NSW Strata and Building Laws Undergo Major Overhaul: What Owners and Developers Need to Know

New South Wales is implementing significant reforms to its strata and building legislation, aiming to enhance trust and confidence in the sector. These changes, rolled out in stages, introduce new obligations for owners corporations, building managers, and developers, while also strengthening regulatory powers and extending limitation periods for certain claims.

• Enhanced Owner Protections: New measures require owners corporations to offer payment plans for overdue levies and provide financial hardship information. Building managers face stricter duties and disclosure requirements.
• Strengthened Regulatory Powers: NSW Fair Trading gains enhanced powers to issue compliance notices and enter enforceable undertakings for common property maintenance failures.
• Developer Accountability: Increased accountability for developers includes mandatory handover documents and strengthened developer obligations for new strata schemes.
• Extended Limitation Periods: The time frame for owners to bring claims against owners corporations for failure to repair common property has been extended.
• Ongoing Reforms: Further changes are anticipated in 2026, focusing on long-term planning and mandatory training for strata committee members.

The Strata Schemes Legislation Amendment Act 2025 is being implemented in phases, with the latest stage commencing on 27 October 2025. Key changes include requiring owners corporations to offer payment plans to owners falling behind on strata levies before initiating debt recovery. Owners will also receive a Financial Hardship Information Statement with each levy notice. Building managers are now obligated to act in their clients’ best interests, with penalties for non-compliance and mandatory disclosure of conflicts of interest. NSW Fair Trading’s powers have been broadened to issue compliance notices and enforce undertakings for failures in common property repair and maintenance, offering an alternative to costly owner litigation.

Future changes scheduled for 2026 will focus on increasing long-term planning requirements for owners corporations, enhancing developer accountability through mandatory handover documents like initial maintenance schedules, and introducing mandatory training for strata committee members. Exclusive supply networks (embedded networks) will also need to be disclosed in off-the-plan contracts.

Recent amendments to building legislation include the Building, Development and Strata Legislation Amendment Regulation 2024. This regulation extends the period for professional indemnity insurance exclusions related to non-compliant cladding by another year, allowing the market more time to adapt. It also defers the commencement of the building bond requirement for developers from July 2024 to November 2024, a move welcomed by developers facing challenging market conditions.

Proposed changes under the Better Regulation Legislation Amendment (Miscellaneous) Bill 2024 aim to restrict rights under the Building and Construction Industry Security of Payment Act 1999 if construction contracts do not comply with Home Building Act requirements or lack necessary insurance. This ensures that powerful payment rights are only available for lawfully conducted building work.

These reforms are designed to foster greater trust and confidence within the strata sector, which plays a crucial role in NSW’s property market, particularly in affordable housing. Owners can expect more robust protections and clearer avenues for recourse. Developers will face increased scrutiny and accountability, especially concerning initial maintenance and handover processes. The extended limitation periods for common property repair claims also mean owners corporations need to be more diligent in their maintenance and record-keeping.

Recent court cases highlight ongoing issues in building and strata law. Cases such as Kapila v Monument Building Group Pty Ltd and The Owners – Strata Plan No 84674 v Pafburn Pty Ltd delve into statutory warranties, duty of care, and apportionability of damages under the Design and Building Practitioners Act 2020. Other cases address issues like the adequacy of reasons in appeals, contractual disputes, and the interpretation of statutory warranties under the Home Building Act 1989. The Strata Schemes Management Act 2015 continues to be a focal point in cases concerning common property maintenance and owner disputes, as seen in Saad v The Owners – Strata Plan No 75928 and The Owners – Strata Plan No 63517 v Titles Strata Management Pty Ltd.

Several legislative instruments have been recently published or amended, including the Strata Schemes Legislation Amendment (Commencement) Regulation 2025 and various Environmental Planning Instruments. These updates reflect the ongoing efforts to regulate and reform the building and strata sectors in NSW.

• Residential Focus: Latest stage of strata amendments drop, Holding Redlich.
• Residential Focus: Another pass at reforming the Strata Schemes Legislation, Holding Redlich.
• Residential Focus: Recent and proposed changes to NSW building legislation, Holding Redlich.