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Reform of strata laws 

Comment on proposed strata regulation by 27 May 2016 

What is this about? 

To modernise strata laws, more than 90 law changes were passed by the NSW Parliament in 2015 and have not yet commenced. These laws will be administered by NSW Fair Trading with NSW Land and Property Information (LPI). For information on the changes, refer to our Major changes to strata laws page. 

NSW has more than 75,000 strata schemes worth $350 billion in assets. The reforms will affect some 2 million industry professionals, strata owners, and residents in strata-titled townhouses and units.

What's happening now? 

Fair Trading has now released the draft Strata Schemes Management Regulation 2016 (PDF size: 357kb) and LPI has released the draft Strata Schemes Development Regulation 2016 (PDF size: 259kb). These Regulations set out the detail for how the laws will operate.

To thoroughly consider the Regulations and questions about how they will work, refer also to the following documents:

This consultation closes on 27 May 2016. Please comment on any improvements needed to help the Regulations operate effectively. To find out how, refer to the Have your say section below. 

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Overview of the proposed changes 

Draft Strata Schemes Development Regulation 2016

This draft Regulation supports the Strata Schemes Development Act 2015, which has not yet commenced.

The Regulation sets standards for the preparation of strata plans. This includes the form and content of location plans, floor plans, administration sheets and schedules of unit entitlement.

New provisions added to the Regulation 

The draft Regulation provides necessary detail to support the new collective sale and renewal process, which was part of the law package passed last year. The Regulation includes:

  • the information that must be addressed in a strata renewal proposal
  • how a returning officer is to be appointed
  • how the market value of a building and its site is to be determined
  • the supporting documents that must be sent to owners with a strata renewal plan.

Changes of by-laws are to be lodged for registration as a consolidated version of the by-laws.

The proposed Regulation also defines the market valuation basis that a valuer must use to determine the unit entitlements and provides the date by which the valuation must be made.

LPI will administer this Regulation and the Act that it supports.   

Draft Strata Schemes Management Regulation 2016

This Regulation supports the Strata Schemes Management Act 2015. These laws will be administered by Fair Trading.

The Regulation includes details such as:

  • accountabilities to prevent financial mismanagement, and continued provisions allowing lot owners and prospective purchasers to inspect financial and other records
  • requirements to ensure that building assets are better maintained
  • the approval process for owners seeking to make changes to their lot
  • the use of electronic voting and communication methods to support more informed and inclusive strata communities.

For further information, you can also refer to the Draft Strata Schemes Management Regulation 2016 section below. 

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Have your say  

Read the Regulation/s and provide your comments. You can also refer to the information on this page for an overview of what's in the Regulations. The deadline for comment is 27 May 2016.

To lodge your written submission, email us at strataconsultation@finance.nsw.gov.au

Alternatively, you can post your comments on the draft Regulation/s to:

Draft Strata Regulations
Policy & Legislation
NSW Fair Trading
PO Box 972
PARRAMATTA NSW 2124

Please note that submissions will be published on the NSW Fair Trading website. If you do not want this, please indicate so clearly in your submission. However, be aware that the Government is required by law to release this information in certain circumstances.

For general enquiries about the strata reforms, please call 13 32 20 or lodge an enquiry. You can also refer to our Frequently asked questions – strata reforms page.  

For information about the current laws, please refer to the Strata schemes section of our website or Contact us if you need help with a particular issue. 

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Draft Strata Schemes Management Regulation 2016 

The proposed Regulation would support strata communities in the following ways.  

Protecting a scheme’s assets by:

  • outlining what the developer’s maintenance schedule should contain, which needs to be prepared for the first annual general meeting. This would inform owners about their maintenance obligations and help them set up an adequate sinking fund for capital works.
  • providing a ‘common property memorandum’, which owners could adopt. This would set out owners’ maintenance responsibilities to protect their building assets.
  • setting out how building bonds for new strata buildings would function. This new system is designed to provide a guarantee for the quality of the building work being done. The Regulation provides the means for defects to be identified, reported and remedied. It also sets out when the NSW Government could intervene to review decisions made during this process.

Helping schemes to operate efficiently and effectively by:

  • allowing for different types of voting procedures including secret ballots, electronic and remote voting and pre-meeting voting.
  • specifying that voting records, including electronic voting records, need to be retained for 12 months only (unless they form a part of a ‘collective sale and renewal’ process).
  • setting out the process for mandatory Fair Trading mediation so disputes and complaints can be resolved early, where possible. Unresolved disputes would go before the NSW Civil and Administrative Tribunal (NCAT).
  • establishing that certain financial matters, such as requirements for accounting records and expenditure on legal services, would not require an owners corporation meeting.
  • setting out clearer approval requirements for renovations to make it easier to get basic renovations done with no or minimal approval, including:
    • no approval for certain cosmetic renovations
    • approval by general resolution (50% of owners agreeing) for ‘minor renovations’.
    Structural renovations would continue to require approval by special resolution or as set out by the strata scheme in a by-law.  

Clarifying and reinforcing key accountabilities by:

  • providing procedures to elect members for the strata committee, and to elect tenant representatives to that committee.
  • setting out additional matters for the agenda for the first annual general meeting, and requiring the original owner or lessor of the land to provide specific documents at least 48 hours prior.
  • determining the insurance requirements for schemes.
  • clarifying that owners corporation responsibilities could only be delegated to a strata managing agent or strata committee (formerly called ‘executive committee’).
  • outlining requirements for window safety devices, by-laws (rules) for strata schemes in existence before 1996 and model by-laws that may be adopted in full or in part by other strata schemes.
  • determining how schemes could set and enforce rules to limit the number of adults that can occupy a bedroom. This is a measure designed to help schemes prevent overcrowding.
  • listing the offences that may result in penalty notices.
  • setting out the content that should be included in:
    • payment plans for late strata fees (and the processes for how these funds may be recovered)
    • statements of key financial information, which annual financial reports for owners
    • receipts issued by treasurers of owners corporations.

The draft Regulation also sets out Government fees for mediation and Tribunal hearings, transitional provisions for the laws, and other necessary detail to support the operation of the new strata laws.

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Receive email updates on the reforms  

Prepare for the changes with updates straight to your inbox: register for strata schemes email updates.

Property industry professionals are encouraged to subscribe to Fair Trading’s email alert service: Property matters.

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Next steps  

All submissions will be reviewed, which may result in further amendments to the regulations. If required, we may conduct further targeted consultation on any key issues identified. If you submit comments, you will be notified when the regulations are finalised.

The final regulations will be published on the NSW legislation website.

It is anticipated that the new strata laws will commence in November-December 2016.

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What's happened so far 

Research and people having their say has informed the comprehensive reforms.

In October 2015, the Strata Schemes Management Act 2015 and the Strata Schemes Development Act 2015 were passed by the NSW Parliament. 

Consultation has included the following:

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