NSW strata manager penalties: what February 2025 changed.

What the new disclosure regime requires

The Act introduces a comprehensive overhaul of the disclosure obligations of strata managing agents — codified across the Strata Schemes Management Act 2015 (SSMA), the Community Land Management Act 2021 (CLMA), and the Property and Stock Agents Act 2002. The intent, in the words of NSW Minister for Better Regulation and Fair Trading Anoulack Chanthivong, is to ensure "owners have confidence in their strata manager" in a sector where confidence has eroded over years of opaque commission practices.

Under the new regime, strata managers in NSW must:

Disclose all supplier and developer connections. Strata managers must declare any commercial, personal, or familial relationship with suppliers — including insurance brokers, contractors, and developers. This applies before any contract is entered into on behalf of the owners corporation, and is an ongoing obligation if relationships change during an appointment.

Provide detailed insurance quote breakdowns. Insurance quotes presented to the owners corporation must be itemised to show all commissions, broker fees, and ancillary costs. The historical practice of presenting an all-in premium without showing the manager's commission embedded inside it is no longer permitted.

Report new conflicts in real time. If a new commercial relationship or financial interest arises during the manager's appointment — for example, taking on a new supplier as a client across multiple schemes — that interest must be disclosed to each affected owners corporation without delay.

Hand over scheme records every six months. A new obligation introduced by the broader Strata Schemes Legislation Amendment Act 2025 (which followed in March 2025) requires managers to provide records of how they have exercised their functions on behalf of the owners corporation twice each year.

How the penalty regime works

The Act significantly raises the financial stakes for non-compliance. Maximum penalties were lifted to 500 penalty units for corporations and 100 penalty units for individuals — applicable per breach. In NSW, one penalty unit is currently $110, putting the maximum exposure per offence at $55,000 for a corporation and $11,000 for an individual. Where breaches are systemic across multiple schemes or repeated over time, the cumulative exposure can quickly exceed six figures.

The penalty regime applies to obligations including:

The duty not to request or accept gifts or benefits from third parties for the manager's own benefit or for the benefit of related persons. The duty to disclose all material information about contracts entered into for the owners corporation. The duty to provide records on the owners corporation's reasonable request. The duty to act in the owners corporation's best interests at all times unless that would be unlawful.

What this means for owners corporations and committees

For owners corporations, the new regime fundamentally changes the negotiating dynamic with strata managing agents. Three practical implications stand out.

You are entitled to itemised insurance disclosure. If your manager provides insurance quotes that do not break out their commission, that is now a compliance issue, not a polite request. Committees can — and should — ask for the itemisation in writing.

You are entitled to know about every supplier relationship. If your manager regularly engages the same three trades or the same insurance broker, you can now formally ask whether those relationships are commercial. The manager is legally required to disclose.

You should keep documented records of all manager interactions involving contractor selection. If a manager later faces a Fair Trading investigation, the owners corporation's contemporaneous records become part of the evidentiary picture. Schemes that document contractor decisions in real time are in a substantially stronger position than schemes that rely on the manager's own files.

Why this is happening now

The Act did not emerge from nowhere. It followed years of public scrutiny culminating in the 2024 ABC Four Corners investigation into strata commission practices, sustained advocacy from groups including the Owners Corporation Network (OCN), and a series of parliamentary submissions documenting owner-corporation experiences of opaque manager-supplier relationships.

The reform also sits within a broader national direction. In Queensland, the BCCM regulation modules tightened commission disclosure in March 2021 to require disclosure of the actual monetary amount of any commission, not just a generic percentage. The Insurance Council of Australia has called on Victoria for similar reforms. The direction of travel across every Australian strata jurisdiction is consistent — and accelerating.

How verified documentation helps

The single biggest operational change required by the new regime is documentation. Managers must be able to produce, on request, records that demonstrate compliance with their disclosure duties. Owners corporations, in turn, are best served when that record is kept systematically as decisions are made, rather than assembled after the fact.

StrataTrade is built to keep that record. Every quote received from a verified trade, every recommendation made, and every committee decision is kept permanently on the building's record. The manager reviews the quotes, makes a recommendation, and shares them with the committee — and when a manager needs to demonstrate compliance with their disclosure duties, the record is there to produce.

Frequently asked questions

Does this apply to existing strata management agreements?

The disclosure obligations apply to all current strata managing agents in NSW from 3 February 2025, including those operating under contracts entered into before that date. There is no grandfathering of pre-existing arrangements.

Are building managers covered by the same penalties?

Building and facilities managers are subject to similar statutory duties introduced by the Strata Schemes Legislation Amendment Act 2025, which took effect progressively from March 2025. Specific obligations and penalties differ slightly but mirror the strata manager regime.

Where can I report a suspected breach?

Suspected breaches can be reported to NSW Fair Trading. The Strata Commissioner also has powers to investigate. Owners corporations may wish to obtain independent legal advice before formally reporting, as evidence preservation is critical.

What if the manager refuses to provide records?

Refusal to provide records that the owners corporation is entitled to inspect can itself constitute a breach. NSW Fair Trading has expanded enforcement powers in this area from February 2025 onward.