No Longer Watching from the Sidelines: NSW's New Enforcement Era

For years, critics have labelled NSW strata regulation as all bark and no bite. Heavy on legislation, light on actual enforcement. Owners were told they had rights under the Strata Schemes Management Act. However, they often felt like they were on their own when committees neglected building maintenance, managers cut corners, or conflicts of interest went unchecked. The message was clear: you deserve a properly functioning strata scheme, but it's up to you to fight for it.

That light-touch approach is being deliberately wound back. Successive waves of reform, culminating in changes that commenced in late 2025, give NSW Fair Trading much stronger tools. They can now step in directly if schemes don’t meet their obligations, especially on repairs, maintenance, and governance.

Under the old model, regulation was essentially complaints-based. Many problems sat in the too-hard basket unless an owner took a case to NCAT or pushed Fair Trading hard enough. The regulator acted more like a repository of rules than an active enforcer of standards.

This created predictable problems. Dysfunctional schemes could limp along indefinitely, with no external pressure to improve. Building defects were left to fester. Capital works funds went unfunded. Committee members felt free to act as they wished, knowing most owners don’t have the time, money or legal knowledge to challenge them.

For owners who tried to enforce their rights, the process was exhausting and expensive. They faced NCAT applications, legal fees, endless document discovery, and the emotional strain of being in conflict with their neighbours. Many simply gave up. They accepted poor governance and deteriorating buildings as the price of apartment living.

The new enforcement framework fundamentally changes that dynamic. Fair Trading officers can now:

·       demand documents and answers

·       enter common property in certain circumstances

·       issue compliance notices

·       seek penalties

·       accept enforceable undertakings

·       apply to the Tribunal for the compulsory appointment of a strata managing agent in dysfunctional schemes.

Let's break down what this actually means in practice.

Fair Trading can now use investigative powers to actively check on schemes that seem to be failing their obligations. They don’t have to wait for a complaint. They can demand to see maintenance records, capital works fund plans, meeting minutes and financial statements. Committees can no longer hide behind ‘we're a private community’ when the regulator comes asking questions.

Entry powers let officers inspect common property to verify if it’s well maintained. If your scheme says everything is fine but the building is clearly falling apart, Fair Trading can now check for themselves instead of just trusting what they're told.

Compliance notices create a formal mechanism for the regulator to tell a scheme to fix a problem by a specific date. If not, there can be escalating consequences. It's no longer just an informal suggestion or a sternly worded letter.

Enforceable undertakings are perhaps the most interesting tool. These are legally binding promises an owners corporation makes to Fair Trading. They agree to carry out specific work or improve governance. If they don’t, stronger action can be taken. Think of it as a formal probation period with clear conditions.

Compulsory appointment of strata managers through NCAT means, in extreme cases of dysfunction, Fair Trading can seek to have professional management imposed on a scheme that's incapable of managing itself. This is the regulatory equivalent of sending in the administrators.

The government has also beefed up the regulatory framework. They created the Strata and Property Services Commissioner role within NSW Fair Trading.

The Commissioner's job is to act as a watchdog and oversee the entire strata and property services sector. They set professional standards, advise on reform, and act as a visible point of accountability for the 1.2 million people now living in strata in NSW.

This role is backed by dedicated funding for a Strata and Property Services Taskforce. The team of inspectors and investigators focuses specifically on strata. Their brief is to shift from passive rulemaking to active, risk-based enforcement.

In other words, this is not just about having better laws on the books. It's about having people whose full-time job is to make sure those laws are actually followed.

To use a sporting analogy, NSW wants to move from a world where the regulator mostly watches from the sidelines. Now, the officials are prepared to blow the whistle, step onto the field, and, when necessary, send off any players who misbehave.

This shift reflects a broader rethinking of what regulation means in the strata context. For too long, the assumption was that strata schemes were essentially private communities that should sort out their own problems. The new view is that 1.2 million people in NSW rely on strata schemes working well. This is too important to leave entirely to self-regulation.

For committees and owners corporations doing the right thing, these reforms shouldn't change much. You'll still manage your scheme as you always have, but now you’ll know a regulator is watching and ready to step in if things go wrong.

For dysfunctional schemes, the message is stark: the time for poor governance and deferred maintenance has gone. Fair Trading now has both the mandate and the tools to insist that the hard decisions are made.

And if you’re an individual owner feeling powerless in the face of committee dysfunction or building neglect, there’s now an option beyond expensive NCAT proceedings. You can ask the regulator to investigate. If needed, it can use its powers to force change.

The regulator is no longer on the sidelines. The game has changed.