Greater accountability and transparency are at the heart of new strata laws now in effect which require strata managers in NSW to be upfront with owners about kickbacks and conflicts of interest.
The reforms give property owners better information and increase accountability for strata managers through improved transparency around their financial relationships and potential conflicts of interest.
The expanded disclosure requirements mandate clear and timely information-sharing by strata managers.
Under the new laws, strata managers must:
- Disclose any connections with suppliers and developers, including the nature of the relationships
- Provide detailed breakdowns of insurance quotes, including commissions and broker fees
- Report in real time if any new connections or interests arise during their appointment
Additionally, strata managers must now provide enhanced annual reports to owners corporations which detail any supplier and developer connections.
NSW Fair Trading will be enforcing these new obligations, with strata managers required to understand and comply with the new requirements, including auditing their previous disclosure practices to identify any gaps, and implement processes to ensure timely and accurate reporting under the new requirements.
Strata property owners are encouraged to familiarise themselves with the changes and discuss any concerns with their strata manager.
Targeted compliance operations and education initiatives will embed recent reforms and improve consumer confidence in strata management.
Managers who fail to meet the new disclosure obligations may face penalties of up to $110,000.
These new rules form part of the second tranche of reforms the Government has passed through the NSW Parliament to improve the strata industry.
A third tranche of reforms is currently being debated in the NSW Parliament and will increase accountability of developers to ensure initial strata levies are accurate so owners aren't hit with higher fees once they move in, and will introduce financial hardship provisions for people struggling to pay their fees and protect owners from unfair contract terms.
For more information, visit the NSW Fair Trading website:
Quotes to be attributed to Minister for Better Regulation and Fair Trading Anoulack Chanthivong:
"These reforms are about ensuring transparency and accountability for everyone living in strata communities.
"These enhanced disclosure requirements will give strata property owners the confidence they need to make informed decisions about their homes or investments.
"Strata managers have an obligation to act in the best interests of their clients, which includes maintaining the trust of owners corporations. These reforms will improve oversight and ensure strata managers' practices are open and transparent.
"Strata owners deserve clear, timely, and honest information from their managers, and these laws provide a vital step in restoring trust and supporting better decision-making for strata communities."
Quotes to be attributed to Fair Trading Commissioner Natasha Mann:
"With more than 87,000 strata schemes and more than 1.2 million people living in strata across NSW, these reforms are vital in ensuring fairness and trust for everyone living in strata communities.
"We will be working to educate the industry on their obligations and monitor compliance with NSW strata laws, with penalties of up to $110,000 for those flouting the law."
