New strata laws to increase transparency
Whether you’re buying a strata-titled property for a home, or for investment purposes, they are often an attractive option; generally, they are less expensive than similar sized freehold properties, are often low-maintenance and some communities have some great shared amenities including swimming pools and gyms.
Many enjoy these benefits; indeed, according to the Australasian Strata Insights 2022 Report, more than 1.2 million people live in strata communities in NSW, equating to nearly 1 in 5 people.
This figure is set to rise though; we are in a housing crisis in NSW and government plans to build more high quality, higher density housing.
The report also found there were over 1200 full-time strata managers, and unfortunately some are not as honest as others; NSW Fair Trading had more than 965 complaints about strata agents in the five years to 2023 with more than half of those complaints about rules of conduct or budgets, levies or finances.
To help stamp out this misconduct, the NSW Government will impose greater disclosure obligations with new laws set to be introduced to Parliament.
Key changes proposed include:
- increasing the maximum penalties and penalty infringement notice amounts for existing agent obligations to disclose information about commissions.
- strengthening the conflict-of-interest disclosure requirements.
- banning agents from receiving a commission on insurance products when they don’t play a role in finding the best deal for residents.
- strengthening NSW Fair Trading’s enforcement and compliance powers.
Minister for Better Regulation and Fair Trading Anoulack Chanthivong said these reforms are critical to supporting confidence in investing and living in strata schemes.
“We want to change the perception that strata managing agents easily, and readily, take advantage of owners by significantly increasing the consequences for those who do the wrong thing.
“The new laws are designed to take immediate action to help restore confidence in living and investing in strata schemes, ensuring more people consider apartment living as a housing option,” he said.
The Government will consult with key stakeholders such as the Owners Corporation Network and Strata Community Association on the draft laws in the coming weeks, and Parliament will consider the new laws later this year.
Changes to strata scheme laws in 2023
These latest proposed laws follow a number of changes to strata scheme laws, which began in December 2023.
By addressing pain points that have been raised in recent years during public consultation, the aim of these changes is to improve the lives of everyone living in strata complex.
The changes impact key areas of strata management including renewal processes, conflict of interest disclosure requirements, pets, financial management, and by-laws.
From a landlord’s point of view, some changes include:
- A landlord’s agent is required to provide notice of a tenancy to the owner’s corporation.
- A landlord’s agent is required to give a copy of by-laws and any strata management statement to a tenant within 14 days of the tenant signing the rental contract unless notice has already been given under the Residential Tenancies Act 2010.
- A landlord’s agent is required to give a copy of any changes to the by-laws and strata management statement to the tenant within 14 days of the change starting.
Find out more about these changes here.
Ensuring you adhere to all legislation, including ensuring your tenant understands strata bylaws, is just some of the many responsibilities we undertake when managing your property.
If you want to know more about our services, give us a call on 02 4954 8833 or pop into our Cardiff office for a chat. Or send us an email to: mail@apnewcastle.com.au – we’d love to hear from you.