How are late strata levy payments and interest applied under the Act?
Page 12 | Hunter Strata Management
Can a strata manager issue a special levy without a general meeting of owners?
Page 20 | Strata Life
What is the correct process before escalating a by-law breach to NCAT?
Page 32 | The Strata Collective
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owner
Who covers costs when floorboards are damaged due to delayed common property repairs? Tyrone Shandiman, Strata Insurance Solutions
Does the owners corporation have to replace a deteriorated fire-rated entry door?
Mark Louis, Vital Strata Management
How are late strata levy payments and interest applied under the Act?
Nathan Clarke, Hunter Strata Management
Are fire protection window screens maintained by the owners corporation or lot owners?
Hugh
What happens if owners cannot agree on the size of the strata committee at an AGM?
Tim Sara, Strata Choice
Jana Antelmann, Strata Life 22 Can a strata scheme block an owner from building an accessibility ramp?
Matthew Lo, Kerin Benson Lawyers
Is an owners corporation’s ABN number required to set up a bank account?
Tim Sara, Strata Choice
The importance of building a strong relationship with your project manager
PASG Projects 28 Is appointing a compulsory strata manager the solution to committee dysfunction?
Megan Parkins, Tender Advisory 30 Someone’s made an offer to buy my strata management business - what do I do?
Strata Business Brokers
What is the correct process before escalating a by-law breach to NCAT?
Sean Bermingham, The Strata Collective 34 Is it common to get a complete defect report before the building’s warranty period expires?
Sam Hogg, PASG Projects 36 Should a strata management contract be reviewed before its expiry date?
Values-Driven Hiring & Induction. How simple hiring and induction systems minimise bad hires and set new team members up to thrive Property Recruitment Partners 20 Can a strata manager issue a special levy without a general meeting of owners?
Julia Moroz, Bugden Allen
The NSW LookUpStrata Directory
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Can an owner of two lots elect themselves and a proxy to the committee?
Can an owner of two lots elect themselves and a proxy to the committee, and can both hold office bearer positions?
An owner in our scheme holds two lots. They want to give a proxy for one lot to a friend and elect that friend to the committee, while also electing themselves to the committee. This would give them two votes at committee meetings. If allowed, could both the owner and their proxy also be elected into office bearer positions?
The owner and non-owner friend could both be elected to the strata committee, provided...
Yes, the owner and non-owner friend could both be elected to the strata committee provided the non-owner friend is nominated for election by an owner other than the friend owner OR some other owner who is not seeking election – see extract of Section 31 of the Strata Scheme Management Act 2015 (emphasis added).
31 Persons who are eligible to be appointed or elected to strata committee
1. The following persons are eligible for appointment or election to the strata committee of an owners corporation:
a. an individual who is a sole owner of a lot in the strata scheme,
b. company nominee of a corporation that is a sole owner of a lot in the strata scheme,
c. an individual who is a co-owner of a lot or a company nominee of a corporation that is a co-owner of a lot in the strata scheme, if the person is nominated for election by an owner who is not a co-owner of the lot or by a co-owner of the lot who is not a candidate for election as a member,
d. an individual who is not an owner of a lot in the strata scheme, if the person is nominated for election by an owner of a lot who is not a member, or is not seeking election as a member, of the strata committee.
Who covers costs when floorboards are damaged due to delayed common property repairs?
Who is responsible for replacing flooring damaged after the building manager delayed fixing a leaking stop cock?
The building manager agreed to fix a leaking stop cock but did not carry out the repair until 17 days later. During that time, water damage occurred to my floorboards, and I now need to replace the flooring in the whole room. The flooring cannot be replaced like for like. Who is responsible for the replacement?
In the first instance, try to resolve the issue with the insurer.
The usual course of action with floorboards will depend on whether they are covered under the strata insurance policy. If the flooring is considered a floating floor and the strata policy excludes cover for it, the first step would be to make a claim under your own contents insurance.
