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Why You Should Check Whether Your Strata Scheme Has Complied with New Reporting Requirements if You’re Buying or Selling Property

By 14 August 2023Property Law
Why you should check whether your strata scheme has complied with the new reporting requirements if you're buying or selling property

Designed to enhance transparency and accountability in the strata management sector, NSW Fair Trading launched the NSW Strata Hub online portal on April 1, 2023. The portal’s purpose is to streamline reporting obligations for strata management companies and create a more efficient and accessible system for managing strata schemes.

The online portal followed the implementation of the Strata Schemes Management Amendment (Information) Regulation 2021 (‘Information Regulation’), introduced to address long-standing issues in the strata management sector, including inadequate reporting, lack of transparency, and the challenges faced by owners in accessing vital information about their strata schemes.

The hub is also designed to improve monitoring of maintenance and defect management in more than 83,000 strata buildings across NSW.

Under the new regulation, strata management companies were mandated to submit comprehensive reports on their clients’ strata schemes by December 31, 2022. These reports provided crucial financial data, operational details, and other relevant information for the purpose of creating a centralised database of strata scheme information accessible to owners, tenants, and other stakeholders (including local council and emergency services).

These stakeholders plus other authorised individuals are able to log in to the portal to securely view essential information such as financial statements, meeting minutes, maintenance schedules, and insurance details.

Other key information entered on the portal includes:

  • Strata plan number and address;
  • Number of lots;
  • Classification as residential, commercial or mixed use, for example;
  • Contact details for the strata committee, strata managing agent, building manager, etc;
  • Date of most recent annual general meeting;
  • Cash balance held within the capital works fund (updated annually);
  • Due date for annual fire certification; and
  • Insurance replacement value.

Deadline for compliance

NSW Fair Trading set a final deadline of June 30, 2023 for all strata schemes within the state to comply with the regulation. The introduction of this grace period was designed to allow strata schemes extra time to gather and organise their data to make the transition to the NSW Strata Hub effective. Non-compliant schemes face potential penalties and restrictions until they fulfil their reporting obligations – these are not intended to be punitive but to encourage compliance for overall improvement of the strata industry in NSW.

For those buying or selling a property within a strata scheme, it’s important to consider whether the scheme has complied with the regulation. Those schemes that embraced the new reporting system have provided confidence for owners, tenants, and prospective buyers, and easier access to financial records so that owners have sight on how strata levies are employed for greater financial accountability.

An additional claimed benefit is improved communication between strata managers and owners, with prompter responses to queries and concerns on issues such as property maintenance and improvement, and faster dispute resolution.

Administration and enforcement of the new portal is funded through a lodgement fee of $3 per lot (GST exclusive) with the strata scheme’s annual report, inclusive of parking and other utility lots if they are deemed to be separate lots for levy contributions. The fee will need to be included in the scheme’s annual budget as an ongoing compliance cost.

Seek expert advice if unsure

At Felicio Law Firm, helping both buyers and sellers with the complexities of strata schemes is one of our specialities. If you have questions or concerns about a strata scheme’s compliance with the requirements of the NSW Fair Trading’s Strata Hub online portal, contact us today for a discussion about how we can help.