New Transparency Rules for NSW Strata Managers: What Lot Owners Need to Know
In February 2025, NSW Parliament introduced major reforms to strengthen transparency and accountability in strata management. These changes directly benefit lot owners by ensuring your strata manager operates with full disclosure and in your owners corporation's best interests.
What's Changed?
The reforms amend the Strata Schemes Management Act 2015 (NSW) to require strata managers to disclose any relationships, benefits or potential conflicts of interest that could affect their management of your building. Think of it as shining a light on all the behind-the-scenes arrangements that lot owners previously had no visibility over.
The $60 Gift Rule
Your strata manager can no longer accept gifts or benefits worth more than $60 from suppliers, contractors or anyone doing business with your building. This prevents situations where a manager might favour one contractor over another because they're receiving personal perks.
If they do receive a benefit over $60, they must disclose it at your Annual General Meeting (AGM) in writing, including:
The dollar value of what they received.
Who gave it to them and why.
An explanation of how accepting it serves your building's best interests.
Confirmation that it complies with industry regulations.
Why this matters to you: This protects your building from potentially paying inflated prices or receiving substandard services because your manager has a personal incentive to use certain suppliers.
Connected Relationships Must Be Disclosed
Under the new rules, strata managers must reveal any "connected relationships" they have with suppliers or service providers. A connected relationship means the supplier is:
A family member or relative.
Their employer or employee.
A company where they hold a position or shares.
Anyone else they have a close business or personal relationship with.
Plain English example: If your strata manager wants to hire their brother-in-law's plumbing company, or a business they partly own, they must tell you in writing before awarding the contract. They must explain the relationship, the value of any commission or benefit they'll receive and why using this supplier is genuinely in your building's best interests.
Why this matters to you: You deserve to know if your building's money is going to someone with personal ties to your manager. This transparency allows your strata committee to ask tough questions and ensure decisions are based on value and quality, not personal relationships.
Annual Reporting Requirements
Every year, your strata manager must now provide a detailed report listing all suppliers and original developers they've been connected with over the past 12 months. This creates a clear paper trail of who your manager has relationships with and ensures ongoing accountability.
Why this matters to you: Annual reporting means you can track patterns over time. If the same "connected" suppliers keep getting work, you can ask whether they're truly the best choice or just the most convenient for your manager.
New Building Strata Managers
When interviewing potential strata managers for your building, they must now disclose upfront if they:
Routinely use suppliers they're connected with in other buildings they manage.
Provided advice to your building's developer in the past two years.
Why this matters to you: This is particularly important for newer buildings. You'll know if your prospective manager has existing ties to the developer who built your building—relationships that could influence whether building defects get properly addressed or whether the developer's interests are prioritised over yours.
Real-World Benefits for Lot Owners
These reforms deliver tangible advantages:
Better value for money: When managers can't receive hidden kickbacks or favour connected suppliers, your building is more likely to get competitive quotes and quality service at fair prices.
Informed decision-making: Your strata committee can now make fully informed choices about contracts, knowing the complete picture of any relationships or benefits involved.
Reduced conflicts of interest: Mandatory disclosure creates accountability. Managers who know they must report everything are far less likely to engage in arrangements that don't serve your building's interests.
Stronger penalties: Failure to disclose can result in penalties for the strata managing agent, giving the rules real teeth.
What Should You Do?
As a lot owner, you should:
Review disclosures at your AGM: Pay attention to any benefit disclosures and ask questions if something doesn't seem right.
Check annual reports: Look at the list of connected suppliers and consider whether your building is getting good value.
Ask your strata committee: Ensure they're reviewing disclosures and holding your manager accountable.
Speak up if concerned: If you suspect undisclosed conflicts of interest, raise it with your committee.
The Bottom Line
These reforms represent a significant shift toward transparency in strata management. After more than six months in operation, strata managers should be fully complying with these disclosure requirements. Your owners corporation and strata committee should be familiar with these obligations to ensure your manager is meeting their legal duties.
The new framework ensures lot owners are adequately informed of any actual or potential conflicts of interest. This transparency ultimately protects your investment, ensures your building is managed ethically, and gives you the information you need to hold your strata manager accountable.
If you have concerns about whether your strata manager is complying with these disclosure obligations, raise them with your strata committee or call Grace Lawyers on 1300 144 436 or email us at enquiries@gracelawyers.com.au
