The NSW government has introduced new legislation to restore confidence in strata living and investing, targeting issues with strata managing agents and insurance policies.
Key reforms include higher penalties for agents who fail to disclose information about commissions, stricter conflict-of-interest disclosure requirements, and a ban on agents receiving commissions for insurance products when they don’t actively seek the best deal for residents.
The changes come in response to over 965 complaints about strata agents to NSW Fair Trading in the past five years, with more than half related to rules of conduct, budgets, levies, and finances.
Minister for Better Regulation and Fair Trading Anoulack Chanthivong said the reforms are critical to supporting confidence in strata schemes.
“These reforms are critical to supporting confidence in investing and living in strata schemes,” Mr Chanthivong said.
“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.”
The new laws also strengthen NSW Fair Trading’s enforcement and compliance powers, backed by an $8.4 million investment in additional resources for the Strata and Property Services Commissioner in this year’s budget.
The legislation aims to address concerns about secret kickbacks on insurance policies and remove unethical players from the industry.
It introduces greater transparency and disclosure obligations for strata managing agents, who play a crucial role in assisting owners’ corporations with key decisions on buildings and common property.
The reforms were developed in consultation with key stakeholders, including the Owners Corporation Network and Strata Community Association, to ensure they address the most pressing issues in the sector.
Mr Chanthivong said that building more high-quality, higher-density housing is a key pillar of the NSW Government’s comprehensive plan to build a better NSW.
The new laws are seen as an important step in supporting this goal by improving the overall experience of strata living.
The government’s focus on strata reform reflects the growing importance of apartment and townhouse living in NSW’s urban areas.
As more people choose to live in strata-titled properties, ensuring a fair and transparent system becomes increasingly crucial.
REINSW CEO, Tim McKibbin said that while he felt the current standards did a good job, anything that creates more transparency is valuable.
“I believe that transparency is essential in how services should be delivered,” Mr McKibbin said.
“You don’t want to feel like something is happening behind the scenes that isn’t in your best interest
“An agent has a unique relationship with their client, which is different from a typical transaction on high street.
“An agency relationship carries a duty of absolute good faith, and making full disclosures is a crucial part of that responsibility.”
The increased penalties and stricter disclosure requirements are expected to deter unethical practices and improve the overall standard of strata management services.
While the new laws represent a significant step forward, the Minister indicated that further changes might be necessary to continue improving the strata living experience in NSW.
The government plans to monitor the impact of these reforms and consider additional measures to enhance the attractiveness of strata as a housing option.
As the legislation moves through parliament, stakeholders in the strata industry are preparing for the changes.
Strata managing agents will need to review their practices to ensure compliance with the new disclosure requirements and commission restrictions.
