NSW Strata Committee Training: Mandatory from October 2026

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NSW

Strata committees play an essential role in the governance and management of strata schemes. Given the importance of this role, committee members need to understand their responsibilities, legal obligations and the procedures required to effectively manage their scheme.

Recent reforms to section 37 of the Strata Schemes Management Act 2015 (SSMA) have incorporated a new requirement for all members of the Strata Committee to undertake compulsory training within their first months on the Committee. The NSW Office of Fair Trading (NSW OFT) has developed a new mandatory training programme to be implemented from 1 October 2026.

Is strata committee training mandatory in NSW from 1 October 2026?

From 1 October 2026, new and returning NSW Strata Committee members must complete the compulsory training within three months of being appointed to the committee. The training will provide a necessary overview of the legislative framework regulating the management of strata schemes, and will provide Strata Committee members with appropriate guidance and assistance to deal with all matters that may arise in the governance of a Strata Scheme.

The new training will apply to Strata Committees only and will not apply to Association Committees in community land schemes.

The reforms recognise the significant responsibilities undertaken by strata committee members and are designed to give members the knowledge and practical skills needed to carry out their roles.

Who needs to complete mandatory strata committee training in NSW?

The training requirement applies to new and returning strata committee members, as well as members appointed to fill a vacancy for more than three months. A committee member who serves on multiple strata committees only needs to complete the training once.

The training is also available voluntarily to anyone wanting to better understand strata governance. This includes owners and residents considering joining a committee, existing owners who want to understand how strata decisions are made, and committee members appointed before 1 October 2026 who are not yet required to undertake the training.

How long do strata committee members have to complete the training?

Committee members must complete the required training within three months of being appointed.

For example, a committee member appointed on 1 October 2026 must complete the training by 1 January 2027. A committee member appointed before 1 October 2026 does not need to undertake the training until they are next appointed, although they may choose to complete it voluntarily beforehand.

Committee secretaries should therefore keep accurate records of appointment dates and monitor when each member’s training is due.

What does the NSW strata committee training involve and how long does it take?

The course, Introduction to Strata Committee Rights and Responsibilities, provides committee members with practical information to assist them in carrying out their responsibilities.

The training is available online through Strata Hub, with updates and information around access to be released in early October. NSW Fair Trading is providing the course free of charge.

The self-paced training covers key aspects of strata governance, including:

  • The legal duties, responsibilities and role of the Strata Committee.
  • Managing repairs and maintenance requests, including the Owners Corporation’s obligations under section 106 of the SSMA;
  • Managing and resolving disputes within the strata scheme;
  • The financial management of the Owners Corporation; and
  • Identifying, mitigating and managing risks.

The modules will take approximately one hour total to complete, and allows each individual to complete the training at their own pace, in one sitting or on multiple occasions.

Who is exempt from mandatory strata committee training in NSW?

The training requirements do not apply to committee members:

  • Where there are two lots in a Scheme, the Strata Committee is not required to complete the training.
  • Any individuals who are Strata Managing Agents or members of the Australian College of Strata Lawyers are exempt from the training.
  • Individuals who are filling a casual vacancy of less than 3 months will not be required to undertake the training.

NSW Fair Trading recommends that the committee secretary send a reminder notice to committee members at least one month before their training is due. This is recommended as good practice and is not a legal requirement.

What happens after you complete the strata committee training?

Once a committee member completes the training, NSW Fair Trading issues a Certificate of Completion.

NSW Fair Trading recommends that committee members provide a copy of their Certificate of Completion to the committee secretary within three months of being appointed so the committee has evidence that the training has been completed.

Committee secretaries are also encouraged to keep copies of Certificates of Completion for at least one year. This is recommended as good administrative practice rather than being a legal requirement.

What happens if a strata committee member does not complete the mandatory training?

If a member of the Committee fails to complete the mandatory training within the three month period, a notice must be sent to them advising they are no longer Committee members as they are in breach of section 37 of the SSMA. The Secretary should ensure they notify all members of the Committee to prevent the non-compliant individual from being included in decisions and to avoid governance issues.

Considerations for non-compliance

  • If a failure notice is not sent, the individual in breach will no longer be a Committee member.
  • A decision made by a Strata Committee where one of the members is non-compliant is considered valid if the Committee was acting in good faith, with the genuine belief that the individual had completed the necessary training.
  • The removal of a Committee member due to non-compliance does not prevent them being reinstated within the same 12 month period, provided they have since completed the training.
  • The NSW OFT will never take action against a Committee member in breach, however members should ensure they complete the necessary training without delay.
  • If a member is non-compliant, the Strata Committee must take reasonable steps to prevent that individual from participating in discussions and decisions of the Committee, and must consider whether an election is required to fill the vacancy (if the vacancy is required to be filled, regular voting methods will apply, and the election should take place at a properly convened general meeting of the Owners Corporation).

NSW Fair Trading has published template reminder and failure-to-complete notices that committee secretaries can adapt for use within their schemes.

Summary

The new mandatory training requirements represent an important change for NSW strata committees and reinforce the responsibilities that come with committee membership. Strata committee members should understand their obligations, complete the required training within the applicable timeframe and retain evidence of completion. Strata managers and committee secretaries also have an important role in supporting compliance and maintaining good governance. Taking proactive steps now will help committees manage the new requirements effectively and reduce the risk of disruption arising from non-compliance.

 

If you require guidance regarding complying with the new strata committee training obligations, contact our NSW Strata and Property team for advice on 1300 144 436.

 

Written by Anna Hahm, Partner, and Holly Mack, Lawyer, Grace Lawyers

 

 

Last updated on 1 October 2026

Recovering OC Arrears: VCAT Says “Balance Brought Forward” is Not Enough

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VIC

A common shortcut in owners corporation debt recovery may now come at a significant cost. Owners corporations (OCs) and their managers have commonly included historical arrears in Final Fee Notices as a single “balance brought forward”, often due to the way accounting software generates notices. In Owners Corporation PS415135N v Imam [2026] VCAT 704 (Imam), VCAT held that these lump sum amounts are not recoverable where the individual amounts making up the balance are not itemised in the Final Fee Notice.

The decision has important implications for OCs and OC managers, who should review their debt recovery processes and ensure Final Fee Notices comply with the statutory requirements.

Final Fee Notices must itemise each amount claimed

Sections 31 and 32 of the Owners Corporations Act 2006 (Cth) (OCA) govern the OC’s processes on how it can recover outstanding fees and charges owed. Section 30 of the OCA permits the OC to recover any money owed to it in any court of competent jurisdiction as a debt due to the owners corporation, subject to the statutory scheme under sections 31 and 32 of the OCA.

If an OC seeks payment of fees and charges which are due and payable, it must first issue a Fee Notice meeting the requirements outlined in section 31 and complying with the approved Consumer Affairs Victoria (CAV) Fee Notice form. If the arrears are not remedied within 28 days of the Fee Notice, the OC may issue a Final Fee Notice in accordance with section 32 of the OCA and the approved CAV form for Final Fee Notices.

The CAV approved forms outline the proper structure for Fee Notices and Final Fee Notices to address the ‘Date due’, Description of fee/charge/interest/arrears’, and ‘Amount’ of the arrears. This requires the individual amounts comprising the arrears to be separately itemised.

VCAT rejects the use of historical notices to explain lump sums

It is common practice for OC Managers to rely on its software in preparing Fee Notices and Final Fee Notices, which can result in lump sum items being listed on Final Fee Notices to avoid excessive reproduction of historical amounts. Historically, OCs have sought to substantiate these lump sums at VCAT by providing the corresponding Fee Notices issued to the lot owner. However, Imam has changed this approach, making it no longer sufficient for the Tribunal.

Member Reid fundamentally disagreed with this approach by stating:

“Trawling back through a series of earlier notices and undertaking an accounting exercise to understand a final fee notice is not something lot owners should have to do.”

