NSW Strata Law Reforms 2026: What Apartment Buyers Need to Know

On 5 July 2026 the NSW Government published the first-year scorecard for NSW Fair Trading's Strata and Property Taskforce: more than 175 unannounced inspections of unit blocks, almost 80 fines worth more than $125,000, disciplinary action against more than 70 licensees and more than 10 operators removed from the industry. One of them was a strata managing agent formerly operating in the Coffs Harbour area, permanently disqualified from the industry for serious fraudulent transactions affecting 66 separate strata buildings and close to 1,000 residents.

For a buyer, the practical change is that the strata report on a NSW apartment says more than it did a year ago, and less of it is optional. Since 1 April 2026 the capital works fund plan comes on a standard form, a new building's first levy estimate must be certified by an independent quantity surveyor, and the strata information certificate has to disclose embedded networks and any Fair Trading action against the scheme. This article sets out which provisions are in force, which start on 1 October 2026, which slipped to 2028, and how to use each one before you exchange.

The timeline: what is law, what is next, what slipped

NSW has passed three strata Acts since late 2024 and commenced them in stages. Fair Trading counts more than 85,000 strata schemes; Strata Community Association NSW put strata and community title schemes at 91,346, holding 1,073,277 lots, in its February 2026 submission.

Sources: NSW Fair Trading, updated 25 August 2026; Building Commission NSW, 26 June and 28 August 2026; assent and commencement dates as reported by Building Commission NSW and Holding Redlich, 19 August 2026.

Two rows catch people out. Fair Trading's draft training guidelines, which SCA NSW responded to in February, said 1 July 2026; the final date is 1 October 2026, for members appointed from that day. And the bond increase, which the 2025 version of this guide put at 1 July 2026, was pushed to 1 July 2028 on 26 June 2026.

Reading a 2026 strata report, line by line

The capital works fund. Any scheme reviewing or replacing its 10-year plan after 1 April 2026 must use Fair Trading's prescribed form, so a lift overhaul in year 6 with no money against it is easier to spot. Compare today's balance with the next three years of scheduled works: $80,000 against $400,000 is a special levy in waiting.

Levies and arrears. Since 27 October 2025 every levy notice must carry a Financial Hardship Information Statement, and an owner in arrears can request a standard-form payment plan of up to 12 months that the owners corporation must answer in writing within 28 days. Interest on overdue levies runs at 10% a year from one month after the due date unless waived. Ask how many plans are running; each one is money not going to repairs.

Insurance. Since 3 February 2025 any insurance quote a strata manager provides must be clearly itemised, setting out the base premium and GST, the commission and broker fee amounts, and who those are ultimately paid to. A manager is also banned from taking a commission on insurance the owners corporation quoted and paid for without their help. If the report attaches the policy but not the breakdown, ask for it; commissions have historically run at around 20% of the premium, according to industry reporting in November 2025. The Productivity and Equality Commission's review, delivered on 27 February 2026, found a move to fee-for-service could produce more than $300 million in net benefits over 15 years. The Owners Corporation Network backed a ban on 24 March 2026, but as of that date no government decision had been published, so the disclosure rules are what you can rely on.

Defects. The report should show any building bond claim, Building Commission NSW orders and litigation. For buildings registered since 2018, the 2025 Strata Defects Survey by Building Commission NSW and SCA NSW gives you the base rate: 53% of the 520 buildings surveyed had a serious defect, consistent with 2023. Buildings registered from 2022 to 2024 had waterproofing defects in 22% of cases against 52% for 2018 to 2021 registrations, and fire safety defects in 16% against 32%. A 2019 building with a clean report deserves a second look at its minutes.

The strata information certificate. The section 184 certificate your conveyancer orders must now include any exclusive supply network (an embedded network for electricity, hot water or internet), any Fair Trading orders or compliance actions against the owners corporation, and meetings held and upcoming. Since 1 July 2025 new utility contracts expire at the first AGM or after 3 years.

Manager and building manager agreements. A strata management agreement is capped at 3 years, or 12 months if signed at the first AGM. Since 27 October 2025 building managers must act in the scheme's interest, flag repairs and safety issues, and disclose any benefit from a contract they recommend, and the Tribunal can terminate the agreement if they act unlawfully. A 10-year caretaker agreement inherited from the developer is still a red flag.

By-laws. Check for a pet by-law (a blanket ban is invalid; see the FAQ), a by-law banning solar or EV charging on appearance grounds (unenforceable since 1 July 2025 outside heritage buildings), a short-stay by-law, and any common property rights by-law giving someone exclusive use of a courtyard or car space you assumed came with the lot.

The questions to ask before you exchange

Each of these now has a documented answer.

