From 1 July 2025, a significant wave of strata reforms will sweep across New South Wales, ushering in the second and most substantial phase of changes to the state’s strata laws. 

These reforms, part of the Strata Schemes Legislation Amendment Act 2025, are designed to enhance transparency, accountability, and sustainability within strata schemes, impacting owners, strata committees, developers, and strata managing agents alike.

The upcoming changes build upon earlier reforms introduced in February 2025 concerning strata manager disclosure obligations and represent a concerted effort by the NSW Government to address long-standing issues and improve the overall experience of strata living.

Here’s a breakdown of the key reforms taking effect from 1 July 2025:

1. Encouraging Sustainability in Strata Schemes: A major focus of the reforms is to promote environmental sustainability. By-laws that currently prevent the installation of sustainability infrastructure (like solar panels or EV charging stations) solely based on external appearance will be banned, unless the building is heritage-listed or in a heritage conservation area. Owners corporations will also be mandated to consider environmental sustainability at every Annual General Meeting (AGM), including reviewing common property energy and water consumption and expenditure. Capital works fund estimates will also need to factor in costs for sustainability infrastructure.
2. Protecting Owners from Unfair Contract Terms: New provisions will ban unfair contract terms in standard form contracts for goods or services supplied to strata schemes, including strata management contracts. This aims to empower owners corporations with greater negotiation power and control over their financial commitments, preventing them from being locked into disadvantageous agreements.
3. Uplifting Strata Management Services and Accountability: Strata managing agents will face stricter requirements, including half-yearly reporting to the scheme on their functions (previously annual). Certain terms in strata management contracts signed on or after 1 July 2025 will be prohibited, and a statutory defence will be introduced for strata managing agents. Building managers will also have a new statutory duty to act in the best interests of the owners corporation.
4. Imposing Stricter Rules on Developers: Developers of new strata schemes will face enhanced accountability. They 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. Easier Approval for Minor Renovations: The process for approving minor renovations will be streamlined. 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. Improving Repairs and Maintenance: The reforms aim to 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. Enhanced Protections for Utility Contracts (Embedded Networks): 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 Experiencing Financial Hardship: The new laws include provisions to support owners facing financial difficulty. 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. Streamlined Accessibility Infrastructure: 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: While seemingly minor, there will be increases to the fees associated with inspecting strata records.

These comprehensive reforms underscore the NSW Government’s commitment to creating fairer, more transparent, and sustainable strata communities. Owners, strata committees, and industry professionals are urged to familiarise themselves with the new requirements to ensure compliance and leverage the benefits these changes aim to deliver.

More detailed information visit NSW Government Fair Trading

Recommended Next Steps for Strata Schemes

A comprehensive review of your strata by-laws is strongly recommended in the lead-up to and immediate aftermath of 1 July 2025 to ensure your scheme remains compliant and operates effectively under the new NSW strata laws.

For expert guidance contact our specialist team of strata lawyers. Our strata knowledge will ensure your by-laws are legally sound, effectively manage your strata scheme, and ensure they meet any new legislative requirements.