New South Wales strata legislation
This NSW strata legislation page will introduce you to the essential NSW strata laws and an up to date timeline of legislative changes and announcements.
Home to the first-ever strata titled property in Sydney’s Burwood in 1961, New South Wales (NSW) has the highest collection of strata and community living properties in Australia.
NSW strata legislation is regularly adapting and evolving to keep pace with contemporary requirements. With a focus on reducing red tape and increasing flexibility for owners and investors while enhancing the professionalisation of strata managers, NSW’s legislation is making community living an even better place to live and invest.
Five key areas you need to know about NSW strata legislation
From annual general meetings to repairs and maintenance, having a high-level of understanding for NSW strata legislation will help make community living easy. To help, we have broken down the five most important areas of community living and provided regulatory context so that you can master strata.
NSW strata legislation updates
The timeline below provides summaries of relevant legislative changes that impact strata stakeholders in NSW and offers related links and further reading to help you understand NSW legislative strata changes.
The New South Wales Government recently announced a new regulatory framework for short-term rental accommodation, which was due to become effective in July 2021. This has now been delayed to 1 November 2021 to ensure those affected have ample time to familiarise themselves with the new regulations.
The regulatory framework is due to cover the following areas:
- A new planning framework
- Fire safety standards for short-term rental accommodation
- A government register for short-term rental accommodation.
Until it becomes effective, local councils will continue to regulate short-term rental accommodation.
The New South Wales Government is prioritising law reforms that will improve the safety and security of multi-storey buildings, including strata properties. The Design and Building Practitioners Act 2020, which is due to come into effect on 1 July 2021, will better govern the design and building of new apartments to increase the building quality of off-the-plan strata properties.
Changes introduced through this law include:
- New building designs will need to be declared to the Building Code of Australia and lodged on the NSW Planning Portal before any construction can commence.
- Developers will need to fix design problems before any construction can begin. This means severe building defects may become less common of a problem for future newly-built strata properties.
New community scheme laws, which aim to provide more modern, flexible and democratic regulations for developers, owners and residents, have now passed in New South Wales Parliament and received royal assent.
The new laws — Community Land Management Act 2021 and the Community Land Development Act 2021— align closely with strata scheme laws, including the 2015 reforms and other changes enacted since. The accompanying regulations are expected to follow.
The NSW Government has passed legislative amendments that will make it easier for strata committees to install renewable energy infrastructures such as solar panels, battery storage and electric vehicle charging points into strata properties.
While the voting threshold for the approval of such installations used to sit at 75 per cent, this has now been revised to 50 per cent.
Changes to planning laws are due to be announced in 2021. Until this announcement is made, hosts can approach their local council for regulations that must be complied with.
A short-term rental accommodation premises register is also due to be introduced in mid-2021. Upon commencement, hosts will be expected to register their short-term rentals on the register.
Short-term rental accommodation hosts, guests, letting agents and online booking platform operators will soon be subject to a new regulatory framework, with a mandatory Code of Conduct to be introduced on 18 December 2020.
NSW Fair Trading is expected to release a discussion paper in November to bring outdated community scheme laws in line with strata scheme reforms made under the Strata Schemes Management Act 2015. Updating community scheme laws will provide residents and owners corporations with modern, flexible and more democratic governance arrangements in keeping with those introduced for strata schemes under the Act in 2015.
Upon release of the discussion paper by the Department of Customer Service, interested parties can provide feedback through the NSW Fair Trading online form. For more information, visit https://www.fairtrading.nsw.gov.au/consultation-tool/community-schemes-law-reform/publications/community-schemes-reforms-explanatory-paper/
After a long-standing battle, the Court of Appeal of the Supreme Court of NSW handed down a ruling that a Sydney strata scheme’s blanket “no pets by-law” is oppressive under Section 139(1) of the Strata Schemes Management Act 2015.
The Court decision, which creates a precedent for lower courts and tribunals, leaves the way open for NSW animal lovers to be able to keep a pet in their strata property, as long as they abide by other strata by-laws.
We await the outcome of an update to the Strata Schemes Amendment (Sustainability Infrastructure) Bill. The purpose of the Bill is to make it easier for strata schemes to support the introduction of sustainability measures that would reduce impacts on the environment. The Bill passed the Legislative Assembly and was sent to NSW Upper House, the Legislative Council.
