Insight
Strata law in NSW: a guide for owners, committees and managers
18 Jul 2026
Strata is a shared ownership structure — you own your lot, and you jointly own the common property with every other owner in the scheme. In New South Wales, roughly one in four residents lives in strata, and the legal framework touches everything from pet by-laws to multi-million dollar defect claims.
This guide covers the parts of NSW strata law that most often surface in practice: how the owners corporation and strata committee work, what levies can be raised, who repairs what, how by-laws bind occupants, and how disputes end up at NCAT.
The legal framework
Two main statutes govern NSW strata: the Strata Schemes Management Act 2015 (which deals with how a scheme is run) and the Strata Schemes Development Act 2015 (which deals with how a scheme is created, subdivided, and terminated). Both are administered by NSW Fair Trading and the Registrar-General.
Every lot owner is automatically a member of the owners corporation. The owners corporation owns and manages common property, sets and collects levies, maintains insurance, and enforces by-laws. It acts through general meetings and — day to day — through the elected strata committee.
The strata committee and the managing agent
The strata committee is elected at each AGM and can have up to nine members. Its role is to make routine decisions on behalf of the owners corporation, but its powers are limited: it cannot fix or amend by-laws, cannot approve most alterations to common property, and cannot decide matters the owners have reserved to a general meeting.
Most schemes appoint a licensed strata managing agent. The agent's authority comes from a written agency agreement and can be revoked at any general meeting. Strata managing agents owe fiduciary duties to the owners corporation — including disclosure of commissions and conflicts of interest under section 60 of the Act.
Levies and the two funds
Every NSW scheme runs two funds:
- Administrative fund — day-to-day operating costs: insurance, cleaning, utilities, minor repairs, agent's fees.
- Capital works fund (formerly the sinking fund) — longer-term expenditure: painting cycles, roof replacement, lift refurbishment. A ten-year capital works plan must be prepared and reviewed at least every five years.
Levies are struck at the AGM in proportion to unit entitlement. Special levies for unbudgeted major work must be approved by the owners in general meeting — the committee cannot impose a special levy on its own.
By-laws
Every scheme has a set of by-laws that regulate use of the lot and common property. Since the 2016 reforms, the model by-laws in Schedule 3 of the regulation apply by default until the owners corporation adopts its own.
A by-law must be passed by a special resolution (at least 75% of votes cast) at a general meeting, and lodged with NSW Land Registry Services within six months to take effect. By-laws that are "harsh, unconscionable or oppressive" can be struck out by NCAT under section 150 — which is the regular fate of blanket pet bans, absolute rental prohibitions, and restrictive short-term letting rules.
Repairs: who fixes what
The owners corporation has a strict duty under section 106 to maintain and repair common property. This is a duty of result, not a duty to try — if common property is damaged and not repaired, the owners corporation is liable for consequential loss (including rent lost while a lot is uninhabitable). Common property in a standard strata plan typically includes:
- External walls, roof, and structural slabs.
- Waterproofing membranes to balconies, bathrooms and roofs.
- Window frames and external glazing.
- Plumbing and electrical services up to the point of entry to the lot.
Lot owners are responsible for internal fit-out, kitchen and bathroom fixtures, floor coverings, and any alterations they have installed. The exact line depends on the registered strata plan — always check the plan before assuming.
Building defects in new buildings
Owners corporations of buildings completed after 1 July 2020 have significant additional protection under the Design and Building Practitioners Act 2020 and the Residential Apartment Buildings (Compliance and Enforcement Powers) Act 2020. Key features:
- Developers, builders and designers owe a statutory duty of care to owners corporations for economic loss caused by defective building work.
- The NSW Building Commissioner can issue stop-work, prohibition and rectification orders.
- Class 2 buildings must have a "building manual" handed over on completion.
The DBP Act duty applies retrospectively to work completed within the previous ten years, which has significantly expanded owners corporation claims against consultants and subcontractors.
Meetings, voting and quorum
The AGM must be held within one month of the anniversary of the first AGM. Notice of at least seven days is required, including motions and any proposed by-laws. A quorum is 25% of persons entitled to vote (measured by number, not by unit entitlement).
Voting can be a show of hands, poll, secret ballot, or — increasingly — electronic vote under the digital meeting provisions introduced in 2021 and expanded in the 2025 review. Special resolutions require no more than 25% of votes cast against; unanimous resolutions require no votes against at all.
Short-term letting and Airbnb
NSW's short-term rental accommodation (STRA) framework caps non-hosted letting at 180 days per year in Greater Sydney (and some regional council areas). A scheme can also pass a by-law prohibiting short-term letting in lots that are not the host's principal place of residence — but only if the by-law is passed by special resolution and complies with the STRA planning rules.
Disputes and NCAT
Most strata disputes must go through Fair Trading mediation first, then to NCAT's Consumer and Commercial Division. NCAT can:
- Order an owners corporation to carry out repairs.
- Revoke or vary an unfair by-law.
- Order payment of unpaid levies plus interest.
- Appoint a compulsory strata manager where the scheme is dysfunctional.
Larger claims — particularly building defect claims exceeding NCAT's jurisdictional limits — belong in the District or Supreme Court of NSW.
Practical points for committees
- Keep meeting minutes and financial records for at least seven years — they must be available to any owner on request.
- Insure for full replacement value, not indemnity value, and review the sum insured annually.
- Get legal review of any proposed by-law before circulating it — NCAT sets aside a lot of home-drafted by-laws.
- Treat the capital works plan as a living document, not a filing-cabinet exhibit.
Getting it right
Strata law is deceptively technical: a small procedural mistake at an AGM can invalidate a levy, and a poorly drafted by-law can be unenforceable from day one. Envision Legal advises owners corporations, strata committees and individual lot owners on by-laws, defects, disputes and governance across NSW.
This article contains general information only and does not constitute legal advice. Envision Legal accepts no liability for any loss arising from reliance on this content. You should seek independent legal advice tailored to your specific circumstances.
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Frequently asked questions
- What law governs strata schemes in NSW?
- The Strata Schemes Management Act 2015 (NSW) and Strata Schemes Development Act 2015 (NSW), together with regulations made under each. NSW Fair Trading administers the scheme and NCAT (the NSW Civil and Administrative Tribunal) hears most disputes.
- Can the owners corporation force me to remove a pet?
- Generally no. Since the 2021 amendments, by-laws that impose a blanket ban on pets are unenforceable. An owners corporation can only refuse a pet if keeping it would unreasonably interfere with another occupant's use and enjoyment of their lot or common property.
- Who is responsible for waterproofing and window defects?
- Waterproofing membranes, external walls, roofs and window frames are almost always common property in a standard NSW strata plan, which makes them the owners corporation's responsibility to repair. Interior finishes and non-structural fit-out are usually the lot owner's.
- How much notice is required for an AGM?
- At least seven days' written notice must be given for a general meeting of the owners corporation, including the agenda, motions and any proposed by-law changes. The notice must go to each lot owner and any registered mortgagee.
- Can the strata committee spend money without owner approval?
- The committee can make most day-to-day decisions on behalf of the owners corporation, but it cannot decide matters that are reserved to a general meeting — including setting levies, unbudgeted major expenditure, altering common property, or making a by-law.