This article is about the new strata laws set to commence in NSW.
New laws will soon commence in New South Wales to increase transparency and accountability in the strata management industry.
Strata managing agents who engage in unethical practices, such as undisclosed kickbacks or failing to disclose conflicts of interest, will face harsher penalties.
The new laws aim to protect the interests of strata owners by giving them greater control over their buildings and common property.
The big changes are:
- Increased penalties: Maximum penalties and penalty infringement notice amounts for agents who fail to disclose information about commissions have been raised.
- Strengthened conflict-of-interest disclosure: Agents will be required to provide more detailed information about potential conflicts of interest.
- Ban on insurance commissions: Agents will no longer be allowed to receive commissions on insurance products unless they actively help residents find the best deals.
- Enhanced enforcement powers: NSW Fair Trading has been granted additional authority to investigate and prosecute breaches of strata laws.
Best Practice Guide
The new disclosure requirements are largely in line with the Strata Community Association’s best practice guide.
This means that strata managers who are already following the guide will not need to make significant changes to their practices.
The new laws will also ensure that all strata managers are subject to the same standards.
Adrian Mueller
JS Mueller & Co Lawyers
E: adrianmueller@muellers.com.au
P: 02 9562 1266
This post appears in Strata News #714.
If you have a question or something to add to the article, please leave a comment below.
Disclaimer: The information contained in this article is provided for your personal information only. It is not meant to be legal or professional advice nor should it be used as a substitute for such advice. You should seek legal advice for your specific circumstances before relying on any information herein. Contact JS Mueller & Co for any required legal assistance.
JS Mueller & Co Lawyers has been servicing the strata industry across metropolitan and regional NSW for over 40 years. We are a specialist firm of strata lawyers with in depth and unmatched experience in, and comprehensive knowledge of strata law and levy collection.
Read next:
- NSW: Tough new strata laws pass Parliament
- NAT: Many strata managers who handle apartments are conflicted: here’s how
This article has been republished with permission from the author and first appeared on the JS Mueller & Co Lawyers website.
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The proposed ban on insurance commissions seems wishy washy. If I understand it correctly, if the Strata Manager (SM) seeks 3 insurance quotes before renewing the insurance, he qualifies for the commission. In our building that means $1500 to $2,000 for 5 minutes work. I see that as a rip off, which is now sanctioned by legislation. I would prefer to see a total ban on insurance commission and the SM can charge for the 5 minutes work in seeking quotes, receiving quotes, obtaining instructions for selection of policy and payment of premium. Being as generous as I can be, that’s no more than 60 minutes work, if that. The commission should be paid to those who make the decision to renew, the Owners Corporation.