1. Has the capital works fund plan been reviewed on the standard form since 1 April 2026, and what does the fund hold against the next three years of works?
2. How many owners are on payment plans?
3. Can I see the insurance quote breakdown, and the sum insured against a recent valuation?
4. Has Fair Trading issued any order or compliance notice to the owners corporation?
5. Is there an embedded network, when does it end, and what does power or hot water cost per lot?
6. For an apartment building over 3 storeys registered since 2018: was a bond lodged, and was any of it claimed?
7. When did the scheme last complete Strata Hub reporting? A scheme more than 3 months past its AGM without reporting faces fines of up to $5,500.

If you are weighing an apartment against a house, the house-versus-unit price gap has narrowed since May 2026; that changes the arithmetic, not the due diligence.

Buying new: bonds, decennial insurance and Building Commission NSW

The first levy is now certified. For new schemes of 3 or more storeys, the developer must engage an independent quantity surveyor (accredited by the Australian Institute of Quantity Surveyors or the Royal Institution of Chartered Surveyors, with no family, employment or financial link to the developer) to certify that the initial maintenance schedule uses the standard form and the first levy estimate matches expected spending, 14 days before the first AGM. Penalties run to $11,000 for an individual and $55,000 for a company. This targets the artificially low first-year levy that made an off-the-plan apartment look cheap until the second AGM.

The building bond stays at 2%. A developer of a new apartment building that is not covered by home building compensation insurance, in practice a building over 3 storeys, lodges a bond of 2% of the contract price with the Secretary before the occupation certificate; an independent inspector reports on defects and the bond pays for what the developer does not fix. On 26 June 2026 Building Commission NSW deferred the planned increase to 3%, to 1 July 2028, by amending the Strata Schemes Management Regulation 2016.

Decennial liability insurance is real but thin. DLI is a 10-year, first-resort policy on the structure, fire safety systems and waterproofing of a building over 3 storeys, taken out by the developer instead of the bond. The Act that commenced on 20 August 2026 widened what it must respond to, from a "serious defect" to a "relevant defect", which in summary means non-compliance with the Building Code of Australia, Australian Standards or the approved plans that causes, or is likely to cause, damage or a risk of death or serious injury. As at 28 August 2026, Building Commission NSW's list of acceptable policies held one product, from Resilience Insurance Pty Ltd; Holding Redlich reported on 19 August that two more insurers had products under review. A regulatory impact statement released in 2023 sought feedback on making DLI mandatory, but that is not law. If a developer says the building is "insured for 10 years", ask for the policy name and check it against the Commission's list.

Statutory warranties have not changed. Under the Home Building Act 1989 you have 6 years from completion to claim for a major defect (structure, fire safety, waterproofing) and 2 years for anything else, with an extra 6 months if the defect surfaces in the last 6 months of the period. For a strata scheme, completion is the date of the occupation certificate, so a resale in a building completed in 2020 is at or past the end of its major-defect warranty. Our guide to buying off the plan in 2026 covers sunset clauses and tax, and the checks in our builder insolvency guide apply to an apartment developer's builder too.

Building Commission NSW's powers widened. The same 2026 Act stops private certifiers escaping disciplinary action by surrendering their registration, and lets both regulators refuse applications or cancel licences obtained through misrepresentation, error or invalid qualifications. Most of the Act's provisions commence on proclamation.

The costs in 2026: levies, insurance and fees

No agency publishes an average NSW strata levy, and the per-quarter ranges on strata company websites are marketing, so this guide does not quote one. Nor is there a published average strata insurance premium per lot that stands up to checking. These four are documented.

The insurance picture is two-speed: broker outlooks in 2026 describe claim-free, well-maintained buildings getting relief while schemes with unresolved defects, cladding or stale valuations do not, so an average would tell you little about the building in front of you. The Emergency Services Levy is the variable to watch. The Premier has committed since 2023 to replacing it with a property-based levy, a parliamentary select committee reports later in 2026, the election is in March 2027, and Treasury modelling reported by the ABC puts the saving for an average insured household at $308 a year. Until then it sits inside every strata premium, and our guide to the home insurance affordability crisis explains why standalone houses are moving faster.

On levies, a suspiciously low first-year levy on a 2026 registration is now a compliance question rather than a sales tactic. If the capital works plan and the fund balance do not reconcile, the levy you are quoted is not the levy you will pay.

Frequently asked questions

Can I get out of the contract if the strata report is bad?

Only within the cooling-off period, or if the contract gives you a condition. For a private treaty sale in NSW you have 5 business days from exchange (10 business days for an off-the-plan contract), ending at 5pm on the last day, and withdrawing costs 0.25% of the purchase price ($2,500 on a $1 million apartment). There is no cooling-off period at auction or on auction day after a pass-in, and a section 66W certificate waives it at a private sale. So order the strata report before exchange.