VCAT will not separate recoverable amounts from a lump sum

In Imam, the lump sum contained amounts that the OC did not have a right to seek from the lot owner, including legal fees incurred and other reasonable costs. The OC contended that, despite the lump sum containing recoverable and unrecoverable components, VCAT should be able to award the parts of the lump sum it considers recoverable.

Member Reid disagreed, stating that the lump sum cannot be split into arrears that are recoverable and not recoverable. Further, an OC cannot claim a lump sum even if the total only contains recoverable arrears. The issue lies with the fact that:

“such an amount does not meet the informational requirements of the Approved Form [CAV forms and] would still mean that such an amount is not recoverable.”

Member Reid acknowledged that VCAT members have commonly accepted lump sum amounts on Final Fee Notices, but departed from that approach, stating:

“There is benefit to consistency in decision making however this is not of itself sufficient reason to continue to make decisions in the same way over a long period of time.“

Practical implications for owners corporations and managers

The decision in Imam is likely to have significant operational implications for owners corporations and their managers. Many debt recovery processes have historically relied on accounting software that automatically carries forward historical arrears as a single line item in subsequent notices. Following Imam, this approach may expose an owners corporation to the risk that otherwise recoverable charges become unrecoverable because the Final Fee Notice does not meet the informational requirements of the approved form.

Owners corporations should therefore carefully review their debt recovery procedures and the functionality of any software used to generate Fee Notices and Final Fee Notices. In particular, managers should ensure that each outstanding fee, charge, interest amount or arrear is separately identified with the relevant due date and amount owing. While this may result in longer and more detailed notices, it will provide greater transparency to lot owners and reduce the risk of a recovery application being challenged on procedural grounds.

The decision also highlights the importance of treating statutory notice requirements as substantive obligations rather than mere administrative formalities when pursuing debt recovery claims.

Key takeaways

Following the decision in Imam, OCs and OC managers should:

  • Strictly comply with the CAV approved forms and the requirements of sections 31 and 32 of the OCA when relying on a Final Fee Notice to recover a debt at VCAT.
  • Individually itemise each amount claimed in the Final Fee Notice, including the relevant due date, description of the fee, charge, interest or arrears and amount owing.
  • Avoid relying on lump sum amounts, even where the amounts making up the lump sum may otherwise be recoverable.
  • Not rely on ledgers or previous Fee Notices to explain or substantiate a lump sum included in a Final Fee Notice.
  • Review their accounting software to ensure Final Fee Notices properly itemise outstanding amounts rather than carrying them forward as a lump sum.

Summary

A recent VCAT decision has changed how owners corporations recover levy arrears. In Owners Corporation PS415135N v Imam [2026] VCAT 704, the Tribunal found that lump sum “balance brought forward” amounts in Final Fee Notices are not recoverable unless each component is separately itemised. Owners corporations and managers must now ensure Final Fee Notices strictly comply with statutory requirements by identifying each fee, charge, due date and amount individually. Reliance on ledgers or prior notices to explain lump sums will no longer be sufficient.

 

If you are pursuing outstanding owners corporation arrears and need guidance on your debt recovery options, contact our Victorian Debt Recovery team on 1300 144 436 for advice.

 

Prepared by Leila Idris, Partner, and Ruby Huntingon, Lawyer, Grace Lawyers

 

Last updated on 18 September 2026

Fair Work Commission: AI-Generated Correspondence Can Make Body Corporate Disputes Worse

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NATIONAL

Artificial Intelligence can draft a detailed letter in seconds, but does that make it effective? On 30 July 2026, the Fair Work Commission decided a dispute involving a body corporate committee and caretaker and delivered a timely warning about the risks of using AI to prepare correspondence in a dispute. The decision, together with recent body corporate adjudications involving costs orders, highlights how AI-generated communications can escalate conflict, obscure legitimate concerns, and hinder effective dispute resolution.

How can AI-generated emails affect a body corporate committee dispute?

The decision concerned the Sanctuary at Buderim CTS 40659 in Queensland. Mrs Deidre de Bruyn was a representative of the caretaker and had been involved in a long-running dispute with the body corporate committee concerning the scope of the caretaker’s duties and related matters. The contractual dispute had also been referred to the Office of the Commissioner for Body Corporate and Community Management.

In De Bruyn AB2025/973, Commissioner McKinnon made a specific observation about correspondence sent by Mr de Bruyn, another representative of the caretaker, to the body corporate. The Commissioner stated:

“It is also necessary to make a general observation about the correspondence sent to Sanctuary by Mr de Bruyn. In my view, the correspondence was unhelpful. It appears to have been prepared with the use of an artificial intelligence tool. It is lengthy, wide-ranging, replete with generalisations, repetitive, and often couched in accusatory language. It is unsurprising that the Sanctuary Committee eventually chose not to engage with Mr de Bruyn in response.”

The observation is striking because the Commission did not simply criticise the use of AI as a matter of style. Rather, the problem was the effect the correspondence had on the dispute. The correspondence was considered so lengthy and repetitive, and so broadly and aggressively expressed, that the committee eventually chose not to engage with it. Importantly, the Commission found that this was ultimately detrimental to everyone involved because some of the concerns being raised were reasonable and ought to have been acknowledged and addressed.

What are the risks of AI-generated correspondence?

When an owner or committee member is involved in a dispute, there can be a temptation to prepare a comprehensive letter setting out every complaint, historical grievance and perceived inconsistency. AI makes it particularly easy to produce such a document. A short list of issues can quickly become many pages of polished prose. But length does not necessarily make correspondence more persuasive.

In a body corporate dispute, the recipient needs to be able to identify what the actual issue is, what is being requested and what response is required. If those points are buried beneath pages of background material, repetition and allegations, the correspondence may become counterproductive.

The Commissioner’s concern was not that every proposition made by Mr de Bruyn was wrong. To the contrary, the Commissioner expressly recognised that some of the concerns were reasonable and should have been addressed. The difficulty was that the manner in which those concerns were communicated contributed to the breakdown in communication.

Another risk of AI-generated correspondence is that it can produce language that sounds formal, comprehensive and confident. That can give the writer the impression that the document is persuasive simply because it is professionally worded. However, effective dispute correspondence requires judgment, not merely polished language.

AI can also encourage generalisation. Instead of dealing with a particular committee resolution or particular incident, correspondence may describe a broader pattern of “ongoing unreasonable conduct”, “systemic failures” or “persistent breaches”. Such language may obscure rather than clarify the actual dispute.

Why did the commission ban the use of AI in future correspondence between the parties?

The significance of the Decision is reinforced by the separate Order made by Commissioner McKinnon. Paragraph 1 of the Order provides that future communication between the parties is to be accurate and respectful, and expressly prohibits the use of artificial intelligence tools in preparing correspondence between the parties.

That is an unusually direct instruction.

The lesson for body corporate disputes is not necessarily that AI can never be used for any purpose. Rather, where parties are in a contentious relationship, correspondence needs to be carefully considered and genuinely responsive.

Body corporate disputes require particularly careful communication

Queensland body corporate disputes often involve multiple participants. A committee may comprise several owners. There may also be a body corporate manager, caretaker, letting agent, contractors and individual lot owners. Correspondence can subsequently become part of a committee record, an adjudication application, court proceedings or another formal process.

The Decision provides examples of how poor communication can compound an existing dispute. The Commission found, among other things, that certain information circulated to owners was inaccurate or incomplete, and that some concerns raised by Ms de Bruyn were not properly addressed. The Commission also identified failures to provide meaningful responses to certain complaints and concerns.

These examples demonstrate that there are two separate communication failures that can occur in a dispute: sending correspondence that is too extensive to be useful, and failing to respond meaningfully to correspondence that raises legitimate issues. Both can make resolution harder.

How can written communication be used more effectively?

