The NSW Government is currently reviewing the STRA regulations in response to rising rents and housing shortages. While no concrete legislative changes have been enacted for 2025 as of this date, the following key areas are under serious consideration:

What’s Changing in 2025? (Proposed Changes Under Review)

1. Potential Reduction of the 180-Night Cap

1. • A key area of review is the statutory 180-night annual limitation for non-hosted STRA within Greater Sydney. A reduction in this cap, potentially to 90 nights per annum, is being seriously contemplated.
   • Proposals for even more restrictive limits, such as a 60-night cap as advocated by certain local councils (e.g., Byron Bay), may influence broader legislative changes or empower further local council action.

2. Tougher Enforcement and Penalties

1. • The government is considering the implementation of more stringent enforcement mechanisms and increased financial penalties for non-compliance with STRA regulations. This includes, but is not limited to, failure to register, exceeding permissible nightly limits, and breaches of fire safety standards.
   • An increase in proactive compliance audits is also anticipated, potentially increasing the risk for unregistered or non-compliant STRA operations.

3. Enhanced Local Council Regulatory Powers

• • A potential outcome of the current review is the conferral of greater discretionary authority upon local councils to determine and enforce STRA limitations within their respective local government areas.

1. • This could result in significant variations in STRA regulations across different regions, potentially ranging from outright prohibitions in specific zones to more permissive frameworks in others.

4. Consideration of New Levies on STRA Properties

1. • The introduction of a new levy or tax specifically targeting STRA properties is under active consideration by policymakers. This approach mirrors recent developments in other jurisdictions, such as Brisbane’s implementation of differential council rating for STRA properties.
   • The primary policy objective of such a measure is to incentivise the return of properties to the long-term residential rental market.

Implications for Strata Schemes and Lot Owners

The proposed amendments to STRA legislation carry significant implications for strata schemes and individual lot owners:

• Potential Impact on Investment Returns: Stricter nightly caps, particularly for non-hosted STRA, may directly reduce the revenue-generating potential of affected properties.
• Increased Compliance Burdens: More rigorous enforcement and potentially enhanced safety requirements could lead to increased operational costs for STRA hosts.
• Regulatory Uncertainty: The prospect of divergent STRA regulations across different local council areas may introduce complexity and uncertainty for owners with properties in multiple locations.
• Diminished Profitability: The imposition of new taxes or levies would directly impact the financial viability of STRA ventures.
• Differential Impact on Hosted STRA: Properties operating under a hosted model are likely to be less directly affected by the anticipated changes primarily targeting non-hosted arrangements.

Recommendations for Strata Schemes and Lot Owners

Given the dynamic nature of STRA regulations in NSW, it is imperative for owners corporations and lot owners to:

• Remain Vigilant: Continuously monitor official announcements and legislative updates issued by the NSW Government regarding STRA.
• Assess Investment Strategies: Evaluate the potential impact of the proposed amendments on existing and prospective STRA investments.
• Ensure Full Regulatory Compliance: Conduct thorough audits to verify adherence to current registration requirements, fire safety standards, and any applicable local council regulations.
• Engage with Legal Counsel: Seek expert legal advice from strata law specialists to understand the implications of the evolving legal landscape and to ensure ongoing compliance.
• Consider By-law Amendments: Owners corporations may need to review and potentially amend their strata by-laws in response to legislative changes or local council policies.

The anticipated amendments to NSW STRA legislation in 2025 signify a potentially significant shift in the regulatory environment. Proactive engagement with legal counsel and a commitment to staying informed are crucial for navigating these changes effectively and safeguarding the interests of strata communities and individual lot owners.

Easter 2025 and STRA Peak Period: Don’t Let Outdated STRA By-Laws Catch You Out.

Is your strata community prepared for the Easter short-term rental surge? Outdated by-laws can lead to disputes and compliance issues.

IS YOUR STRA BY-LAW UP TO DATE – DO YOU NEED A REVIEW?