When it comes to the issue of matching the flooring, this can be more complex. Insurers generally do not provide matching cover – meaning they will replace the damaged portion but exclude the non-damaged portion. That can result in only part of the room being replaced. Depending on the size of the area, you may be able to push the insurer to replace the whole room, but this is not guaranteed.
If you believe that the owners corporation is legally liable for the full replacement, including matching, you would need to put your case forward in writing to them. If that is not successful, the next step would be to pursue the matter through the applicable dispute resolution process (for example, via Fair Trading Strata disputes) or seek legal advice.
So in practice, the first instance would be to try to resolve the issue with the insurer. If you remain unsatisfied, you can then put your case to the owners corporation for why you believe they are responsible.
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To redeem this offer email a copy of your current policy schedule to Strata Insurance Solutions within 1 month of the publication of this magazine Your policy can expire any time in the next 12 months However we can only provide quotes 30 days prior to the expiry of your policyif your policy is not due now, we will schedule a quote at the appropriate time To ensure we apply this offer to our quotes, please specifically mention you would like to redeem the "LookUpStrata Special Offer"
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Does the owners corporation have to replace a deteriorated fire-rated entry door?
Can the owners corporation force me to replace my unit’s fire door if it splits due to age?
My unit’s entry fire door has split near the lock and now requires replacement. The building is over 40 years old, and I believe the damage is due to wear and tear rather than misuse. The owners corporation obtained a quote earlier this year, but the new strata manager and committee now say I may have to pay for the door. Is this the responsibility of the owners corporation or the lot owner? Can I be forced to cover the cost of the replacement door?
The responsibility for repairing or replacing your front entry door lies with the owners corporation, not the individual lot owner.
Based on the information you have provided, and with reference to the Strata Schemes Management Act 2015 (NSW) and the SCA NSW document: Who’s Responsible? A guide to common property, the responsibility for repairing or replacing your front entry door lies with the owners corporation, not the individual lot owner.
Here are the key points:
1. Front Entry/Fire Doors Are Common Property:
• The front entry door to a lot (where it forms part of the fire safety system of the building) is considered common property, as is the door frame.
• The owners corporation has a strict legal obligation under section 106 of the Strata Schemes Management Act 2015 to repair and maintain common property, including entry/fire doors.
2. Wear and Tear:
• From your description, the damage (splitting of the door) appears to be the result of age and wear and tear in a building that is over 40 years old.
• Natural deterioration does not transfer responsibility to the lot owner. The owners corporation must still repair or replace common property when it deteriorates.
3. Fire Safety Compliance:
• Because the front entry door also serves as a fire-rated door, the owners corporation has an additional responsibility to ensure it is maintained in proper working condition to meet fire safety standards.
• A compromised fire door poses a compliance risk for the entire building, making timely replacement essential.
You are not responsible for the replacement of the front entry/fire door. The owners corporation must arrange and pay for the replacement. While you may be responsible for the cost of the lock or handle itself, the replacement of the fire-rated entry door due to splitting or structural failure clearly falls under
Helping the strata community navigate their building concerns
BUILDING CONSULTANCY
• Defect reports and forensic engineering
• Scope of works
• Dilapidation and risk surveys
• Dispute mediation and expert witness
• Contrator procurement and cost validation
• Construction management
• Capital works funds / maintenance plans
• Digital capability
• Façade assessments
REPAIR SOLUTIONS
• Emergency make safe
• Fire water damage restoration
• Leak detection
• Contamination response
• Building repairs
• Cost validation services
• Digital capability
How are late strata levy payments and interest applied under the Act?
Can a strata manager deduct overdue interest from levy payments and then charge further interest on the resulting shortfall?
We paid our strata levies on 21 February 2025 for administration and capital works in accordance with a quarterly levy notice issued in December 2024. The payment was late, as it was due on 1 January. The strata manager deducted the overdue interest of $17.61 from the capital works levy, leaving that fund in arrears. They stated their system “automatically puts the monies against the interest”.
