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.

Two details in the drafting matter. First, "independent" is defined: the quotations must come from persons who are not connected with each other. Two quotes from related entities — the same group, associated businesses, a contractor and its subsidiary — don't satisfy the section. 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.

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.

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.

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?