Before sending correspondence, identify the precise issue. State the relevant facts briefly. Identify the decision, conduct or event that is disputed. Explain the evidence relied upon. State what outcome is sought. If a response is required, ask a clear question and provide a reasonable timeframe.

For example, instead of sending a lengthy letter alleging a committee has repeatedly acted improperly, an owner might identify three specific committee decisions, explain why each is disputed, attach the relevant documents and ask the committee to reconsider each decision.

Similarly, a committee responding to an owner should address the actual questions raised rather than responding with a general rejection of the owner’s position.

Summary

The De Bruyn decision is a further useful warning for anyone involved in a Queensland body corporate dispute. The Fair Work Commission highlight the risks of overreliance on AI-generated correspondence in body corporate disputes. Even where concerns are legitimate, lengthy and accusatory communications can undermine effective engagement.

 

If you are involved in a dispute involving excessive AI-generated correspondence, contact our team on 1300 144 436 for guidance.

 

Written by Brendan Pitman, Partner, Grace Lawyers QLD

 

Last updated on 26 August 2026

Breaking In (Legally): When Can a Body Corporate Enter a Lot with a Locksmith?

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QLD

Access to an individual lot can become a significant issue for a body corporate, particularly where the body corporate needs to investigate a water leak, carry out repairs, inspect building elements or determine whether work for which it is responsible is required.

Lot owners and occupiers understandably expect privacy and security within their homes, but in Queensland a body corporate has statutory powers that can, in appropriate circumstances, allow it to enter a lot without the owner’s or occupier’s consent.

The recent decision of Le Chelsea [2026] QBCCMmr 270 provides a useful illustration of how this power operates and confirms the power of an adjudicator to permit a locksmith to gain access to a lot and the locksmith’s costs to be recovered.

When can a body corporate enter a lot?

The starting point is section 163 of the Body Corporate and Community Management Act 1997. Section 163 gives an authorised person power to enter a lot, and remain there for as long as reasonably necessary, to inspect the lot and determine whether work that the body corporate is authorised or required to carry out is necessary, or to carry out that work.

For example, access may be justified where the body corporate needs to investigate the source of a water leak, inspect building elements for which it has responsibility, determine the cause of damage, or undertake necessary maintenance or repairs.

In Le Chelsea, the body corporate was investigating water ingress affecting the lot below. The precise source of the leak was unknown, and it was possible that the problem involved a bathroom membrane or another building element for which the body corporate could have responsibility. The adjudicator accepted that inspecting the lot above was reasonably necessary to determine the source and whether body corporate work was required.

What notice must a body corporate give before entering a lot?

Unless there is an emergency, the body corporate generally needs to give at least seven days’ written notice before exercising the statutory power to enter a lot.

The entry must also occur at a reasonable time and comply with the security or other arrangements ordinarily applying to people entering the lot.

The notice should be clear and practical. It should identify the proposed time of entry, the purpose of the inspection or work, and the persons who will be attending. Providing sufficient detail can reduce disputes and demonstrate that the body corporate is exercising its power reasonably.

In Le Chelsea, notice was given more than seven days before the proposed entry. The notice identified the proposed three-hour period, who would enter, and the purpose of the inspection. The adjudicator considered the notice appropriate and reasonable.

An emergency is treated differently. Section 163 allows entry in an emergency at any time, with or without notice. This can be particularly important where a delay could cause significant damage – for example, an active water leak causing substantial damage to another lot or common property.

Does the body corporate need the owner’s/occupier’s consent?

One of the most important points from Le Chelsea is that the statutory power is not dependant on the consent of the owner or occupier.

The adjudicator expressly found that the body corporate does not need the owner’s or occupier’s agreement to exercise the section 163 power.

The owner or occupier may have questions about why access is required, who will attend or what work is proposed. Those concerns can be discussed with the body corporate. However, the adjudicator confirmed that disagreement about those matters does not, by itself, provide a basis for refusing entry where statutory power has been properly exercised.

The section 163 power is also important because it operates independently of residential tenancy arrangements. The Le Chelsea decision confirms that the body corporate’s statutory power of entry is separate from the legislation and lease requirements that apply when a landlord or agent enters a tenanted property.

What if the owner or occupier refuses access?

If access is refused, the body corporate does not necessarily have to accept the refusal as the end of the matter. It is an offence to do so, and the occupier is liable to pay a monetary fine. An adjudicator can also make orders facilitating access.

The latter is what occurred in Le Chelsea. The body corporate had already issued a valid entry notice, but its attempt to enter the lot was unsuccessful. Further attempts to resolve the dispute were also unsuccessful. The adjudicator therefore made orders requiring the body corporate to issue a new notice and confirming that authorised persons could enter at the notified time.

Significantly, the adjudicator ordered that the body corporate could resolve to engage a qualified professional, such as a locksmith, to facilitate access if the lot was not accessible at the notified time. The body corporate could also resolve to recover the reasonable cost of the locksmith from the lot owner as a debt.

This does not mean a body corporate should simply arrange for forced entry whenever a lot owner fails to cooperate. The statutory requirements must first be satisfied, and the body corporate must act reasonably.

A practical checklist for committees seeking lot access

Where access to a lot is required, a body corporate should generally:

  1. Identify why access is required and confirm that the purpose falls within section 163.
  2. Ensure the body corporate has properly authorised the persons who will enter.
  3. Give the required written notice, normally at least seven days before entry.
  4. Specify the proposed time, purpose and persons attending.
  5. Keep records of the decision, notice and communications with the owner or occupier.
  6. If access is refused, consider further correspondence with the occupier to understand why, and file an application in the Commissioner’s Office where appropriate.

Summary

Bodies Corporate have a powerful statutory right to access an individual lot, but that right must be exercised for a proper purpose and in accordance with the requirements of section 163 of the Body Corporate and Community Management Act 1997.

The recent Le Chelsea decision demonstrates that where an owner or occupier refuses access despite a valid notice, the body corporate can seek adjudication orders to facilitate entry. In appropriate circumstances, those orders may also permit the body corporate to arrange for a locksmith and recover reasonable costs from the lot owner.

 

If you have questions about entering a lot, obtaining access for inspections or repairs, or responding to a refusal of access, contact us on 1300 144 436 or at enquiries@gracelawyers.com.au.

 

Written by Brendan Pitman, Partner, Grace Lawyers QLD

 

Last updated on 21 August 2026

Supreme Court Clarifies Major Waterproofing Defects and the Duty under the DBPA

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NSW

For strata managers dealing with persistent building defects, limitation periods and uncertain liability, the Supreme Court’s decision in Strata Plan 92183 v Samdora Pty Ltd [2026] NSWSC 406 is a significant development. The judgment provides valuable guidance on when waterproofing and drainage issues may be classified as “Major Defects” under the Home Building Act (HBA), while also reinforcing the obligations of builders and nominated supervisors under the Design and Building Practitioners Act 2020 (NSW) (DBPA). The case offers important lessons for managing defect claims, assessing risk and protecting the interests of owners corporations.

Were the waterproofing defects considered major defects?

The case concerned the development of a nine-unit residential building in Mangerton by the Defendants. The case started as many do in NCAT and there was a long history of emails between the parties trying to come to an agreement about what defects the builder agreed to return to rectify. Unfortunately, before the builder managed to complete the rectification work adequately, it fell into administration. The Supreme Court then had to review many “without prejudice” emails to determine what had exactly been “agreed” to and by which parties.

The original agreement for the rectification work dated back to 2019 and, after the disappearance of the builder, the case proceeded in the Supreme Court against the Developer as well as the nominated supervisor of the builder in his personal capacity under the DBPA.

In respect of the HBA claim, it had been agreed between the parties that, due to the age of the building, only claims relating to major defects remained claimable by the Plaintiff (owners corporation). The remaining defects claimed were categorised as “general” and “waterproofing”. The court heard arguments between the parties as to whether these defects, in particular the “waterproofing” defects, were Major Defects.