The March levy notice recorded the shortfall of $17.61 in the capital works levy as overdue since 1 January, and applied additional interest of $0.05, making the total $17.66. Is this practice permitted?
Strata management accounting systems allocate payments to the oldest debt first.
The majority of strata management accounting systems allocate payments to the oldest debt first, without differentiating between interest or levy contributions.
Section 85(2) of the Strata Schemes Management Act 2015 (SSMA) states “A contribution, if not paid when it becomes due and payable, bears until paid simple interest at an annual rate of 10% or, if the regulations provide for another rate, that other rate.”
Further, Section 86 of SSMA does not differentiate between contributions and interest with debt recovery. They are viewed as one under legislation. The $0.05 interest in question would have been charged by the owners corporation if the levy was paid $17.61 short, or if only the interest of $17.61 remained unpaid. The strata manager does not receive any benefit from the interest charged on overdue levies. The interest is charged by and credited to the owners corporation.
While owners can dictate which amounts their payment is to be allocated to, it is always advisable to pay off the oldest amounts owing first. If levy payments are made on or before the due date, owners won’t be liable for any interest or debt collection costs.
Are fire protection window screens maintained by the owners corporation or lot owners?
In a fire zone, are repairs to windows and special gauze screens the responsibility of the owners corporation or the lot owner?
Our unit is located in a designated fire zone that requires special gauze screens on the windows. Are repairs to the windows and these screens the responsibility of the owners corporation, or should the lot owner bear the cost?
If these gauze screens were original or installed by the owners corporation for fire protection, most likely the screens are the responsibility of the owners corporation to repair and maintain.
In NSW, the structure, windows, doors and screens that form the boundary of the lot are typically common property where they were original to the building. If these gauze screens were original or installed by the owners corporation for fire protection, it is most likely the screens are the responsibility of the owners corporation to repair and maintain.
However, you should review the strata plan and bylaws to ensure there are no notations or bylaws stating otherwise.
What happens if owners cannot agree on the size of the strata committee at an AGM?
What happens if owners cannot agree on the number of strata committee members at an AGM? Does a tied vote mean the motion is defeated?
Our NSW strata complex has six owners. At our recent AGM, three owners voted for a committee of three members, while the other three owners voted for a committee of six. A poll vote produced the same tied result.
The strata manager advised that because of the tie, best practice meant the number set at last year’s AGM (three members) would continue. I understood that a tied vote means the motion is defeated.
If no agreement is reached on the number of committee members, does this make the subsequent vote to appoint office bearers invalid? In this case, does the owners corporation take over day-to-day management until the issue is resolved, and is it required to fill the office bearer positions?
Where the votes are tied, there is no majority, and the motion is defeated.
The process for electing a strata committee is set out in the Strata Schemes Management Act 2015 (“SSMA”) and the Strata Schemes Management Regulation 2016
At each AGM, the owners corporation must first determine how many members the committee will have (between 1 and 9) – see clause 9 of the Regulation. That decision is made by ordinary resolution. Under clause 14 of Schedule 1 to the SSMA, an ordinary resolution is carried if a majority of votes cast are in favour. Where the votes are tied, there is no majority, and the motion is defeated.
In the example you describe, because three owners voted for a three-member committee and three voted for a six-member committee, no resolution was passed. The effect is that the owners corporation has not set the size of the committee, so a new committee cannot be elected.
That does not mean there is “no committee” at all. Section 35(1)(d) of the SSMA provides that an elected member of a strata committee vacates office “at the end of the next annual general meeting at which a new strata committee is elected.” If a new committee is not successfully elected, the old committee remains in office until such time as one is elected. In other words, the outgoing committee continues by operation of law.
As to office bearers – chairperson, secretary and treasurer – these positions are appointed by the strata committee itself at its first meeting after election (see section 41 of the SSMA). If the committee has not been validly elected, then no new office bearers can be appointed. In that situation, the existing office bearers continue in their roles until a new committee is properly elected and convenes to appoint replacements.
