After more than a decade in review, the NSW Government has unveiled the most significant overhaul of strata legislation since the Strata Titles Act of 1973. The final draft of the reforms, spearheaded by the Department of Fair Trading, is designed to bring strata living into the modern era — making schemes fairer, more transparent, and easier to manage.

With over 85,000 strata schemes across NSW and more than two million residents living in them, these changes are set to impact nearly every apartment building, townhouse complex, and mixed-use property in the state.

Why These Reforms Matter

Strata living has evolved dramatically over the past 50 years — from small walk-up apartments to large, multi-tower communities with retail, parking, and shared facilities. The old legislation often struggled to keep pace with how we live today. The latest reforms aim to fix that by addressing modern realities: digital communication, building defects, overcrowding, and even smoke drift.

According to NSW Fair Trading, the reforms have five core objectives:

• Make it easier for owners corporations to manage day-to-day issues like pets, parking, and by-laws
• Introduce a fairer process for collective sales and redevelopment
• Hold strata managers and developers to greater accountability
• Address building defects early in a building’s lifecycle
• Enable the use of modern communication tools — including email and virtual meetings

Key Changes Every Owner Should Know

1. Threshold to Sell or Redevelop Lowered

Previously, unanimous consent (100%) was required for a collective sale or renewal. Now, only 75% of owners need to agree for the process to proceed. This reform allows older buildings to be redeveloped more easily, unlocking potential value while still protecting minority owners through an independent review process. Existing schemes can choose to adopt or opt out of this provision.

2. Limits on Proxy Votes

Proxy farming — where one owner collects numerous proxy votes to dominate decision-making — is now restricted. In schemes with fewer than 20 lots, each owner can hold only one proxy. For larger schemes, the cap is 5% of total lots. This ensures meetings are more democratic and decisions reflect the collective voice of the community.

3. Tenants Gain Representation

In buildings where the majority of lots are tenanted, tenants now have a seat at the table. They can nominate a representative to sit on the strata committee (formerly the executive committee), giving renters more visibility and input into how their building is managed — though they still cannot vote on financial matters.

4. Overcrowding Controls Introduced

Owners corporations can now pass a by-law limiting occupancy to two adults per bedroom. This helps prevent overcrowding in smaller apartments and ensures common areas aren’t strained by excessive usage. Exemptions may apply for families and cultural living arrangements.

5. Parking Enforcement Strengthened

Strata schemes can now authorise local council rangers to issue fines for illegal parking on common property. This removes the burden from committees and makes enforcement faster and more consistent — a welcome change for communities struggling with unauthorised parking.

6. Smoke Drift Classified as a Nuisance

Cigarette smoke drifting into other lots or common areas is now officially recognised as a nuisance under the law. Owners and residents affected by smoke drift can take formal action through the owners corporation or NCAT, reinforcing the right to enjoy a healthy living environment.

7. Building Defect Reforms and Developer Bonds

Developers must now lodge a 2% building bond before completion, used to fund defect rectification if problems arise. Independent building inspectors will review new strata buildings twice — at 12–18 months and again at 18–24 months — ensuring defects are identified early and addressed before warranties expire.

8. Renovation Rules Simplified

New, clearer categories define what level of approval is required for renovations:

• Cosmetic work (e.g., painting, picture hooks) — No approval needed.
• Minor renovations (e.g., new flooring, air conditioning) — Approved by a 50% general resolution.
• Major works (e.g., structural changes, altering external appearance) — Require a 75% special resolution.

This new framework cuts red tape for owners while protecting the integrity of shared property.

9. Committee Name and Structure Updated

The old “Executive Committee” is now simply called the Strata Committee — a small but meaningful change reflecting modern, collaborative governance.

What Happens Next?

The draft legislation is currently open for public consultation before being tabled in Parliament. Once passed, the reforms will come into effect in phases, allowing time for strata managers, committees, and residents to adapt.

These updates are designed to make strata management more transparent, efficient, and community-focused — values Metro Strata has championed for years through our proactive, client-first approach.