New laws designed to take immediate action to help restore confidence in living and investing in strata schemes are now before the NSW parliament.
The reforms which impose higher penalties and greater disclosure obligations on strata managing agents are aimed at ending secret kickbacks on insurance policies and weeding out bad players.
Strata laws put owners' corporations in charge of making key decisions on the buildings and common property of townhouses and apartments, usually with the assistance of a strata managing agent.
The new laws will help build confidence in the sector which has been challenged by more than 965 complaints about strata agents to NSW Fair Trading in the five years to 2023. More than half of those complaints were about rules of conduct or budgets, levies and finances.
The higher penalties, greater transparency and new enforcement powers follow an $8.4 million investment in more resources for the Strata and Property Services Commissioner in this year's budget.
Key changes 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.
The new laws were informed by consultation with key stakeholders such as the Owners Corporation Network and Strata Community Association.
Minister for Better Regulation and Fair Trading Anoulack Chanthivong said:
"Building more high quality, higher density housing is a key pillar of the NSW Government's comprehensive plan to build a better NSW.
"These reforms are critical to supporting confidence in investing and living in strata schemes.
"They will help to restore the confidence of the 1.2 million people already living in strata schemes, but they won't be the last changes we make as we work to make strata an attractive housing option."