Adrian Mueller I BCOM LLB FACCAL I Partner

Since 2002 Adrian has specialised almost exclusively in the area of strata law. His knowledge of, and experience in strata law is second to none. He is the youngest person to have been admitted as a Fellow of the ACSL, the peak body for strata lawyers in Australia. Profile I Linked

Contact Us

For all strata law advice including by-laws, building defects and levy collections contact our specialist NSW and Sydney strata lawyers here or call 02 9562 1266, we’re happy to assist.

Introduction

The property development industry has become more astute in recent years.  This has resulted in property developers putting in place corporate structures that are intended to protect their assets.  This often results in owners corporations being unable to recover compensation from developers to cover the costs to fix defects that affect their buildings.  So what can be done to avoid that problem?

In this article we take a look at a recent case in which an owners corporation represented by JS Mueller & Co succeeded in convincing the Supreme Court to make a freezing order against a developer to prevent the developer dissipating its assets to ensure that the developer would have sufficient assets to pay any compensation the owners corporation was awarded by the Court to cover the cost to fix building defects.

The Facts

There is a mixed use building in Milsons Point, Sydney containing 125 residential lots and 2 commercial lots.  The building was completed in July 2021.  Since August 2021, the developer has been selling the residential lots in the ordinary course.  The developer has now sold 121 of the 125 residential lots.  The developer still owns 4 of the residential lots. They are effectively the developer’s only assets.

The building contains defects.  The owners corporation has sued the developer in the Supreme Court for damages arising out of those defects.  In the case, the owners corporation has obtained evidence from a quantity surveyor to the effect that the estimated cost to rectify the defects is in the order of $10.6 million.

The Problem

The owners corporation became concerned that the developer’s only assets were the four residential lots that it owned in the building and that once those lots were sold, the sale proceeds would be dissipated and the developer would have no assets left to pay any damages the owners corporation was awarded by the Court.  That would have rendered to the continuation of the court case against the developer pointless.

Application for Freezing Order

In November 2024 the owners corporation applied to the Supreme Court for a freezing order to be made against the developer.  The purpose of that order was to prevent the developer from disposing of its assets up to the value of $10.6 million being the amount of the owners corporation’s claim.  The developer resisted the application for the freezing order and argued that there was no basis for the Court to make that order.

The Decision

On 6 February 2025 the Supreme Court published its decision in which it concluded that it was appropriate for a freezing order to be made against the developer generally in the terms sought by the owners corporation.  The Court was persuaded that there was a danger that any damages that were awarded to the owners corporation would be wholly or partially unsatisfied because the developer might dispose of its assets once it sells the remaining 4 lots in the building that it still owns.  The Court concluded that it was likely that the developer would sell those 4 lots in the future and that it would distribute the profit generated by the sale of the those lots either by way of dividend or as a loan to other members of its corporate group.  This was consistent with the way in which the developer had dealt with the proceeds of sale of other lots it had sold in the development.

Conclusion

The case shows that an owners corporation that is concerned that a developer against whom it has made a claim for damages arising from building defects can take steps to protect its interests and ensure that the developer does not dissipate its assets to avoid having to pay damages to the owners corporation.  The case shows that the Supreme Court will make freezing orders against developers in appropriate circumstances to safeguard the position of owners corporations who are at risk of being left with nothing if the developers of their strata schemes are able to deal with their assets without restraint.

Case citation: The Owners – Strata Plan No. 102081 v Aqualand Constructions Pty Ltd [2025] NSWSC 31

Adrian Mueller I BCOM LLB FACCAL I Partner

Since 2002 Adrian has specialised almost exclusively in the area of strata law. His knowledge of, and experience in strata law is second to none. He is the youngest person to have been admitted as a Fellow of the ACSL, the peak body for strata lawyers in Australia. Profile I Linked

Contact Us

For all strata law advice including by-laws, building defects and levy collections contact our specialist NSW and Sydney strata lawyers here or call 02 9562 1266, we’re happy to assist.

