New Strata Disclosure Laws

Strata disclosures

Major reforms to strata management regulation in New South Wales are set to take effect in early 2025, introducing new changes to disclosure requirements for strata managing agents. The reforms aim to increase transparency and accountability in the sector while providing owners corporations with greater oversight of their strata schemes.

Enhanced Disclosure Requirements

Starting February 3, 2025, strata managing agents will face expanded disclosure obligations that significantly increase the scope of information they must share with owners corporations. The new requirements affect multiple stages of the strata management relationship.

Pre-Appointment Disclosures

Before securing an appointment, agents must now provide comprehensive information about:

• Their connections with regularly used suppliers, including detailed relationship descriptions.
• Any advice provided to building developers about strata or community land scheme plans within the previous two years.

Ongoing Management Obligations

During their tenure, agents will need to:

• Provide written explanations when requesting approval for commissions or training services.
• Make immediate disclosures about any new connections or interests related to the strata scheme.
• Submit detailed notifications before entering into contracts on behalf of owners corporations.
• Present expanded information at annual general meetings (AGMs).

Insurance Transparency

The reforms introduce specific requirements for insurance-related matters:

• Quotations must be clearly itemised with detailed breakdowns.
• Base premiums, GST, commissions, and broker fees must be separately listed.
• Agents cannot receive commissions on insurance arranged independently by owners corporations.

Stronger Enforcement Framework

NSW Fair Trading’s enforcement capabilities will be strengthened from November 8, 2024, with the establishment of a dedicated Strata and Property Taskforce. The new enforcement regime includes substantial penalties for non-compliance:

• Corporate entities face maximum fines of $55,000 for breaching disclosure obligations.
• Individual agents may be fined up to $11,000.
• Violations of conduct rules under the Property and Stock Agents Act could result in corporate fines up to $110,000.

What This Means for Property Owners

These reforms represent a significant win for owners and investors in strata schemes. The changes will deliver:

• Clearer information about any relationships between managers and service providers.
• Better oversight of insurance costs and commissions.
• More detailed reporting at annual general meetings.
• Stronger protections through increased penalties for non-compliance.

Strata owners can expect to receive more comprehensive information about their strata scheme’s management, making it easier to make informed decisions about their investment. The new requirements for real-time disclosure of interests and detailed breakdowns of costs will help owners better understand where their money is going and identify potential conflicts of interest.

The reforms demonstrate a significant step forward in consumer protection within the strata sector, ensuring that property owners have the information they need to effectively oversee their strata schemes.

Strata +’s  Insurance Philosophy

At Strata +, we believe in providing transparent and flexible insurance arrangements for our clients. Unlike some strata agencies that maintain exclusive partnerships with single brokers or operate in-house brokerage services, we prioritise independence and client choice in insurance decisions.

How We Operate

Our approach centres on three key principles:

• Independence in broker selection
• Transparency in all transactions
• Client choice in remuneration arrangements

We work with independent insurance brokers to source quotations from various providers, ensuring a competitive and transparent selection process. All options are presented to the strata committee, who retain full decision-making authority over insurance selection.