers, and the tribunal will have new powers to terminate management agreements where misconduct or unlawful conduct is proven.

What this means for commercial property stakeholders

The reforms require developers to formalise disclosures, strata managers to adopt more transparent practices, and service providers to justify their relationships with agents. Those involved in off-the-plan sales, ongoing strata management or supply contracts must adapt quickly to stay compliant and competitive as the changes take effect.