Across NSW, there has been a long-running pattern playing out in strata schemes: repairs are put off, capital works funds are underfunded, and everyone hopes the problems will fix themselves. Maybe the next committee will deal with it. Maybe it's not as bad as it looks. Maybe we can patch it for now and worry about the real fix later.
This is what's known as kicking the can down the road, and NSW owners corporations have turned it into an art form. But the road is running out. The regulator is no longer willing to let schemes defer their obligations indefinitely.
The law on this is crystal clear. Section 106 of the Strata Schemes Management Act 2015 puts a strict duty on the owners corporation to maintain and repair common property. Not when it's convenient. Not when the levy funds happen to be flush. Not when everyone agrees it's urgent enough. Now.
And if that doesn't happen, owners who suffer loss can claim damages. Simply put: if the roof leaks, lifts fail, or waterproofing breaks down, the owners corporation must fix it properly and promptly. They can’t kick the can down the road and hope someone else deals with it.
The same goes for planning and paying for future capital works. Every scheme (with limited exceptions) must have a capital works fund and a 10-year capital works fund plan. This plan must be updated at least every five years. Levies must be struck each year to put money into that fund. These aren't suggestions or aspirational goals; they are legal requirements.
Yet reports from lawyers, valuers and the strata sector are full of examples where funds are chronically under-resourced. Plans are ignored, and short-term levy reductions are preferred over long-term asset stewardship. Buildings are unprepared for big-ticket items like roof replacements, facade work, and services upgrades. When the bill finally arrives, owners face hefty special levies or deteriorating buildings they can't afford to fix.
Understanding why this happens isn't hard. No one likes voting for levy increases, especially when money is tight and cost-of-living pressures are high. It's easier to vote for the committee that promises to keep levies flat. It’s harder to choose the one that tells you hard truths about your building’s real needs.
There's also an information problem. Most owners don't have building expertise. They rely on their committee and strata manager to tell them what's necessary. If those advisers are conflict-averse or too optimistic about how long things can be deferred, owners make decisions based on incomplete or overly rosy information.
The turnover of ownership in many schemes means there's limited institutional memory and weak accountability. The committee that delays the roof replacement won't be there when it fails spectacularly five years later. The owners who vote down the levy increase will have sold and moved on before the consequences hit.
And finally, there's a collective action problem. Everyone benefits from deferring costs, but everyone suffers when the building deteriorates. It's the tragedy of the commons, playing out in apartment buildings across the state.
From 27 October 2025, the game has changed. NSW Fair Trading now has powers to investigate and enforce rules against schemes that don’t maintain common property or fund their obligations.
Fair Trading can demand documents, inspect premises, issue compliance notices and penalties, and seek the compulsory appointment of a strata manager through NCAT for schemes that don’t fulfil their duties.
Most significantly, Fair Trading can now enter into enforceable undertakings with owners corporations that are not meeting their repair and maintenance obligations. These are legally binding promises to carry out specified works or improve governance. If they’re not kept, stronger action may follow.
The message to owners is blunt: you are not just a group of neighbours making decisions about your shared property. You are asset managers with legal duties. If your scheme won’t care for its buildings or save for the future, the regulator can step in. They now have the mandate and the tools to ensure the hard decisions are made.
So what does it actually mean to meet these obligations properly?
First, it means having a realistic capital works fund plan based on building condition assessments, not wishful thinking. The plan must identify when major components will need replacing or substantial repair, and how much that will cost.
Second, it means striking levies each year that actually fund that plan. Not token contributions that make the numbers look right on paper but leave the fund chronically short. Real money, going into the fund every year, building up the reserves you'll need when the big bills arrive.
Third, it means repairing and maintaining things promptly when problems emerge. Don’t wait until minor issues become major failures. A small leak addressed early costs thousands. The same leak ignored until it causes structural damage costs hundreds of thousands.
Fourth, it means having proper building inspections and professional advice. Don’t rely on committee members' amateur assessments of complex building systems. Pay for expert reports. Act on their recommendations. Don't shoot the messenger when they tell you things you don't want to hear.
And finally, it means being honest with owners about their building’s real needs, even if that honesty is unpopular. Committees that promise low levies and delay necessary work are not doing owners a favour. They're actually putting them at risk of financial trouble later on.
Every owners corporation now faces a choice. You can step up to your legal obligations, finance your building properly, make repairs as needed, and look after your asset. Or you can keep kicking the can, hope the regulator doesn't notice, and take your chances.
But understand that the second option is no longer low-risk. Fair Trading is resourced, empowered and has made clear that enforcement of repair and maintenance obligations is a priority. Schemes that bury their heads in the sand should expect the regulator to come knocking.
More fundamentally, owners must recognise that their building is more than just their home. It's a significant financial asset that requires active management. You wouldn't ignore your car’s service or let your investment property deteriorate until it's uninhabitable. Similarly, don’t let your strata building suffer from neglect.
The can has been kicked as far down the road as it's going to go. It's time to pick it up and deal with what's inside.
Michael Teys advises strata management businesses on improving profitability through professionalisation and streamlined operating systems.
He has more than 30 years’ experience as a strata lawyer and academic and has owned 11 strata management agencies throughout Australia. He has a Master of Philosophy (Built Environment) and Bachelor of Laws. He lectures and writes widely about strata management issues in Australia and internationally.