Some of NSW’s new regulations designed to prevent building defects and boost confidence within the state will come into effect on 1 September 2020. The new regulations, which give the NSW Building Commissioner a range of powers to regulate the construction sector and protect apartment owners, will impact multi-storey (Class 2) residential building construction. Coming in under the Residential Apartment Buildings (Compliance and Enforcement Powers) Act 2021, the regulation means the following now applies:
- Developers are required to notify owners of the date construction is due for completion. The notice must be provided at least six months in advance and no later than 12 months.
- A new inspection compliance program will start that reviews construction work and can make builders stop work, fix defective or poor work, and delay the occupation certificate being issued.
- The government will provide a free TAFE course for 60 days to address skill gaps within the industry that lead to defects and issues.
- A new process will apply for lodgement of the 2% strata building bond. The bond will now be lodged via the NSW Planning Portal and replaces the Strata Building Bond and Inspections Scheme (SBBIS) e-Portal.
- The Building Commissioner’s powers to investigate reports of defects increases. Reporting defects should still be done via NSW Fair Trading in the first instance. Individual strata and community lot owners can report their issues on the NSW Fair Trading website where each complaint will be assessed on a case by case basis. The Building Commissioner now has the power to launch an investigation into complaints deemed necessary and caretakers or others who control access to the property will be obligated to cooperate with the Commissioner and the investigator to enable the inspection to occur.
The regulations are part of a six-pillar reform program that looks to be delivered by mid-2021.
On 1 July 2020, the Building and Development Certifiers Act and Regulation commenced as the new legislation that regulates certifiers (building surveyors, certain engineers, swimming pool inspectors, and strata and subdivision certifiers). The new legislation is part of the NSW Government’s response to the independent review of the Building Professionals Act and seeks to promote public confidence in certifiers and certification work, including changes in key areas.
Key changes include:
Previously, the NSW laws governing disposing of abandoned goods on common property — and what can be done to get rid of them — was governed by the Strata Schemes Management Act 2015. As of 1 July 2020, however, any goods left on common property and the procedures that can and should be followed to get rid of them now come under the Uncollected Goods Act 1995.
The Act divides goods into six categories. Different rules and procedures apply to each. The six categories are perishable, low value, medium value, high value, personal documents and memorabilia, and motor vehicles. In addition, the party disposing of the abandon goods must keep appropriate records of the sale or disposal of the goods and who it went to.
For a comprehensive understanding on what to do with abandon goods on common property and what the new legislative changes mean for NSW in detail, follow the read more tab.
On 1 July 2020, legislative changes came into effect that defines who can carry out annual assessments of a building’s fire safety measures and endorse the annual fire safety statement.
A building owner can no longer determine who can do the assessments. It can only be done by a person who is accredited by an industry association approved by the NSW Government. These are now known as ‘accredited practitioners’.
This does not affect the installation, routine maintenance or servicing of fire safety measures, which do not require accreditation.
The first practitioner accreditation scheme, the Fire Protection Association (FPA), has been approved, meaning only a person accredited by the FPA can do the following:
• Assess the performance of essential fire safety measures/annual or supplementary fire safety statements
• Endorse the non-statutory measures/annual or supplementary fire safety statements for emergency planning and alarm monitoring.
NSW Parliament passed two important Bills that look to reinstate consumer confidence when it comes to the construction industry and managing defects. NSW had both the Design and Building Practitioners Bill 2020 and the Residential Apartment Buildings (Compliance and Enforcement Powers) Bill 2020 pass.
The Design and Building Practitioners Bill 2020 will come into effect as of 1 July 2021. While the Residential Apartment Buildings (Compliance and Enforcement Powers) Bill 2020 will come into effect as of 1 September 2020. The Bills give new powers to the government that mean developers can be forced to rectify building works that are likely to result in defects.
June 2020: NSW passes Community Land Management Amendment (COVID-19) Regulation 2020 and Strata Schemes Management Amendment (COVID-19) Regulation 2020 to provide relief to strata owners and committees
Following the federal government’s legislation changes to provide support and protection to communities during COVID-19, the NSW Government has introduced a raft of regulatory changes to minimise the negative impacts of COVID-19.
The NSW Government’s legislative amendments, for strata, have meant providing temporary regulations to manage issues such as holding meetings, voting, and signing documents when having to remain physically distant.
As part of the $440 million NSW Government land tax relief scheme, commercial and residential landlords who reduced the rent of their tenants due to COVID-19 can now apply for relief of up to 25 per cent.
If eligible, the relief may:
- reduce 2020 land tax liability by up to 25%
- defer land tax payments by up to 3 months
- provide a refund on the amount of rent reduction you’ve given a tenant
- reduce the amount of 2020 land tax payable if you have not yet completed payment.
