2016 saw a major overhaul of strata legislation in NSW with over 90 changes. With more than a quarter of NSW’s population living or owning in a strata these changes will effect many of us. This is part 5 in our series summarising some of the major changes to strata laws and focuses on the changes in the legislation regarding strata managers and building defects.


Strata managing agents: If a strata manager appointed at the first annual general meeting (AGM) of the strata scheme, the appointment must be for no more than 12 months. For later appointments, the term is limited to 3 years. However reappointment of the strata manager is possible. Also, the strata committee is able to extend the term of appointment of the strata manager by successive periods of up to 1 month, pending a decision as to the reappointment.

Strata managing agents: A strata manager must give the owners corporation at least 3 months’ written notice before the end of their term of appointment.

Strata managing agents: A strata manager must make and keep for 12 months records of the functions exercised by them and the manner in which they were exercised. A copy of these records must be given to the owners corporation each year.

Strata managing agents: Strata manager cannot accept gifts valued $60 or more.

Strata managing agents: A strata manager must disclose at each AGM all commissions and training services received and provided in connection with the strata during the last 12 months and their estimated value or likely to be provided or paid to the strata manager in the following 12 months.  A strata manager must give an explanation of any variations between the commissions or training fee estimates disclosed and commissions or fee estimates actually received as soon as possible.

Strata managing agents: A strata manager must disclose any connection with the original owner and any financial interest in the strata scheme.

Building Defects: Generally, building work on residential apartments of more than $20,000 would be covered by the Home Building Act and the NSW Government’s home warranty insurance scheme. The Home Building Act sets out what major and minor defects are covered.

Building Defects: However, the Home Building Regulation contains a number of exemptions from needing home warranty insurance. For instance, residential building work relating to the construction of a multi-storey building does not need to obtain home warranty insurance. A multi-storey building is a building that has 3 or more storeys with at least 2 separate dwellinga.

Building Defects: The new legislation deals with defective building work which is over $20,000 and does not need home warranty insurance. The section essentially requires developers to lodge a building bond (2% of the contract price of the building work) with the NSW government before an occupation certificate is issued under the Environmental Planning and Assessment Act. An independent qualified building inspector, must then carry our various inspections of the building at various times and report to the owners corporation. The building bond may then be used by the owners corporation for, or in connection with, fixing defective building work identified in the final building report and any excess amount must be repaid to the developer. Although be aware that this section of the legislation has, as at the date of preparation of this document, not yet commenced.


This article is for general information only and not legal advice. Legal advice should be obtained before taking  any action or otherwise rely upon the content of this article in any way. This article was prepared on 17 January 2017 and has not been revised to account for any changes in the law since that time.