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The proposal aims to “help restore confidence in living and investing in strata schemes”.
New legislation is focused on ending secret kickbacks on insurance policies and “weeding out bad players”, following the revelation of the Netstrata scandal earlier this year.
Minister for Better Regulation and Fair Trading, Anoulack Chanthivong, expressed that “these reforms are critical to supporting confidence in investing and living in strata schemes”.
Prior to the law’s introduction to NSW Parliament, a consultation process took place, with key stakeholders such as the Owners Corporation Network and Strata Community Association.
Once enacted, the reforms will enforce greater conflict-of-interest disclosure requirements for strata management agents, and increase the “maximum penalties and penalty infringement notice amounts” around agents’ duty to disclose information around commissions.
The new law will also strengthen NSW Fair Trading’s enforcement and compliance powers, and will enable the organisation to ban agents from receiving a commission from insurance products when they have not played a role in “finding the best deal for residents”.
In the five years to 2023, NSW Fair Trading received over 965 complaints about strata agents, with more than half of these submissions concerning “rules of conduct or budgets, levies and finances”.
The state government described the reforms as helping to build confidence in the sector, following the $8.4 million investment into more resources for the Strata and Property Services Commissioner outlined in the 2024 budget.
Speaking on these efforts, Chanthivong relayed the new law “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”.
“Building more high quality, higher density housing is a key pillar of the NSW government’s comprehensive plan to build a better NSW,” he concluded.
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