To avoid ongoing hardship, there are now provisions to allow some tenants impacted by COVID-19 the ability to end their tenancy agreements. Tenants impacted by COVID-19 can now apply to the NSW Civil and Administrative Tribunal to end a tenancy where:
- The landlord has not responded to your request for reduced rent or refuses to negotiate either directly or with NSW Fair Trading.
- The tenant or landlord are unable to agree on the reduced rent and how it will be paid.
The Tribunal may make tenants pay up to two weeks rent to compensate the landlord. The law also provides tenants with other ways to end an agreement.
In a concerted effort to improve building regulation and certification, NSW buildings, as of April 2020, will only be able to have their fire safety statements signed or endorsed by workers deemed as ‘competent fire safety practitioners’.
A competent fire safety practitioner, or CFSPs, is someone who can perform fire safety assessments according to the standards set out in legislation. The CFSPs must inspect and verify the performance of each critical fire measure that applies to the building, endorsing that they are working. The new checks must be assessed annually.
The CFSPs must now assess the essential fire safety measures, including inspecting fire exits and paths, and check that hose reels, hydrants, sprinkler systems, fire detection and alarm systems comply with the Building Code of Australia before instalment.
If the right practitioner isn’t engaged, the strata property won’t be considered compliant and local government can issue fines. NSW Government are providing a growing list of register CFSPs.
30 April 2020: NSW Government releases final report on cladding and building crisis
With NSW suffering from a severe breakdown in public confidence when it comes to the building and construction sector, the NSW Government established a set of inquiries, reviewed by the Public Accountability Committee, to gauge where there has been a lack of regulation and government oversight.
On 30 April 2020, the committee released its final report giving close attention to issues of flammable cladding, the private certification of buildings, and the role of the strata committee in dealing with defective buildings and disputes. For a breakdown of what the recommendations mean visit here or read the report in full on the NSW Parliament website.
As of 22 April, NSW has introduced video conferencing technology — like Zoom, Skype and WhatsApp — as a way to witness important legal documents as part of the Electronic Transactions Amendment (COVID-19 Witnessing of Documents) Regulation 2020. Such legal documents include wills, general and enduring powers of attorney, deeds or other agreements, enduring guardianship appointments, affidavits (including an annexure or exhibits), and statutory declarations. The new regulation will apply for the following six months.
Draft regulation to deal with the affixing of seals for NSW strata associations is predicted to be passed within the coming months.
There are some circumstances where affixing a seal is not required by law. In these circumstances, the committee can appoint a particular person, like the secretary, to sign certain documents without a seal. This will allow your strata manager to act on these documents on behalf of the owners corporation. Talk to your strata manager about circumstances where this might apply.
The NSW Government has introduced new regulation to manage the short-term rental accommodation industry (STRA). The new regulations have been designed to allow local communities to continue to gain from the economic benefits of STRA, but also minimise negative impacts on neighbours and others affected by short-term letting. As of 10 April 2020, through changes to the Fair Trading Act 1987 and Strata Schemes Management Act 2015, NSW strata properties will now, via by-laws, be able to prohibit short-term letting. Click on the heading link to read more.
23 March 2020: Real estate and property industry reforms
The NSW Government announced reforms into real estate and property services to raise education standards across the industry, including improving professional skills and streamlining the licensing system. PICA Group contributed to the 129 submissions put forward to government to shape the changes. The new regulations will start as of 23 March 2020. The new systems look to improve the customer experience and increase the professionalisation of community living professionals.
23 March 2020: NSW Residential Tenancies Regulation 2019 to come into effect
To improve the renting experience in NSW, the state government has replaced the Residential Tenancies Regulation 2010. The new 2019 regulations look to enhance the residential tenancy system by proposing changes such as: making it easier for tenants to make some minor works changes. Landlords or agents are to inform prospective renters of any drug crimes pertaining to the property, sets out in detail how and when a landlord must repair or replace a battery in a smoke alarm, updates the form for a residential tenancy agreement and condition report.
1 February 2020: Changes to NSW fire safety statements forms
NSW fire safety statements must use a standard template that is issued by the NSW Government. Following consultation and feedback from stakeholders, including building owners, committees, councils, and industry, the Department of Planning and Industry has since updated the fire safety statement form. The new and updated form must be used for all fire safety statements issued from 1 February 2020. The new form can be found under “standard template forms” on the department’s website.
5 December 2019: Community schemes law reform
The NSW Government is seeking public feedback on the drafting of the Community Land Management Bill 2019 and the Community Land Development Bill 2019. Public consultation is open until 28 February and the table of reforms can be found here.