If the impasse continues, the Tribunal (NCAT) has power under section 238 of the SSMA to make orders in relation to the constitution
or function of the strata committee. In practice, it is preferable for the owners to reconvene and resolve the number of committee members so that a fresh election can be held.
In summary:
• A tied vote means the motion fails – the number of members has not been set.
• Without that decision, a new committee cannot be elected.
• The previous committee and office bearers remain in office until a new committee is validly elected (s 35(1)(d)).
• If the owners cannot resolve it themselves, an application can be made to NCAT for directions.
Tim
Sara | Strata Choice tsara@stratachoice.com.au
Insurance & Risk Under the Microscope: Emerging Threats and How to Respond
Insurance is one of the fastest-moving challenges in strata today. Premiums are rising, underwriters are more cautious, and exclusions are widening. Building age, combustible cladding, lithium battery fire risks and climate -related weather damage are all driving insurers to demand more evidence of sound risk management.
For strata managers, this means moving from a reactive stance to a proactive one. Rather than waiting for issues to surface through claims or complaints, the priority should be prevention and preparedness. Routine inspections help identify hazards early, detailed documentation shows the scheme is meeting its duty of care, and independent reports safeguard owners’ assets while reducing the risk of claim delays
Where QIA Group helps: Our Safety Reports identify compliance and safety issues before they escalate into costly claims, while our Insurance Valuations ensure schemes maintain accurate cover and avoid the risks of underinsurance. Together, these reports give strata managers and committees the confidence to demonstrate due diligence and protect their communities.
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2. Induction: plan the first 90 days (and book it in)
A great induction is the smartest retention tool. It tells a new hire: “We invested in you.” Here’s a simple, role-based map.
Pre-start
• Send a welcome pack: team chart, site map, first-week schedule and login/setup instructions.
• Prepare workstation, access, and a buddy/mentor.
Week 1 — foundations
• Day 1: welcome, HR/admin, site tour, meet the team.
• Days 2–5: shadowing, role-specific systems training (record-keeping, trust accounting basics, CRM), immediate small tasks with feedback.
Weeks 2–4 — guided autonomy
• Assign progressively responsible tasks: manage low-risk tasks, prepare a committee report draft, lead a short site inspection with mentor/buddy
• Weekly 1:1 with manager; end-of-month competency review against the scorecard.
Month 2–3 — embed & assess
• Expand responsibilities, introduce complex files, and set a 90-day performance check with agreed KPIs (turnaround times, resident feedback, file accuracy etc).
• Offer training pathways (SCA modules, on-the-job mentoring) and record progress.
Role specifics (examples):
• Assistant Strata Manager: focus on defect log process, committee minutes, and resident communications in early weeks.
• Strata Manager: handover a small number of buildings initially under mentor oversight, supplier relationship introductions, legislative refreshers.
• Admin/Support: emphasis on trust accounts, data integrity and customer service scripts.
3. Why the basics matter
Structured yet relaxed interviews PLUS planned inductions reduce hiring risk by turning subjective choices into measurable outcomes. They accelerate time-to-productivity, strengthen compliance and protect resident experience. Most importantly, they create clarity for both employer and employee, so that hires stick, perform and grow.
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Can a strata manager issue a special levy without a general meeting of owners?
Can a strata manager raise a special levy without approval at a general meeting?
Our strata manager has been issuing special levies to individual owners without seeking approval at a general meeting. Does the strata manager have the authority to do this?
A special levy cannot be issued without a resolution being passed at a meeting of the owners corporation.
No, a special levy cannot be issued without a resolution being passed at a meeting of the owners corporation just like levies for the administrative and capital works funds. A motion to raise a special levy must be approved by a simple majority of owners present and voting at a general meeting of the owners corporation. See Section 83 –Levying of contribution of the Strata Schemes Management Act 2015 No 50 (SSMA).
