Strata Schemes Legislation Amendment (Miscellaneous) Bill 2025 — Round 4 Proposed Changes

The Bill was introduced to NSW Parliament on 19 November 2025 but has not yet passed. If enacted, it would represent the latest proposed step in NSW Government's ongoing reform of existing strata legislation. The Bill proposes a series of targeted amendments intended to clarify existing provisions, improve consumer protections and reduce unnecessary regulatory burden

We have outlined below some of the significant changes currently proposed:

2 lot strata schemes (which make up more than 30% of all strata schemes in NSW): The aim is to reduce the regulatory burden for these schemes and introduce a simpler decision-making process.

These schemes will be exempt from certain requirements, in particular requirements:

• to hold AGMs or other general meetings;
• to form a strata committee;
• to prepare 10 year plans of anticipated major expenditure to be meet from the capital works fund at the first AGM of the scheme and for each following 10 year period;
• to give information to the Secretary of the Department of Fair Trading under certain regulations made;
• other prescribed requirements as may be determined.

This includes ancillary requirements in the strata management legislation in connection with the above exempted requirements.

Decisions will need to be made by way of resolution in writing, which becomes the record to be kept by the owners corporation for a two lot strata scheme, and written resolutions will be required to be retained for 7 years.

Term extensions of strata managing agency agreements: a strata manager can extend their term of appointment by a maximum of 3 months by written notice at least 1 month before expiry of the manager's term of appointment, but this extension cannot occur if the owners corporation gives the strata manager notice at least 2 months before expiry of the term that the strata manager will not be reappointed, or otherwise where the strata committee has already extended the managing agent's term by up to 3 months pending a decision to reappoint.

Commissions and training services to managing agents: details will need to be provided by managing agents to owners corporations, including details of the person who provided or paid for the commissions or training services to managing agents.

Building Manager agreements and appointment terms: Terms of appointment will now be similar to terms of appointment for strata managing agents. The maximum term of appointment of building managers will be reduced from 10 to 3 years.

If the building management agreement is entered into before the first AGM of the owners corporation, it will expire on the date of the first AGM, and if entered into by resolution at the first AGM of the owners corporation, it will expire at the end of the second AGM.

Regulations will be able to prescribe different terms of appointment depending on the specified class of building manager. It is envisaged thatletting rights businesses will be covered under different appointment terms.

NCAT will also be able to order termination of a building management agreement, if the building manager breaches prescribed duties.

Mandatory strata committee member training: to be delivered by approved training providers, with regulations to outline the approval process.. New section also deals with approval of training providers by the Secretary of Fair Trading. These details are not yet known and changes are anticipated to occur next year.

More matters that will be able to be included in Payment Plans for Contributions: These changes are intended to clarify that payment plans can cover both current and future contributions. If agreed by an owners corporation and an owner, a payment plan will also be able to include interest payable on overdue contributions, a contribution that has been levied but is not yet due and payable, or any other matters prescribed by the regulations.

Reminder Notices to owners for unpaid contributions and interest, and additional requirements before action can be taken to recover these amounts from an owner: Owners corporations will be required to give a reminder notice to an owner between 7 and 10 days after a contribution becomes due and payable. Reminder notices will need to include the mandated matters in proposed section 85A(2). The intent appears to be that recovery action is not to be taken against an owner until at least 30 days after the later of the reminder notice issuing and notice taken of the action. Regulations can also provide additional circumstances in which an owners corporation may not take actions to recover for these monies, and the requirements or conditions for taking such action.

Requirement for Reasonable Bonds or Fees: This is in addition to the ban on bonds or fees for the keeping of pets under section 105A, and proposed section 105AA can have wider application and impact, for example, bonds are commonly required by owners corporations as a condition on an owner undertaking renovations to a lot (some of these are standard requirements in global renovations by-laws for example). Any bonds or fees must be reasonable, having regard to the likely risk of damage to the common property arising from matters to which the bond relates. Specifics need to be provided with regards to circumstances in which the bond is to be released to the owner or occupier or claimed by the owners corporation (whole or part), and when the obligation is released must be within a specified time if not claimed. Fees charged for goods or services must be reasonable and not greater than the reasonable cost incurred by the owners corporation. The Regulations will be able to prescribe further bans on bonds or fees.

Changes to major work, further clarification on cosmetic work and minor work:

• Major Works: With regards to what now constitutes a major works, there is a small change proposed to common property reference in section 108 - the section 108 heading will refer to "property major work" and section 108(1) will clarify that such work to common property does not need to be in connection with the owner's lot. The regulations can now prescribe what will be a major work for the purposes of this section and can exclude work from the operation of this section (wait and see what these will be exactly).
• Cosmetic Works: Will no longer be defined by reference to sections 109(2) (an open-ended inclusive list) and (5) (saying that the section did not apply to certain work) of the Act - these provisions described what "cosmetic works" were and contained the provision which provided that certain works did not fall within that section 109. New section 109(6) will be inserted and will be a different test, namely "work involving attaching fixtures to, applying coverings to or decorating the surface of walls, floors or ceilings within an owner's lot", and also includes "work as prescribed by the regulations" and can include exclusions as per the regulations.
• Minor Renovations: Will now be known as "Minor Work" with a change in heading to section 110. Will no longer be defined by reference to section 110(3) (open ended inclusive list). The definition of what constitutes a minor work will now be set out in new section 110 (9) and will mean "work involving repair, replacement or alteration of an owner's lot that does not affect a building element or prescribed as minor work by the regulations, but does not include work excluded by the regulations.