A Second Phase of Reform

New South Wales is gearing up for significant changes in strata law, as the second phase of recommendations from the statutory review is set to be implemented. The proposed changes, introduced to the NSW Parliament on 20 November, 2024, aim to address a range of issues affecting strata communities across the state.

Key Proposed Changes

While specific details may vary, the proposed changes are expected to cover a broad spectrum of areas, including:

Accountability for Developers

• Enhanced Developer Responsibility: Developers will be held more accountable for the accuracy of initial maintenance schedules and levy estimates provided for new strata developments.

Improved Strata Management

• Stricter Oversight: Increased oversight of strata management agreements to ensure transparency and fairness.
• Building Manager Duty: Introduction of a statutory duty on building managers to uphold specific obligations.

Protecting Owners’ Rights

• Fair Contract Terms: Safeguarding owners corporations from unfair contract terms in standard form contracts.
• Stronger Committee Governance: Imposing new duties on strata committee members to improve governance and decision-making.
• Common Property Maintenance: Reinforcing owners corporations’ obligations to maintain and repair common property.
• Enforcement Powers: Granting NSW Fair Trading additional powers to enforce common property maintenance obligations.

Sustainability and Accessibility

• Sustainability Focus: Encouraging sustainable practices by requiring owners corporations to consider sustainability in annual general meetings and levy estimates.
• Embedded Network Protections: Enhancing protections for owners and owners corporations regarding embedded networks.
• Accessibility Improvements: Facilitating the installation of support infrastructure for owners with additional needs.

 Other Enhancements

• Clarity and Efficiency: Implementing various changes to streamline strata law processes and improve clarity.
• Financial Hardship Support: Providing assistance to owners facing financial difficulties.

Impact on Strata Owners and Committees

These proposed changes are likely to have a significant impact on both strata owners and committees. Strata owners can expect increased protection and greater involvement in decision-making processes. Strata committees, on the other hand, may face additional responsibilities and regulatory requirements.

What’s Next?

As the proposed changes progress through the legislative process, it’s crucial for strata managers, strata owners and committees to stay informed. By understanding the implications of these reforms, you can better prepare for the future and ensure the smooth functioning of your strata communities.

More Information

For more information and insights on the proposed strata law changes visit NSW Government changes to strata laws

Adrian Mueller I BCOM LLB FACCAL I Partner

Since 2002 Adrian has specialised almost exclusively in the area of strata law. His knowledge of, and experience in strata law is second to none. He is the youngest person to have been admitted as a Fellow of the ACSL, the peak body for strata lawyers in Australia. Profile I Linked

Contact Us

For all strata law advice including by-laws, building defects and levy collections contact our specialist NSW and Sydney strata lawyers here or call 02 9562 1266, we’re happy to assist.

NSW Fire and Rescue (FRNSW) continues to grapple with a concerning surge in e-bike and e-scooter fires, with at least five incidents per week in NSW linked to lithium-ion batteries.

A recent fire at an inner Sydney e-bike shop, resulting in the evacuation of an entire apartment block, underscores this alarming trend.

FRNSW emphasizes the need for increased awareness and education regarding the safe selection, use, charging, storage, and disposal of lithium-ion batteries to minimize the risk of fires.

Key Safety Tips

• Never leave charging devices unattended: Avoid sleeping or leaving your home while lithium-ion batteries or powered devices are charging.
• Disconnect chargers: Unplug chargers once batteries are fully charged.
• Avoid hazardous storage: Keep batteries away from exits and flammable materials.
• Proper disposal: Do not dispose of batteries in regular trash or recycling bins.
• Recycling: Take used lithium-ion batteries to nearby BCycle battery recycling drop-off points.
• Buy reputable brands: Purchase batteries and chargers from trusted sources.
• Avoid mixing components: Do not combine batteries or chargers from different brands.
• Implement a by-law: Owners corporations should adopt an e-bike/e-scooter by-law to manage resident safety and mitigate fire risks.
• For more information, visit FRNSW Lithium-ion Battery Safety.
• In case of a fire, evacuate immediately and call 000.

