NSW's Two-Quote Rule Now Applies to Every Strata Scheme

The rule as it stands

Under section 102(1) of the Strata Schemes Management Act 2015, an owners corporation must obtain at least two independent quotations for proposed expenditure on an item or matter of more than the amount prescribed by the regulations — currently $30,000. The trigger is strictly above the threshold: a $30,000 spend does not require two quotes; a $30,001 spend does. The rule doesn’t cap what a scheme can spend; it determines how many quotes must be on the table before the decision is made.

Two details in the drafting matter. First, "independent" is defined: the quotations must come from persons who are not connected with each other, and not connected to the strata managing agent, the building manager, or a member of the strata committee. Two quotes from related entities — the same group, associated businesses, a contractor and its subsidiary — don't satisfy the section. Neither does a quote from the building manager’s preferred contractor alongside a token second. Given NSW's recent reforms around strata managers' supplier connections and disclosure, "who is connected to whom" is a question committees should actually ask, not assume.

Second, the threshold applies to the item or matter, not the invoice. A single project can't be sliced into sub-$30,000 pieces to dodge the requirement — it's the whole engagement that's measured.

What changed in December 2023

Before the Strata Legislation Amendment Act 2023, the two-quote obligation applied only to large schemes (more than 100 lots). From 11 December 2023, it applies to every owners corporation in NSW, regardless of size. A six-lot scheme replacing a $35,000 roof section is now squarely inside the rule.

That change matters most for the small and mid-size schemes that never had to think about it. A $35,000 repaint, a $40,000 waterproofing job, a $32,000 fence-and-driveway package — all of it now requires two quotes before the contract is signed, in every scheme in the state.

What large schemes still have extra

Schemes over 100 lots carry an additional discipline: the owners corporation must not spend more on an item than the amount estimated for it at the AGM plus 10% — unless a general meeting resolves to remove that limitation. Budget blowouts above the buffer need owners' approval, not just the committee's. Annual budgets must itemise expected spending. If your scheme is over 100 lots, the two-quote rule is the floor, not the whole story.

The emergency exception

Section 102 doesn't apply to emergency expenditure — the Act's examples include burst or blocked water or sewerage pipes, serious damage from fire, storm or natural disaster, unexpected electrical or security-system failures, and glass breakages affecting building security. Genuine emergencies can be dealt with first and papered after. "The contractor was available this week" is not an emergency.

A related rule worth knowing: insurance

Quotes for insurance run under their own, stricter provision. Section 166 requires a strata managing agent to provide the owners corporation with at least three quotations from different providers for each type of insurance proposed — or written reasons why fewer were obtained. If your manager presents a single renewal figure each year with no alternatives and no explanation, that’s not how the Act says it should work.

The part the section can't do for you

Two quotes satisfy section 102. They only protect the owners corporation if they're comparable — priced against the same scope, the same inclusions, the same understanding of the job. Two quotes where one prices a full substrate repair and the other a surface patch technically comply while telling the committee nothing. And when a spend is questioned later — at an AGM, by a new committee, before the Tribunal — the questions are always the same: were two independent quotes obtained, were they comparable, and where are they now?