The definition of what is a “Major Defect” under the HBA is in section 18E which refers to:

“a defect in a major element of a building that is attributable to defective design, defective or faulty workmanship, defective materials, or a failure to comply with the structural performance requirements of the National Construction Code…”

So, what is meant by a “Major Element”?

A “Major Element” is defined by section 18E of the HBA as:

 “…an internal or external load-bearing component of a building that is essential to the stability of the building, or any part of it (including but not limited to foundations and footings, floors, walls, roofs, columns and beams), or a fire safety system, or waterproofing…” and that “… causes, or is likely to cause… the inability to inhabit or use the building (or any part of the building) for its intended purpose, or the destruction of the building or any part of the building, or a threat of collapse of the building or any part of the building”.

The owners corporation’s expert argued that all the hydraulic defects were “waterproofing” and therefore were Major Defects. On behalf of the Defendants, the Court was referred to the NCAT Appeal Panel decision of Ashton v Stevenson [2020] where the Panel, had regard to the fact that the design and purpose of the drainage and bund in an outdoor terrace area was to collect and control rainwater in considering whether it was “waterproofing”. It was submitted by the Defendants that, based upon the Ashton decision, only if both the design and purpose of a defective building element was to prevent water from entering the building, only then could it meet the description of “waterproofing” for the purpose of the HBA. The Court decided that the Panel was not intending to establish a “design and purpose” test rather it was merely undertaking the task of making a factual finding as to whether a particular element is “waterproofing”. Kunc J decided that:

“… an element will be waterproofing if its purpose is to prevent ingress of water into a building. This means that in some cases a particular element may be waterproofing because of how it is deployed and in other cases it will not be waterproofing.”

In this regard, the Court found that the stormwater overland flow path was a Major Defect, as was the rainwater overflow and balcony drainage system. The Court did not accept that actual evidence of water ingress was required.

Negligence under the DBPA: What must be proven?

With respect to the claim against the nominated supervisor of the builder, the Court also gave some clarification as to what needs to be established for a claim in negligence under the DBPA. The judge referred to the general principles of negligence under the Civil Liability Act 2022 (NSW) including that a person is not negligent in failing to take precautions against a risk of harm unless the risk was foreseeable and not insignificant and that in the circumstances a reasonable person in that position would have taken those precautions.

Kunc J referred to the leading High Court decision of Pafburn Pty Ltd v Strata Plan 84674 confirming that the duty was a personal non-delegable duty on the supervisor Mr Nassif and therefore he could not discharge the duty merely by exercising reasonable care in arranging for another person to carry out any work or task within the scope of the duty.

Can a nominated supervisor be personally liable under the DBPA?

The Court went on to find that Mr Nassif had breached his duty under s 37 of the DBPA because he had failed to exercise reasonable care to ensure that the work was relevantly compliant with the statutory warranties in s 18B(1)(c) of the HBA warranting that the work would comply with the warranties or any other law. So, the precaution that he had failed to take against the risk of harm to ensure the work was relevantly compliant was to have properly carried out “an active supervisory role” during the construction process by regular inspections and checking of the work such that the defects would have been identified and rectified prior to the completion of the development. The negligent failure to play an active supervisory role was a necessary condition of the harm because, if he had undertaken that role properly, the harm of the defects and the cost of repairing them would not have arisen because the defects would not be there.

What does active supervision require under the DBPA?

Those acting for Mr Nassif tried to argue that he relied on the fact that other professionals such as the certifier had inspected the building work but did not identify any of the defects however that argument was rejected by the Court and in particular noting that “it is, regrettably, a common experience that buildings for which an occupation certificate had been issued are later found to have defects.” In the same way, it is also regrettably a common argument that because a building has an occupation certificate then it must be free from defects. Unfortunately as we are aware in most cases that is not the reality.

What are the key takeaways for strata managers?

  1. What is or is not a major defect will be a factual finding for the Court or NCAT member to make in any particular case and some particular element may be waterproofing in some cases whereas the exact same thing may not be seen as waterproofing in another case;
  2. A builder can be in breach of its duty under section 37 of the DBPA by failing to reasonably exercise an active supervisory role to ensure that the building complied with the statutory warranties.

Summary

Strata Plan 92183 v Samdora Pty Ltd [2026] NSWSC 406 clarifies when waterproofing and drainage defects may constitute Major Defects under the Home Building Act and confirms that nominated supervisors can be personally liable under the Design and Building Practitioners Act for failing to actively supervise construction works. For strata managers, the decision provides practical guidance on identifying viable defect claims, assessing limitation risks and pursuing recovery against the parties responsible for defective building work.

 

If you would like advice on identifying viable building defect claims and pursuing recovery from developers or other responsible parties, contact Grace Lawyers on 1300 144 436 or enquiries@gracelawyers.com.au

 

Written by Duncan Campbell, Partner and Paul Berrill Special Counsel, Grace Lawyers Building and Construction.

 

Last updated on 14 August 2026

Australia’s AML/CTF Reforms: What Every Strata Manager Needs to Know

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NATIONAL

Australia has obligations and responsibilities on an international level to prevent money laundering, terrorism financing and proliferation financing domestically. A 2015 review conducted by the Financial Action Task Force, the watchdog responsible for international Anti-Money Laundering/Counter-Terrorism Financing (AML/CTF) compliance, identified significant deficiencies in Australia’s AML/CTF framework which resulted in reforms to the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) (the Act) that came into effect on 31 March 2026 and 1 July 2026.

The main aim of the reforms is to mitigate the risk of money laundering and terrorism financing in Australia. Through the introduction of more stringent customer identification processes, and a requirement for companies to self-identify risks associated with their services, the reforms mandate a more hands on approach focussed on individual compliance and reporting.

Which businesses are captured by the new Tranche 2 AML/CTF obligations?

One of the most significant reforms introduced in 2026 is the expansion of the definition of “designated services” and the introduction of “Tranche 2” obligations, which imposes reporting obligations on further entities including:

  • Accountants
  • Conveyancers
  • Jewellers
  • Lawyers
  • Precious stone and metal dealers
  • Real estate professionals

How do the AML/CTF Reforms affect strata managers?

The Minister for Home Affairs has announced an exemption to Strata Managers being considered real estate professionals, unless they represent company title schemes. Whilst all strata managing companies do not necessarily provide designated services, as best practice, all Strata Managers should be alert and exercise caution in the event of any suspicious transactions.

Strata Managers managing company title schemes where they are the Secretary of the Scheme or their business address is the address for service for the company title may be required to enrol and register through the AUSTRAC website and implement AML/CTF policies, procedures and risk mitigation measures.

If you are unsure whether your company is required to enrol, you should go to the AUSTRAC website and complete the survey to confirm.

What AML/CTF Policies Should Strata Management Companies Implement?

Strata management companies confirmed to be outside the exemption, and managing company title schemes should implement policies including:

  • Customer Due Diligence (CDD) to verify the identity of clients and beneficial owners. This will ensure only properly identified individuals are authorised to provide instructions to the strata manager relating to a scheme’s funds.
  • Risk Assessments identifying the most significant risks for the strata managers and providing options for mitigation or escalation.
  • Compliance Officer and personnel designated to oversee the implementation and ongoing training and compliance with the AML/CTF program.
  • Record keeping documents and instructions for submitting Suspicious Matter Reports and Threshold Transaction Reports (TTRs).

Why is AML/CTF training essential for strata management staff?

Staff members who deal directly with customers, manage, or assist with the management of company title schemes, including relevant strata managers, assistant strata managers and front of house office staff must undergo training to understand warning signs and risks associated with transactions and customers.

What is threshold transaction reporting and when is it required?