A By-law Can Proactively Safeguard Your Strata Community

By implementing a well-crafted by-law, Owners Corporations can significantly reduce the risk of e-vehicle fires and establish clear guidelines, including:

• Protection for owners corporations in case of battery fire incidents
• Safe charging practices for lithium-ion batteries
• Restrictions on battery types to ensure safety
• Proper disposal procedures to prevent hazards
• Registration and storage requirements for e-vehicles
• Resident education for e-vehicle safety

We strongly recommend implementing an e-vehicle by-law for e-bikes, e-scooters, and other e-vehicles, especially as warmer weather approaches and more residents use these modes of transportation.

GET YOUR E-BIKE / E-SCOOTER BY-LAW HERE NOW!

Adrian Mueller I BCOM LLB FACCAL I Partner

Since 2002 Adrian has specialised almost exclusively in the area of strata law. His knowledge of, and experience in strata law is second to none. He is the youngest person to have been admitted as a Fellow of the ACSL, the peak body for strata lawyers in Australia. Profile I Linked

Contact Us

For all strata law advice including by-laws, building defects and levy collections contact our specialist NSW and Sydney strata lawyers here or call 02 9562 1266, we’re happy to assist.

Short-term Rental Policies Under Review

As the NSW Government grapples with the housing crisis across the state short-term rental accommodation (STRA) comes under the spotlight.

Policies and framework for STRA in NSW will be reviewed with the hope to unlock the supply of long-term and affordable accommodation.

As such, the NSW government is looking for community feedback on the recently released discussion paper which will form part of the comprehensive review of NSW STRA.

Have Your Say…

• Complete the survey
• STRA discussion paper
• Further information

The survey completion deadline is 14 March 2024.

Review Your STRA By-laws

Do you need to review or update your current short-term rental accommodation (STRA) by-law? Speak to the STRA experts today!

Adrian Mueller I BCOM LLB FACCAL I Partner

Since 2002 Adrian has specialised almost exclusively in the area of strata law. His knowledge of, and experience in strata law is second to none. He is the youngest person to have been admitted as a Fellow of the ACSL, the peak body for strata lawyers in Australia. Profile I Linked

Contact Us

For all strata law advice including by-laws, building defects and levy collections contact our specialist NSW and Sydney strata lawyers here or call 02 9562 1266, we’re happy to assist.

Keeping a pet in some strata schemes can be costly when schemes charge an additional fee or bond for the joy of having a pet!

The good news is that the NSW Government as part of the reform has labelled these fees and bonds as being costly, unreasonable, and unnecessary as lot owners already pay levies.

Owners already pay for the upkeep of their strata schemes including the cost of insurance to cover damage to common areas as part of their levies.

The reform is part of phase one of the NSW Government’s review to ensure we have a more transparent and fairer strata system.

This week the NSW Government will move forward on critical reforms implementing changes to ensure the system is fairer and transparent… https://www.nsw.gov.au/media-releases/critical-reforms-to-strata-laws

So, will there be a blanket ban on pet fees and bonds under the reforms for strata laws governing community living arrangements?

ARE YOUR PET BYLAWS CURRENT? DO YOU NEED A REVIEW?

Adrian Mueller I BCOM LLB FACCAL I Partner

Since 2002 Adrian has specialised almost exclusively in the area of strata law. His knowledge of, and experience in strata law is second to none. He is the youngest person to have been admitted as a Fellow of the ACSL, the peak body for strata lawyers in Australia. Profile I Linkedin

Contact Us

For all strata law advice including by-laws, building defects and levy collections contact our specialist NSW and Sydney strata lawyers here or call 02 9562 1266, we’re happy to assist.