The only circumstance in which a strata manager can raise a special levy without holding a general meeting is if the strata managing agent has been delegated all the powers of the owners corporation. For example, under a compulsory appointment by the Tribunal or through a properly authorised delegation of all powers. In such cases, meetings of the owners corporation are not necessary. Instead of lot owners voting to decide matters, the strata manager exercises the delegated authority power and can raise levies and pass resolutions on behalf of the owners corporation. See Section 237 –Orders for appointment of strata managing agent of the SSMA.
Jana Antelmann | Strata Life jana@thestratalife.com.au
Can a strata scheme block an owner from building an accessibility ramp?
Can an owner with mobility issues install a ramp and pathway to replace stairs at their unit entrance? Can the owners corporation refuse this request?
I own a ground-floor unit at the front of a small suburban complex. Current access requires me to walk across the front lawn and up three steps to my verandah to open my front door. As I have arthritis and other health issues, I am losing mobility and becoming disabled. Walking across the spongy lawn is difficult, and the stairs are becoming unmanageable. There is no banister.
I would like to replace the three steps with a ramp and pathway wide enough for a wheelchair or mobility scooter, connecting my front door to the street footpath. I have sufficient funds to cover at least some, if not all, of the cost. Am I legally allowed to make these modifications? Can the owners corporation or strata manager refuse me, and what process do I need to follow?
Based only on the enquiry, it appears the changes could be accessibility infrastructure, which means it is specially resolved if there’s 50% support of a work by-law at a general meeting (instead of 75%).
This query appears very specific, and I would suggest seeking legal advice.
In general, in respect of strata schemes, changes to common property of this scale are not likely to be cosmetic or minor works and would need to be made by a special resolution pursuant to section 108 of the Strata Scheme Management Act 2025. However, where the change to the common property is for accessibility infrastructure, pursuant to section 5(1)(b)(iii), a special resolution can be merely 50% (but it’s still a special resolution).
The terms “accessibility infrastructure” and “accessibility infrastructure resolution” are defined in section 4, and notability accessibility infrastructure is defined to be a change to common property:
to facilitate a person with a disability having acess to–
i. the common property, or
ii. the lot in the strata scheme in which the person resides.
Based only on the enquiry, it appears the changes could be accessibility infrastructure, which means it is specially resolved if there’s 50% support of a work by-law at a general meeting (instead of 75%).
If the lot owner wants to be responsible in part or in full for the works, section 108(3) to (6) allows the works by-law to be made with such conditions. An offer by a lot owner to be responsible for the works might attract greater support from the owners corporation to approve the works.
In answering the direct questions:
Are you legally allowed to make these modifications?
Changes to common property would require
approval of the owners corporation, unless it’s cosmetic work, and that approval is with a bylaw, unless it’s minor works.
Can the owners corporation or strata manager refuse?
The strata manager cannot approve or refuse. As this is common property of the owners corporation, the owners corporation, at a general meeting, approves or refuses the works.
What process do you need to follow to make this happen?
The lot owner would need to propose a work bylaw for the upcoming general meeting agenda.
Matthew Lo | Kerin Benson Lawyers enquiries@kerinbensonlawyers.com.au
Is an owners corporation’s ABN number required to set up a bank account?
Our strata scheme was previously self-managed. We have appointed a strata manager. Is an ABN number required to set up a bank account?
The common view is: why not?
Strictly speaking, no. There’s nothing in the Strata Schemes Management Act 2015 or the Property and Stock Agents Act 2002 that requires an owners corporation to hold an ABN to operate a bank account or, for that matter, a strata managing agent’s trust account.
However, in practice:
• Most banks will ask for an ABN when opening an account, particularly if it’s in the name of an owners corporation rather than an individual. This is part of their “Know Your Customer” checks and helps them report correctly to the ATO.
