Starting on 3 February 2025, new laws in NSW will change the way strata managing agents are required to disclose information to owners corporations. These changes are designed to increase transparency and ensure that disclosures are made on time.
Let’s break down the key changes and what you need to know.
What’s Changing?
The new laws will require strata managing agents to provide more detailed information to owners corporations about their services and relationships.
Key Changes to Disclosure Obligations
Here’s a summary of the key changes that you need to know:
1. Before Your Appointment
You will now be required to disclose more information to an owners corporation before you are hired. This includes:
- Disclosing any relationships you have with suppliers you regularly work with, along with details of the relationship.
- If you have advised a building’s developer about strata plans or community land schemes in the last two years, you will need to disclose this.
2. During Your Appointment
Once you are appointed as a strata managing agent, there are additional disclosure requirements, including:
Commissions and Training Services Approval
- If you receive any commissions and/or training services that are not already included in your agency agreement, you will need to submit a motion at an owners corporation’s general meeting.
- You will also need to include a written explanation on why these services are in the best interest of the owners corporation, including commission details.
- If the owners do not approve, you will not be able to receive the commission or training service.
Upfront Disclosures
- As soon as you become aware of any new connections or interests relating to the strata scheme—such as working with new service providers or buying property within the scheme—you must inform the owners corporation in writing.
Disclosures at AGMs
- At AGMs, you will need to provide detailed information about your connections with suppliers or the building’s developers (whether past or current) and disclose any commissions or training services you have received or expect to receive. If not previously approved, these must be approved by the owners corporation before you can accept them.
Insurance Requirements
- You will need to provide clearly itemised insurance quotes, including commissions and broker fees.
- If the owners corporation arranges its own insurance independently, you will no longer be able to receive a commission for this.
Penalties for Non-Compliance
Failure to comply with these new disclosure requirements could result in significant penalties:
- Up to $55,000 for corporations
- Up to $11,000 for individuals
- If you fail to comply with the rules of conduct under the Property and Stock Agents Act, fines of up to $110,000 for corporations could be applied.
What Should You Do?
To prepare for the upcoming changes, you should review your current practices to ensure full compliance with the new requirements before they take effect on 3 February 2025.
For further details, visit the NSW Fair Trading website.
