NSW Strata law changes will affect brokers

NSW’s strata title law reforms came into effect this week with more than 90 changes to the laws and affect 1.2 million people living in over 75,000 strata schemes across NSW.

Key changes include:

  • Providing a flexible and fair mechanism for collective sale and renewal;
  • Making it easier for owners to complete cosmetic and minor renovations;
  • Modernising rules to help prevent proxy farming;
  • New provisions addressing the perennial issues of parking, pets and smoke drift; and
  • Introducing a defects bond (to come into effect July 2017) to fix building defects early in new developments.

“By 2040 about half of people in NSW will either be living or working in strata. We need modern and flexible laws that reflect 21st century strata living,” Minister for Innovation and Better Regulation Victor Dominello said.

“The last major amendments to strata law happened 20 years ago – the face of our state has changed dramatically since then and the new laws better reflect the way people live and work in 2016 and beyond.”

Areas that one should be aware of when it comes to insurance are:

  1. Liability must be increased to a minimum of $20M up from $10M. All strata insurers have been issuing renewals with this increase in the months leading up to the change however due to the competitive nature of this risk most insurers are just absorbing the premium increase,
  2. Strata Managers must now openly disclose the commission they receive from insurers to the strata’s Owners Corporation, and
  3. Strata Managers must provide the Owners Corporation with a minimum of three quotes from different providers or provide a written reason why less than three quotes are provided.

You can find a full breakdown of the legislation here and a factsheet from NSW Fair Trading here.