As best practice, all strata management companies should implement a policy around how to handle and report threshold transactions. Any payment made in cash over $10,000.00 must be reported to AUSTRAC within 10 business days of the transaction occurring. TTRs must be submitted through AUSTRAC’s online portal and must include:

  • Your business or company.
  • The date of the report.
  • Details of the individual completing the report (usually the person who received the funds or the compliance officer for the company).
  • Details of the customer who made the cash payment.
  • Any other party involved in the cash payment.

For more information on threshold transaction reporting, please view AUSTRAC’s website.

What is a suspicious matter report and when should it be lodged?

Sometimes, when individuals are participating in fraudulent acts or payments, they will deposit or make payments of a large amount in smaller amounts just under $10,000.00 (for instance, they may make several payments of $9,999.00 to avoid triggering threshold transaction reporting).

If repeat amounts are being paid in such a manner, the Strata Manager should report the transactions to AUSTRAC in the same manner as outlined above for TTRs.

Strata Managers should not report repeat transactions that are payments of strata levies (for instance, if every month a Lot Owner pays $9,950.00 as payment of Strata Levies, this would not be considered a suspicious matter and reporting would not be required).

How should strata managers manage property ownership changes for AML/CTF compliance?

When a Lot in a strata scheme or a community association is sold, the Purchaser’s representative must send to the Strata Manager a Notice of Interest confirming the sale pursuant to section 22 of the Strata Schemes Management Act 2015 (NSW) and section 20 of the Community Land Management Act 2021 (NSW).

The Notice should include:

  • Name and address of the new Lot Owner
  • Date of settlement
  • Address of the Lot in question
  • Signatures of the representatives of the Purchaser and Vendor

Once the Strata Manager has received the Notice, they should add the new Lot Owner to the register and send an acknowledgement email or letter to the address on the Notice.

Strata Managers should maintain due diligence regarding these notices, and if any details are missing from the Notice, they should immediately contact the Purchaser’s representative to update and confirm the details.

Should strata managers conduct their own verification of identity checks?

Strata Managers should note a thorough verification of the new Lot Owner may be required as a risk mitigation measure, despite the Purchaser’s representative’s obligations to complete the verification of identity process. We recommend Strata Managers complete their own verification of identity as best practice and should familiarise themselves with all Lot Owners to ensure no fraudulent activity or payments are made or received.

What are the safest payment methods for strata levy transactions?

Once a new Lot Owner is added to the register, they will be set up with an account for payment of levies. We recommend your Strata Managing Company utilises a payment system through secure platforms such as:

  • BPAY
  • StrataPay
  • DEFT Payments

The platforms have security measures in place to prevent fraudulent activity and heightened authentication options, including with unique client identification numbers and frequent changes to passwords.

How can strata managers detect potential fraudulent payments?

Whilst the payment platforms have stringent methods in place to prevent fraudulent activity, Strata Managers should monitor all payments and note any repeat payments of the exact same amount (outside usual levy amounts) or unexplained changes in accounts paying the levies.

Summary

Australia’s 2026 AML/CTF reforms mark a significant shift in the compliance obligations of businesses involved in financial transactions, including many operating within the strata sector. By implementing robust customer due diligence, risk assessment, reporting and record-keeping processes, strata managers can play an important role in preventing money laundering and terrorism financing. Proactive compliance, ongoing staff training and vigilant monitoring of transactions will help protect strata schemes, ensure regulatory compliance and reduce the risk of fraudulent activity within the industry.

 

If you require guidance on understanding your AML/CTF obligations, please contact our offices on 1300 144 436 and we would be happy to assist.

 

Written by Anna Hahm, Strata and Property partner, and Holly Mack, lawyer, Grace Lawyers

 

Last updated on 4 August 2026

NSW Court of Appeal Confirms Builders Have No Automatic Right to Return and Rectify Defects

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NSW

In the recent Court of Appeal decision of Ceerose Pty Ltd v The Owners – Strata Plan No.89074 [2025] NSWCA 235 the court upheld the long-established principal that the builder is not entitled to return to rectify their defects and confirmed that whether or not they should be allowed to return will always depend upon what is reasonable.

The case involved the “Eliza” building on Elizabeth Street in Sydney, overlooking Hyde Park and St Mary’s Cathedral which made headlines when completed in 2014 after the three-storey penthouse sold for a then record $15 million.

Does a builder have a right to return and rectify strata defects?

The Owners Corporation of SP 89074 served a 600-page expert report claiming more than 300 defects including urgent fire safety works, drainage, flooring and bathroom issues. The builder responded by agreeing to return to rectify nearly 100 of the defects and stating that they were always ready, willing and able to rectify any genuine defects.

This is common for a large builder because it is actually highly unlikely that there will not be any defects in a large building and it will always be much quicker and cheaper for a builder to rectify their own defects because they are familiar with their site and the products used. There is also always the danger that a new builder will charge more to rectify another builder’s defects and will often discover more problems.

This is partly why the NSW government, which is responsible for licensing builders, includes section 48MA in the Home Building Act such that:

“A court or tribunal determining a building claim involving an allegation of defective residential building work or specialist work by a party to the proceedings (the responsible party) is to have regard to the principle that rectification work by the responsible party is the preferred outcome”.

In NCAT, where the vast majority of these building claims are initially brought, the tribunal’s stated preferred position is for the original builder to return to rectify their own defects often by agreement or by an NCAT work order.

Can owners deny builder access to rectify defects?

There is however no actual “right” for the builder to return. After completion of the building it is owned by the Owners Corporation and they can determine who enters the site to do work. In the Eliza case, the owners decided they had lost faith in the ability or the willingness of the builder to return to adequately rectify the defects. This case was similar to other Supreme Court cases like SP 76674 v Di Blasio and Owners Strata Plan 89041v Galyan Pty Ltd. I previously had an NCAT case where the original builder still lived in the building and the other owners had all lost faith in his ability to rectify the building properly even though it was much cheaper than hiring a new builder.

Reasonable owners will generally allow the original builder back to rectify defects because it does not cost them anything and usually gets the building fixed. However if they keep having to beg the builder to return and everyone gets annoyed with each other  and the defects still don’t seem to be getting fixed then the owners may have to commence legal proceedings because their statutory warranty rights are about to expire. At this point the goodwill of the builder can also expire.

What is an owner’s duty to mitigate loss in a building defect claim?

In the case of the Eliza building, there were two key issues that the Court had to determine. The first was the owners’ “duty to mitigate”. Where a Plaintiff is claiming loss against a Defendant they have to take reasonable steps to minimise their damage. That may include allowing the builder back to fix the defects if that was reasonable. Similarly the Plaintiff is not entitled to an upgrade. So if you buy a rundown old unit with chrome taps that don’t work, you can replace them but if you choose a solid gold fitting you cannot expect the original builder to cover the extra cost of the better product.

In the Eliza building after apparently a number of requests by the owners to the builder to rectify defects the owners advised the builder that they had lost confidence in the builder and that they were unwilling to let the builder have any further opportunities to repair the defects. The case was referred to a Supreme Court Referee who produced a report on liability issues as well as a report on the quantum of the cost to rectify the defects. The builder argues that the owners had failed to mitigate their loss because they had refused to allow the builder access to rectify the defects at no cost to the owners. The Referee concluded that the onus was on the builder to prove that the owner’s decision to deny access to them was unreasonable in all the circumstances. He concluded that the owners had not acted unreasonably in refusing access to the builder to carry out rectification.

The Supreme Court judge accepted the Referee’s report and entered judgment for the owners in the sum of $1.95 million. The builder appealed arguing that the judge made an error regarding the owner’s duty to mitigate their loss and also that there was a “positive obligation” on the owners to provide the builder with an opportunity to rectify the defects.

Who must prove that refusing access was unreasonable?