• An ABN is also essential if the owners corporation is required to register for GST (this only applies if the scheme earns significant income, e.g. commercial leases) which generally applies where the annual revenue exceeds $150,000.
So, while not a legal requirement, just about every strata scheme in NSW has an ABN. It avoids unnecessary tax complications, ensures smoother dealings with banks and suppliers, and costs nothing to obtain from the ATO.
That’s why the common view is: why not?
Tim Sara | Strata Choice tsara@stratachoice.com.au
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Is appointing a compulsory strata manager the solution to committee dysfunction?
What can owners do if elected office bearers refuse to communicate? Can a temporary strata manager be appointed?
After seven months with no elected office bearers, the secretary, treasurer and chair were announced at a strata meeting. The new secretary refuses to respond to any communication from owners, including legitimate questions. The next step is mediation, but owners are concerned that the outcome may be ignored. Our strata manager has also terminated and will complete their term next month. Is appointing a temporary strata manager the solution, and if so, how can this be implemented?
NCAT can appoint a compulsory strata manager, however, it is a “last resort” measure.
To preface the below response, my understanding of the situation as read is that the current strata management company have elected to self-terminate despite there being no strata management company to take over the site.
In accordance with the legislation, the only way to effectively appoint a strata management company is under an appropriately drafted managing agency agreement with the owners corporation, which will need to be approved by way of ordinary resolution at a general meeting.
Notwithstanding this, if the committee/owners corporation, for whatever reason, cannot coordinate their interests and convene a general meeting and/or appoint a strata management company themselves, then (in NSW) a strata manager can be appointed compulsorily by the NSW Civil and Administrative Tribunal (NCAT).
However, this is a “last resort” measure used when the owners corporation is dysfunctional, neglects its duties, or breaches Tribunal orders.
What is the correct process before escalating a by-law breach to NCAT?
Is a motion enforceable if it allows the committee to escalate breaches directly to NCAT without notices or investigation?
At a recent extraordinary general meeting, our scheme passed a motion that states, in effect: If a resident leaves a pot plant on common property without committee permission, and does not remove it after written advice from the committee, the committee may refer the resident to NCAT.
Is escalation to NCAT the legislated next step in this type of situation? The committee would only need to prove that the resident did not comply with an order to remove or relocate the pot plant, without needing to demonstrate that the pot plant created a hazard or obstructed movement. This places the burden of proof on the resident rather than the committee. Is this motion enforceable?
While the motion records the committee’s intention, it cannot override the requirements of the Act.
Under the Strata Schemes Management Act 2015 (NSW), the process for enforcing bylaws is set out quite specifically:
• The strata committee or owners corporation may issue a Notice to Comply with a by-law (Section 146). This notice must identify the by-law that is alleged to have been breached.
• If the matter is not resolved, the owners corporation may then apply to the NSW Civil and Administrative Tribunal (NCAT) for an order. Only NCAT can determine whether a breach has occurred and, if appropriate, impose a penalty.
• The Act does not require the committee to conduct a hearing before issuing a notice. The safeguard is that any enforcement action can only proceed through NCAT, where the resident has the full opportunity to present their case.
In short, while the motion records the committee’s intention, it cannot override the requirements of the Act. Enforcement must still follow the legislative process. The committee itself cannot impose penalties, and the onus remains on the owners corporation to demonstrate a breach of a valid by-law at NCAT.
Sean Bermingham | The Strata Collective info@thestratacollective.com.au
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Is it common to get a complete defect report before the building’s warranty period expires?
Should a strata building obtain a full defect report before the warranty expires, or could this lead to liability under updated building codes?
I live in a four-year-old multi-storey strata building. During recent rains, four units experienced water ingress. Our strata manager advised us to commission a full building defect report. Some committee members disagree, as they believe the inspection will be assessed against the current building code rather than the code in effect at the time of construction, which could expose us to unnecessary rectifications and millions of dollars in costs. The strata manager also advised that not commissioning a defect report could void our ability to secure insurance for the building.