14 August 2019: New South Wales Building Commissioner appointed
David Chandler appointed as New South Wales Building Commissioner. The regulator will overlook the construction industry and ensure reforms are implemented.
1 July 2019: New retirement village laws commence
The New South Wales government implements new laws to improve living in retirement village communities, providing residents with added security and power. The new laws include mandatory rules of conduct relating to conduct and behaviour of operators, new emergency management requirements, a contract check-up meeting between resident and operator and approval rights for residents over the appointment of the village’s accounts auditor.
20 May 2019: Update to 2 per cent strata building bond and inspections scheme
In a recent update to the building bond and inspections scheme, New South Wales Fair Trading details the eight-stage process and the duration of the scheme as a total of three years. Stage one of the process requires developers to carry out the building bond lodgement through an online portal.
10 May 2019: New South Wales introduces Rules of Conduct for operators of retirement villages
The state government introduced reforms to the Retirement Villages Regulation 2017 to empower retirement villages. The proposed rules describe how operators should behave and also outline practices and processes for the effective functioning of a retirement village. Operators are required to follow these rules and may be penalised for non-compliance. If this affects your strata property and quality of community living, you may share feedback on the proposed amendments latest by 7 June 2019.
23 April 2019: Fair Trading outlines the compliance requirements for engaging electricians
In its investigation named ‘Operation Switch’, New South Wales Fair Trading revealed that there is a need for high levels of compliance across the residential building sector in the state. Electricians and workers must hold a licence before they can be engaged by the committee for any electrical work in the strata property.
27 March 2019: Safety warning on open-flued gas space heaters
If your apartment has an open-flued gas space heater, take care to check the brand for safety and compliance. New South Wales Fair Trading has identified four heater models that may be unsafe to use in your strata property. Before you use the heaters, make sure to check if they have been registered with the supplier for testing and any required modifications are done by a licensed gas fitter.
28 February 2019: Amendments made to residential tenancy laws for protecting the rights of domestic violence victims
Effective from 28 February 2019, the Residential Tenancies Amendment (Review) Bill 2018 requires landlords to maintain minimum habitable standards for their rented property and establish reasonable rent control for tenants who are domestic violence victims. While maintaining records, addressing disputes and assessing damage of rented property as a result of domestic violence, landlords must prioritise the privacy of victimised tenants and ensure sensitivity while handling their cases.
22 February 2019: Deadline registration of building
Under regulation, owners of certain buildings with external combustible cladding are required to register their building with the state government through a cladding registration portal. Owners of buildings occupied by 22 October 2018 are required to register the building by 22 February 2019.
28 November 2018: Increased time-frame for notice delivery by post
An amendment to section 76 (1) (b) of the Interpretation Act 1987 (NSW) states that committee members now need to take into account a seven working day notice period, instead of four working days as previously, between the time the notice is sent and the date of the meeting. More information is available at the government website for New South Wales legislation
22 October 2018: Ban on combustible cladding and cladding audit
The state government introduced new laws on external combustible cladding: Environmental Planning and Assessment Amendment (Identification of Buildings with Combustible Cladding) Regulation 2018 and State Environmental Planning Policy Amendment (Exempt Development – Cladding and Decorative Work) 2018. Under the laws buildings need to comply with the combustible cladding ban. Building occupied after 22 October 2018 must register their information online about their building ownership and type of cladding material being used, within four months of first occupation. All buildings occupied before 22 October 2018 must complete online registration by 22 February 2019. A statewide cladding audit found: 1400 buildings have cladding with 600 of those classified as high risk.
11 October 2018: New plumbing and drainage legislation
The government has made changes to the Plumbing and Drainage Act 2011 and the Plumbing and Drainage Regulation 2017. Before starting any plumbing or drainage work, a Notice of Work needs to be submitted. The Certificate of Compliance as well as the Sewer Service Diagram needs to be provided after the work is completed, to the regulators and inspectors.
1 September 2018: New South Wales updates its swimming pool regulations
Legislation commences around Swimming Pools Regulations 2018 for property owners, builders and strata committees overseeing shared property amenities. These changes highlight the need for instating safety checks and building barriers around pools in compliance with the Building Code of Australia.
August 15 2018: Aluminium composite panel ban
Some types of cladding made from aluminium composite panels (ACPs) were banned across the state in certain buildings. ACP with a core comprised of more than 30 per cent polyethylene has been banned for use on rendered finish in buildings, external cladding, external wall, external insulation and facade.