The key issue before the Court of Appeal was which party had to prove that the owners’ refusal to allow the builder to return was unreasonable. The builder argued that once they had raised the issue in their defence of the failure to mitigate then the onus of proof shifted to the owners to prove that their refusal to allow the builder to return was unreasonable. The Court of Appeal ultimately agreed with the owners and the court that the builder had the duty to prove that the owners had been unreasonable and that they had failed to establish that.

Why did the Court of Appeal rule in favour of the owners?

The builder had argued that the owners may have manufactured the argument of their loss of confidence in the builder because they preferred to get a lump sum award that they could use when and how they chose. The Court of Appeal referred to the previous cases and determined that there is not any special common law rule applicable to building contracts in this regard and that the owners were not required to demonstrate excessive diligence nor perfection.

As is so often the case it came down to what the court determined to be reasonable in all the circumstances and ultimately the builders failed to establish that the owners had been unreasonable.

What are the practical lessons for owners corporations and builders?

Key takeaways:

  • There is no positive obligation on the owners to provide the builder with an opportunity to return to rectify their own defects;
  • A refusal to allow the builder to return to rectify can be argued as a failure to mitigate the owners’ loss, but that is just the start of the argument. The builder has the onus to prove that the owner’s refusal of access was unreasonable;
  • The onus did not shift to the owners to prove they were not unreasonable, the onus was always on the builder to prove that the owners were unreasonable;
  • The Court of Appeal in analysing the evidence of the owner’s behaviour reiterated that in the case of a nil all draw in terms of evidence the party with the onus of proof (here the builder) had failed to prove the refusal was unreasonable and therefore they lost;
  • It will be more difficult to prove that an Owners Corporation is being unreasonable because it is a collection of minds that has an obligation to do what is best for the whole Owners Corporation; and
  • In most cases it will still be cheaper, quicker and easier to allow the original builder to return to rectify the defects.

Summary

In Ceerose Pty Ltd v The Owners – Strata Plan No. 89074 [2025] NSWCA 235, the NSW Court of Appeal confirmed that owners are not obliged to allow a builder to return and rectify defects. While rectification by the original builder remains the preferred outcome, owners may refuse access if that is reasonable in the circumstances. Importantly, the builder bears the burden of proving the refusal was unreasonable. The decision reinforces that each case depends on its facts and the standard of reasonableness.

 

If you require guidance on building defect claims, statutory warranty disputes, Owners Corporation rights, or construction litigation, please contact our Building and Construction team on 1300 144 436.

 

Written by Duncan Campbell, Building and Construction Partner, Grace Lawyers

 

Last updated on 23 July 2026

What NSW Strata Managers Need to Know About the 2023–2026 Strata Law Reforms

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NSW

This article applies to strata schemes in NSW governed by the Strata Schemes Management Act 2015.

The most significant overhaul of strata legislation in over a decade is well underway. Here is what it means for you, your clients and the schemes you manage.

Strata living is no longer a niche segment of the NSW property market. Today, approximately 1.2 million people, representing 25% of the state’s population, live in strata or community title schemes. By 2040, the NSW Government projects that figure will rise to 50% of greater Sydney’s population.

That growth is not without consequence. As strata schemes increase in scale and complexity, so too do the governance demands placed on everyone involved in running them, including professional strata managers. Many schemes now manage assets worth tens of millions of dollars, operate budgets comparable to small businesses, and house hundreds of residents with competing expectations.

It is against this backdrop that NSW has embarked on one of the most comprehensive strata law reform programs in over a decade — a staged series of legislative changes spanning 2023 through to 2026, arising directly from the 2021 statutory review of the Strata Schemes Management Act 2015 (SSMA) and the Strata Schemes Development Act 2015 (SSDA).

These are not incremental tweaks. They are structural reforms and understanding them is now fundamental to professional strata practice.

Why reform? The policy drivers you need to understand

The 2021 statutory review identified persistent, systemic problems across the sector. Maintenance obligations were being deferred or ignored. Governance failures were going unchecked for years. Owners lacked meaningful access to financial information about their own schemes, and the regulatory model, heavily reliant on complaint-driven enforcement, was demonstrably insufficient for the complexity of modern strata living.

The resulting reform agenda is built around three interconnected policy goals:

Accountability — shifting from a self-regulated model to one of active, proactive regulatory oversight, with expanded powers for NSW Fair Trading to investigate breaches, compel document production, issue compliance notices and intervene in dysfunctional schemes.

Consumer protection — recognising that for most lot owners, their strata property represents their single largest financial investment, and that legal frameworks must reflect this reality with enhanced disclosure obligations, protections against unfair contract terms and clearer information rights.

Modernisation — professionalising governance structures so they match the scale and complexity of contemporary strata schemes, including mandatory training, standardised documentation and improved digital transparency. 

A staged rollout: what has changed and when

One of the defining features of this reform program is its staged implementation. Changes have been, and continue to be, introduced across six distinct phases.

Stage 1 (2023): Governance flexibility and the courts

The first stage introduced amendments to both strata Acts with a focus on strata renewal processes, empowering the Land and Environment Court to address procedural irregularities with greater discretion. Legally significant, this stage signalled a deliberate move away from rigid procedural formalism toward outcome-based decision-making.

Stage 2 (February–March 2025): Manager accountability

This stage delivered the first major structural changes affecting strata managers directly, through the Strata Managing Agents Legislation Amendment Act 2024 and early provisions of the Strata Schemes Legislation Amendment Act 2025. Key amendments included lowering the threshold for removal of strata committee office-bearers from special to ordinary resolution under s 45 SSMA, and introducing mandatory periodic reporting obligations under s 55 SSMA. In practical terms, this stage marked the beginning of fiduciary-style accountability for managing agents.

Stage 3 (1 July 2025): Duties, liability and extended maintenance obligations

The July 2025 reforms are among the most substantive in the entire program. Amended s 37 SSMA now codifies legal duties for strata committee members, who must act honestly, fairly, and with due care and diligence — standards aligned with corporate governance principles. Section 55 introduces mandatory six-monthly reporting obligations for strata managing agents. Perhaps most significantly for risk management, the limitation period for maintenance claims under s 106 SSMA has been extended from two years to six years, substantially increasing the legal exposure of owners corporations and their managers.

Stage 4 (27 October 2025): Enforcement, financial regulation and building managers

This stage introduced a formal regulatory enforcement model. NSW Fair Trading now holds expanded investigative and enforcement powers, including the ability to seek NCAT orders for the appointment of compulsory managing agents. Financial hardship information statements became mandatory in levy notices, alongside standardised payment plan frameworks. Building managers were also brought within a clearer statutory framework, with formal obligations to act in the best interests of the owners corporation and disclose all financial interests and relationships.

Stage 5 (1 April 2026): Transparency, standardisation and disclosure

The most recent reforms, now in effect, represent the most comprehensive package in the entire program. Section 80 SSMA requires standardised 10-year capital works fund plans, ensuring consistent long-term financial planning across schemes. Section 184 SSMA strata information certificates have been significantly expanded to include compliance actions, financial liabilities and governance information. Developers are now required to provide an Initial Maintenance Schedule (IMS) in a prescribed form, with independent certification mandatory for multi-storey schemes. Together, these changes introduce a standardised disclosure regime aimed at reducing information asymmetry in the strata market.

Stage 6 (late 2026): What is still to come

Further reforms are anticipated in the second half of 2026, including mandatory training requirements for strata committee members and expanded conflict-of-interest disclosure obligations — including requirements to disclose embedded network arrangements in off-the-plan contracts for sale. The reform agenda, in short, is not yet complete.

Your role is fundamentally changing

For strata managers, the cumulative effect of these reforms is significant. The legislation now treats managing agents as highly regulated actors — not simply contracted administrators — subject to disclosure obligations, conflict-of-interest frameworks, and reporting requirements that bear closer resemblance to fiduciary duties than to standard service provider arrangements.