Is it common practice for buildings to obtain full defect reports before the warranty period expires? Would such a report make us liable for defects that are not immediately evident but are assessed against revised building codes introduced since construction?
It’s standard practice to commission a comprehensive defect report 6–12 months before the expiration of your building’s warranty period.
Is it common to get a complete defect report before the building’s warranty period expires?
It is strongly recommended to obtain a defect report. There is a statutory warranty period (usually 6 years for major defects and 2 years for minor defects) under the applicable legislation (e.g. Home Building Act 1989 (NSW)). It’s standard practice to commission a comprehensive defect report 6–12 months before the end of this period to ensure you identify all latent or hidden defects in time to pursue the builder or developer for rectification.
Failing to obtain a defect report within this window can mean missing the opportunity to claim under the warranty, leaving the owners corporation (OC) to fund repairs themselves.
In your case, I would obtain a defects report as soon as possible. From experience, if four lots have water ingress, other lots may also have issues that are not yet presenting.
Arranging a defect report now ensures that:
• All latent or hidden defects are identified early
• The owners corporation (OC) preserves the right to claim against the builder or developer
• You meet your duty of care to lot owners
Would a report make you liable for defects that are not immediately evident based on revised building codes since construction?
No. A defect report does not retroactively impose liability for code changes introduced after construction.
Defects are assessed based on the standards and codes that applied at the time of construction. Your consultant should assess the building against the NCC and relevant Australian Standards that were in force at the time of completion, not today’s codes.
However, if something poses a safety risk, e.g. fire separation, waterproofing failure, or structural inadequacy, the report might identify this as a defect or non-compliant condition regardless of when the code changed. This is to protect the safety of residents, not create unnecessary cost.
Water never gets better over time. It only spreads, weakens, and destroys. Here’s why immediate action is so important:
• Structural implications: Water in walls, slabs or cavities can damage reinforcement, corrode fixings, cause concrete spalling and framing damage
• Mould and health risk: Moisture buildup leads to mould, which affects indoor air quality and resident health
• Escalating costs: The longer you wait, the more destructive water becomes.
• Insurer notification: If you’re aware of water ingress but fail to investigate and notify your insurer properly, you risk losing insurance.
• Falling property value: Buyers are increasingly wary of water-damaged buildings. The longer defects are visible, the more they erode the market value of the apartments.
Sam Hogg | PASG Projects info@pasg.com.au
Should a strata management contract be reviewed before its expiry date?
Our strata management contract doesn’t expire until 2027. Should we review the contract sooner? If so, will that have any impact on our current contract?
While reviewing the contract won’t change your current legal obligations unless both parties agree to a variation, it is still a strategic and prudent step.
Yes, it is advisable to review your strata management contract before it expires, even if the term runs until 2027. While an early review won’t automatically change the legal effect of the current contract, it can help the OC assess whether the terms are still appropriate, ensure the managing agent is meeting expectations, and prepare well in advance for renewal, renegotiation, or replacement.
Under section 50(1)(b) of the Strata Schemes Management Act 2015 (NSW) (SSMA), a strata management agency agreement cannot exceed 3 years, unless it was entered into at the first AGM of the strata scheme, in which case the maximum term is 12 months. Once the term expires, the owners corporation may choose to reappoint the strata manager by resolution at a general meeting.
While you’re bound to the existing contract until its expiry (unless it is lawfully terminated earlier), the standard SCA agency agreement usually includes a clause allowing for annual reviews of services and charges. These review clauses give the parties an opportunity to:
• assess performance and satisfaction;
• adjust service levels or fee structures (by mutual agreement);
• raise concerns about compliance, transparency, or communication
In short, while reviewing the contract won’t change your current legal obligations unless both parties agree to a variation, it is still a strategic and prudent step to protect the interests of the owners corporation, particularly with significant reforms to strata law coming into effect in the near future.