Are pets allowed in NSW strata by default?

Effectively yes. A by-law that bans all pets is invalid, and Fair Trading's guidance (updated 22 June 2026) says bans based on size, type or number will not be valid in most circumstances. An owners corporation can only refuse an animal that causes unreasonable interference: persistent noise, attacks, damage, a health risk or odour, or a dog declared dangerous or restricted under the Companion Animals Act 1998.

Does the new committee training affect me as a buyer?

Indirectly. From 1 October 2026 anyone appointed or re-elected to a strata committee must complete Fair Trading's free one-hour online course within 3 months or automatically cease to be a member. Members appointed before that date are not caught until their next appointment. Over a year or two it should raise the floor on decisions about budgets and repairs.

Does the 3% building bond apply to a building I buy in 2026?

No. The bond is 2% for any building whose bond is lodged before 1 July 2028. Nor does decennial liability insurance cover a building unless the developer chose it instead of the bond, and only one policy was on Building Commission NSW's list at 28 August 2026.

What to do now

Order the strata report before you exchange and read it against the April 2026 changes, not the pre-reform template. Check the capital works plan is on the standard form. Ask for the insurance quote breakdown. Search the scheme on the public Strata Hub and note the AGM and reporting dates. For a building registered since 2018, ask about the bond and the inspection reports. If the building is older, three years of AGM minutes will tell you more than the report's summary page: search them for waterproofing, cladding, rectification, bond and special levy.

Buyers who want that work done professionally can use GoMatch to find a buyer's agent who reads strata records for a living; our guide to finding a buyer's agent in Sydney explains what to look for. The reforms have made the paperwork more honest. They have not made reading it optional.

Sources

1. NSW Fair Trading, "Changes to strata laws", updated 25 August 2026.
2. NSW Fair Trading, "Guide to strata law changes for strata committees and owners", updated 25 August 2026.
3. NSW Fair Trading, "Strata committee training", accessed 7 September 2026.
4. NSW Fair Trading, "Strata annual reporting" (updated 25 August 2026) and "Strata Hub" (updated 10 August 2026).
5. NSW Fair Trading, "Help if you can't pay your strata levies", updated 27 October 2025.
6. NSW Fair Trading, "Pets" (strata living), updated 22 June 2026.
7. NSW Fair Trading, "Contracts and deposits when buying property in NSW" and "Buying property off the plan", accessed 7 September 2026.
8. Building Commission NSW, "Ten-year defect insurance for apartment buildings", updated 28 August 2026.
9. Building Commission NSW, "Update on amendments to building regulations", 26 June 2026.
10. Building Commission NSW, "Strata Building Bond and Inspections Scheme", accessed 7 September 2026.
11. Building Commission NSW and Strata Community Association NSW, "Strata Defects Research Report 2025", including the 2025 Strata Defects Survey infographic, published 1 November 2025.
12. NSW legislation, Strata Schemes Management Act 2015 No 50, sections 50 and 85 and Part 11, current version, accessed 7 September 2026.
13. NSW legislation, Home Building Act 1989 No 147, sections 3C and 18E, current version, accessed 7 September 2026.
14. NSW legislation, Strata Managing Agents Legislation Amendment Act 2024 No 65 and Strata Schemes Legislation Amendment Act 2025 No 14, accessed 7 September 2026.
15. NSW Government, ministerial release, "Strata and Property Taskforce delivers 'high-rise' in compliance during first year", 5 July 2026.
16. NSW Government, ministerial release, "Minns Labor Government lays final legislative groundwork for 10-year defects insurance for apartment buildings", 6 August 2026.
17. NSW Government, ministerial release, "New legislation to improve confidence in building, property and conveyancing sector", 5 February 2026.
18. NSW Productivity and Equality Commission, "Review of market impacts of prohibiting strata managers from accepting commissions and other conflicted remuneration", report delivered 27 February 2026, page updated 24 March 2026.
19. Strata Community Association NSW, "Submission on draft guidelines for mandatory strata committee member training", 23 February 2026.
20. Owners Corporation Network, "Strata owners back call to ban conflicted payments following landmark report", 24 March 2026.
21. Holding Redlich, "A step closer to decennial liability insurance", 19 August 2026.
22. Kreisson, "The Pulse", 20 August 2026.
23. ABC News, "Calls to scrap NSW emergency services levy as insurance costs rise", 4 August 2026.
24. LookUpStrata, "NSW review of strata insurance commissions", 24 November 2025.