Under s 57 SSMA, agents must not accept commissions or benefits unless approved by the owners corporation by general meeting resolution, with mandatory disclosure of the commission amount and calculation, the nature of any supplier relationship, and why approval is in the owners corporation’s best interests. Under ss 55 and 60 SSMA, six-monthly function reporting and AGM disclosure of past and anticipated commissions are now legal requirements.

Every financial relationship with contractors, insurers, and developers, must be identified, disclosed, and formally justified. Failure to comply carries exposure to regulatory penalties and NCAT orders, including orders requiring repayment of undisclosed commissions. 

The strategic challenges you should be planning for

The reforms are broadly welcome and the policy rationale is sound. But implementation presents real and practical challenges that strata managers will increasingly be asked to help navigate.

The capacity gap is perhaps the most pressing. Strata committees remain predominantly composed of volunteer lot owners, often without legal, financial or governance training. The reforms now impose legally enforceable duties on those volunteers, including documentation requirements and oversight obligations that assume a level of institutional capacity many smaller schemes simply do not possess. Managers will find themselves playing an increasingly important support and advisory role.

The compliance burden is unevenly distributed. A large residential tower with professional building management has a very different capacity than three lot schemes that have been self-managed for a decade. The reforms apply uniformly across schemes, which means the relative burden on smaller schemes, in terms of compliance cost, administrative effort and professional advice requirements, is considerably higher.

The disclosure and conflict-of-interest framework adds layers of procedural complexity that require ongoing vigilance. Identifying and documenting every commercial relationship, securing proper approvals and ensuring committees genuinely understand (rather than simply sign off on) disclosure documents is a material operational challenge.

Continuous adaptation is now the baseline. With staged reforms running across multiple years and further changes anticipated, maintaining current knowledge and updating internal systems and processes is an ongoing professional obligation, not a periodic task. 

Preparing your strata practice for what comes next

The practical steps for strata managers are clear:

  1. Review your disclosure systems and commission approval processes against the updated requirements under ss 55, 57 and 60 SSMA.
  2. Audit your capital works fund planning processes ahead of the standardised 10-year plan requirements under s 80 SSMA.
  3. Ensure clients understand their obligations under the extended maintenance limitation period in s 106 SSMA.
  4. And begin preparing for mandatory committee training requirements, which will likely require you to direct clients to appropriate resources when Stage 6 reforms take effect.

The reforms set a framework. The profession’s job is to make that framework operational, accessible and sustainable for the schemes — large and small — that rely on professional management to function effectively. 

Summary

The NSW strata reform program represents a generational shift in how strata schemes are governed and regulated. Legislation sets the framework, but capability, systems and culture determine whether reform delivers real outcomes. That cultural shift must happen on two fronts — within committees, where informal governance must give way to structured compliance, and within agencies, where higher professional standards are now both expected and enforceable. The most effective strata managers will not simply absorb these changes, they will use them as a catalyst to raise standards, rebuild client trust, and lead a profession that is rapidly maturing.

 

Need guidance on implementing the strata reforms? Our NSW Strata and Property team has the expertise to help you navigate the legislative changes and ensure your practice is fully compliant. Contact us today on 1300 144 436.

 

Written by Anna Hahm, Partner, Grace Lawyers

 

Last updated on 21 May 2026

Why Owners Corporations Should Engage a Specialist Building and Construction Lawyer

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NSW

Building and construction issues within strata schemes can be disruptive, costly and legally complex. Whether the matter involves building defects, incomplete works, contract disputes, or common property damage, lot owners face a legal landscape shaped by technical legislation, strict timeframes and specialised dispute‑resolution pathways. In this environment, the quality of legal advice is critical.

While many people instinctively turn to a local family or general practice lawyer, construction law is not an area where generalists can safely “dabble.” The risks are too high, and the consequences of incorrect advice can be significant. Engaging a specialist building and construction lawyer ensures that lot owners receive accurate, strategic and industry‑informed guidance from the outset.

This article explains why specialist expertise matters, outlines the key legislation governing building disputes, and highlights the essential points lot owners must understand when navigating construction issues.

The legislative framework governing building and strata disputes

Strata and construction matters in New South Wales are governed by a complex network of legislation, including:

  • Home Building Act 1989 (NSW) – Statutory warranties, licensing, and residential building work requirements.
  • Strata Schemes Management Act 2015 (NSW) – Responsibilities for common property, defect claims, and strata committee obligations.
  • Building and Construction Industry Security of Payment Act 1999 (NSW) – Payment claims and adjudication processes.
  • Civil and Administrative Tribunal Act 2013 (NSW) – NCAT’s jurisdiction and procedures.
  • Design and Building Practitioners Act 2020 (NSW) – Duty of care obligations and compliance declarations.
  • Environmental Planning and Assessment Act 1979 (NSW) – Development approvals and compliance.

A specialist construction lawyer works with these laws daily and understands how they interact in practice. A generalist lawyer may not have the depth of experience required to navigate this framework effectively.

Why lot owners need a specialist building and construction lawyer

  1. Accurate interpretation of construction contracts

    Construction contracts—whether for remedial works, upgrades, or new builds—contain detailed provisions relating to variations, delays, defects, payment schedules, and dispute‑resolution mechanisms. A specialist lawyer understands these clauses and ensures compliance with the Home Building Act and other legislation. This reduces the risk of disputes and protects lot owners from unfair contractual terms.

  2. Understanding of technical construction issues

    Building disputes often involve complex technical matters such as waterproofing failures, structural defects, fire safety non‑compliance, or incomplete works. A specialist lawyer is familiar with engineering reports, expert evidence, and industry standards. This allows them to quickly identify the core issues and develop a strategy grounded in both legal and technical realities.

    General practice lawyers may struggle to interpret technical evidence or understand the practical implications of construction‑specific issues.

  3. Effective dispute resolution that avoids costly court proceedings.

    One of the most significant advantages of engaging a specialist construction lawyer is their ability to resolve disputes efficiently and without unnecessary escalation. Court proceedings can be lengthy, expensive, and disruptive for lot owners. A specialist understands the dispute‑resolution pathways available under the Home Building Act, the Strata Schemes Management Act, and the Security of Payment Act, and uses this knowledge to guide clients toward early, cost‑effective outcomes.

    Through strategic negotiation, mediation, and targeted use of expert evidence, a specialist can often resolve issues long before litigation becomes necessary. This approach saves lot owners substantial time, stress, and financial burden.

  1. Experience with NCAT and specialist forums

    Many building disputes involving strata schemes are heard in the NSW Civil and Administrative Tribunal (NCAT). NCAT has unique procedural rules, strict evidence requirements, and specific expectations regarding expert reports and Scott Schedules.

    A specialist construction lawyer:

    • Appears regularly before NCAT
    • Understands how tribunal members approach building matters
    • Prepares compliant evidence and submissions
    • Ensures statutory warranty claims are properly framed
    • Manages expert evidence in accordance with tribunal rules

    This experience significantly improves the likelihood of a favourable outcome.

  2. Cost‑effective advice through efficiency

    Although a specialist may have a higher hourly rate, they typically resolve matters more efficiently because they already understand the issues, the legislation, and the dispute‑resolution pathways. This efficiency often results in lower overall legal costs and a more streamlined process.

  3. Proactive risk management for lot owners

    A specialist construction lawyer helps lot owners and strata committees:

    • Identify risks before signing contracts
    • Ensure compliance with statutory warranties
    • Recognise early signs of builder non‑compliance
    • Respond promptly to defective or incomplete work
    • Preserve rights under the Home Building Act and the Design and Building Practitioners Act

    Proactive advice can prevent disputes and protect the financial interests of the entire strata scheme.

Key points lot owners must understand about building and construction disputes

  1. Statutory warranty timeframes are strict

    Under the Home Building Act, lot owners must act within:

    • 6 years for major defects
    • 2 years for all other defects

    Delaying action can result in the loss of legal rights.