It appears that this definition may require further clarification as it is unclear whether it includes changes to common property

Introduction of "building element" definition which has the same meaning as in the DBPA.

Global renovations by-laws will either need to be rewritten or amended as they have a lot of the former definitions that will be impacted by this bill as no longer being in existence when this becomes law. Also, by-laws for Minor Works and Major Works will need to be looked at so consistent with updated wording (What will be contained in the Regulations is as yet unknown). Worth noting if doing any by-law reviews.

Changes to Initial Maintenance Schedules: These will need to comply with the requirements set out in the Regulations. Penalties will be imposed for breaches.

Window Safety Devices: The Bill will clarify that window safety devices are an owners corporation's responsibility to maintain, in the same manner as its obligation to maintain and repair common property. An owner's right to install these devices do not appear to have changed , nor that owner's obligation to maintain and repair devices installed by them. Penalties wil be increased on owners corporations to ensure compliance with these amended provisions.

Standalone approval process for installation of Electric Vehicle Charging Station on an Owner's Lot: Proposed new section 132D will be introduced which will only require an owner to give the strata committee written notice (an installation notice) setting out the owner's intention to install a charging station and providing information or documents as required by the Regulations. A strata committee cannot unreasonably object and has to provide its approval or refusal within 3 months of the installation notice, with deemed consent if no action taken by the strata committee 3 months from the installation notice . This will operate as a standalone provision, and not be subject to Cosmetic Work, Minor Work or Major Works provision, under the Act or under any by-laws. An owner will be required to pay the costs of installation and indemnify the owners corporation in respect of such charging station installations.

The proposed section does not however deal with about who will ultimately be responsible for upgrading the electrical system or electrical load capacity of strata buildings to cope with the changes. This will likely be a matter for the owners corporation to deal with.

Embedded Networks and Exclusive Supply Agreements: New section 132AA is proposed to be introduced to deal with these kinds of agreements and will them void to the extent they require the owners corporation to pay money by way of covering capital costs (usually charged as exit and termination fees), or requiring it to purchase the infrastructure at the "end" of the agreement ("end" is defined). No removal of infrastructure will be permitted by the network provider without the owners corporation's written consent. This applies to all future agreements, and is subject to any exclusions in the regulations. It does not appear to apply to existing agreements which is of concern.

Alternatives to affixing common seal of owners corporation: The Bill will support alternative ways for owners corporations to execute documents other than by affixing its common seal. The Bill will enable regulations to require necessary records to be kept if an alternative to the common seal is used. These records are to be available for inspection as an appropriate control and for sake of probity and transparency.

Initial period restrictions: Penalties will be increased and imposed for non-compliances - this of particular relevance to owners corporations who are newly formed and they must ensure exclusive use by-laws are not passed during this period. Proposed new section 140(6) makes clear that action can be taken for damages at the same time as prosecution for an offence by the owners corporation of doing something it shouldn't during the initial period with regards to by-law changes.

Owners Corporation needs at least 2 quotes for proposed works exceeding $30,000.

Meeting procedures: Current Schedules 1 & 2 to SSMA which deal with meeting procedures will be moved to the Regulations for more flexibility. Updated procedures will be released once the Bill is passed, by such Regulations..

Fair Trading can publish compliance notices and undertakings: NSW Fair Trading may publish information about compliance notices and undertaking issued under the strata management legislation.

NCAT expanded powers: NCAT can order repayment of an unreasonable bond or fee, or a bond that the owners corporation failed to release in accordance with its terms. NCAT will now have power to order that any money payable by an owners corporation be paid from contributions only in relation to certain lots, instead of all lots. Formerly only a court could order this. This will be of interest to lot owners taking on an owners corporation for repair of common property. Changes proposed will also confirm NCAT's power to award damages for certain breaches of statutory duties with respect to initial period restrictions under section 26 and 140, as well as section106.

Real estate agents or lessors will be required to give the owners corporation notice of a tenant vacating a lot.

Strata Hub Fund: will be created to receive payments to Fair Trading relating to the maintenance of strata information on Strata Hub.

So many things will be shifted from the Strata Schemes Management Act 2015 into Regulations for increased flexibility.

For further information please contact:

Daniela Ter­ru­so, Senior Associate
Phone: + 61 2 9777 8342
Email: dxt@swaab.com.au

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.