  2. Common property defects are the Owners Corporation’s responsibility

    Lot owners should understand:

    • The owners corporation must repair and maintain common property
    • Defect claims often involve both individual lots and common property
    • The strata committee must act promptly to avoid further damage or liability

  3. Expert evidence is critical

    NCAT and courts rely heavily on expert reports. A specialist lawyer ensures:

    • The right expert is engaged
    • Reports comply with tribunal rules
    • Evidence is strategically presented

    Poorly prepared expert evidence can undermine an otherwise strong claim.

  4. Early intervention prevents escalation

    The earlier a specialist lawyer becomes involved, the more options are available to resolve the matter efficiently. Early advice can prevent:

    • Builder disputes from escalating
    • Payment issues from becoming Security of Payment claims
    • Defects from worsening
    • Rights from expiring

  5. Not all lawyers understand strata construction law

    General practice lawyers may unintentionally:

    • Misinterpret construction contracts
    • Miss statutory deadlines
    • File incorrect applications
    • Provide incomplete or inaccurate advice

    These errors can significantly weaken an owners corporation’s position.

How Grace Lawyers can help

Grace Lawyers has a dedicated team of Building and Construction specialist lawyers who act exclusively for owners corporations. Daniel Radman, Managing Partner at Grace Lawyers, leads the firm’s building and construction practice. Daniel and his team have acted for Owners Corporations in numerous leading building cases including the only two strata defect matters decided in the High Court of Australia:

Summary

Construction and strata disputes are complex, technical and governed by strict legislative requirements. Engaging a specialist building and construction lawyer ensures that lot owners receive accurate, strategic, and efficient advice tailored to the unique challenges of building defects, contract disputes, and common property issues.

From contract review and risk management to dispute resolution and NCAT representation, a specialist lawyer provides the expertise necessary to protect your rights and achieve a cost‑effective, timely resolution. Given the financial and legal risks involved, choosing a specialist is not only prudent—it is essential.

 

Written by Daniel Radman, Managing Partner, Grace Lawyers

 

If you require guidance on a strata, building defects, or construction dispute, our specialist lawyers are ready to assist. Contact us now on 1300 144 436 for precise, informed advice that safeguards your project and your position.

A Landmark Shift – Bodies Corporate May Sue for Public Nuisance

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QLD

On 23 March 2026, a significant development occurred in Queensland with the adjudication of Palmhurst [2026] QBCCMCmr 88. For the first time, an adjudicator recognised that sustained antisocial behaviour within a community titles scheme could amount to public nuisance, thereby enabling a body corporate to take action on behalf of multiple affected residents. This decision marks an important evolution in the interpretation and application of section 167(1)(a) of the Body Corporate and Community Management Act 1997 (Qld) (BCCM Act), expanding its reach beyond traditional private nuisance disputes.

A Pattern of Serious Misconduct and Community Disruption

The dispute arose within a residential scheme known as Palmhurst, comprising 18 units. The respondent, the owner and occupier of Lot 7, had been the subject of numerous complaints by fellow residents over several years. The body corporate alleged that the respondent, together with his invitees, engaged in persistent and serious antisocial conduct that substantially interfered with the use and enjoyment of other lots and common property.

The evidence presented painted a deeply troubling picture. Residents reported excessive noise at all hours, including yelling, screaming, violent behaviour, and the throwing of objects. The disturbances were not isolated incidents but part of a sustained pattern of behaviour, often occurring late at night and disrupting the sleep and wellbeing of neighbouring occupiers.

In addition to noise, the conduct included allegations of illegal activity, such as the storage of stolen goods, drug sale and use, and the operation of a bicycle “chop shop” within areas allocated for exclusive use. There were also reports of verbal abuse, threats, and intimidating behaviour directed at other residents. Common property was frequently left in a hazardous and unsanitary condition, with rubbish, broken items, and even used syringes scattered throughout shared spaces.

The severity of the situation was underscored by the involvement of law enforcement. Police were reportedly called to the property approximately 50 times over a two-year period, with some incidents resulting in arrests. Despite this, the behaviour persisted, and efforts by the body corporate and individual residents to resolve the issues informally proved unsuccessful.

Current Nuisance Framework

Section 167(1) of the BCCM Act prohibits an occupier from using their lot or common property in a way that causes a nuisance or hazard, or that unreasonably interferes with the use and enjoyment of another lot or common property. Historically, this provision has been interpreted in line with the common law concept of private nuisance, which involves interference with the rights of an individual landowner or occupier.

Under this traditional approach, enforcement often depended on affected individuals bringing their own complaints. While bodies corporate have obligations to enforce by-laws, their standing to pursue nuisance claims on behalf of multiple residents has been less clear, particularly where the interference primarily affects individual lots rather than common property.

The Emergence of Public Nuisance

The adjudicator in Palmhurst adopted an approach by characterising the respondent’s conduct as a public nuisance. At common law, public nuisance refers to conduct that affects a class of persons or the public at large, rather than a single individual. It typically arises where the harm is so widespread or indiscriminate that it would be unreasonable to expect one person to take action to address it.

This concept had only recently been considered in the community titles context in Il Palazzo [2026] QBCCMCmr 82, although it was not established on the facts of that case. In Palmhurst, however, the adjudicator found that the scale and persistence of the respondent’s behaviour brought it squarely within the scope of public nuisance.

The conduct affected numerous residents simultaneously and created what the adjudicator described as a “common harm”. The interference extended beyond individual disputes and had a pervasive impact on the entire scheme, including both private lots and common property. On this basis, the body corporate was found to have standing to bring the application as a party directly concerned with the dispute.

How Did “Public Nuisance” Apply?

Having established that public nuisance could fall within the ambit of section 167(1)(a) of the BCCM Act, the adjudicator proceeded to assess whether the respondent’s conduct met the relevant threshold. Drawing on common law principles, the adjudicator emphasised that nuisance requires a substantial interference with the ordinary use and enjoyment of land, assessed objectively.

The evidence demonstrated that the interference in this case was both substantial and ongoing. Residents experienced chronic sleep disruption, fear for their safety, and significant impacts on their mental and physical wellbeing. Some reported anxiety, reliance on medication, and reduced work performance due to lack of sleep. Others avoided using common property altogether.

Importantly, the adjudicator found that the respondent’s use of the lot was neither “ordinary” nor “reasonable” within the context of a residential community. The alleged illegal activities, combined with the frequency and severity of disturbances, placed the conduct well outside what could be considered acceptable in such a setting.

The adjudicator, therefore, concluded that the respondent had contravened section 167(1)(a), (b), and (c), as well as multiple by-laws relating to noise, nuisance, waste disposal, and the use of common property.

Orders Imposed to Address Ongoing Misconduct

In response to these findings, the adjudicator made a series of orders requiring the respondent to cease the offending conduct and comply with the scheme’s by-laws. The respondent was also directed to maintain the lot in a clean and tidy condition and to ensure that his behaviour, and that of his invitees, did not continue to interfere with other residents.

The Significance of the Decision

The decision in Palmhurst is a landmark for several reasons. Most notably, it confirms that the concept of public nuisance can be applied within the BCCM jurisdiction, thereby expanding the scope of section 167(1)(a). This represents a shift away from a purely individualised approach to nuisance and acknowledges the collective nature of harm that can arise in high-density residential settings.

By recognising public nuisance, the adjudicator has effectively empowered bodies corporate to take action in circumstances where multiple residents are affected by the same conduct. This reduces the burden on individual lot owners to initiate separate proceedings and provides a more efficient mechanism for addressing widespread issues.

The decision also reflects a broader understanding of the realities of community living. In densely populated schemes, the actions of one occupier can have far-reaching consequences for others. The ability to address such conduct through a collective framework is essential to maintaining the amenity and safety of these environments.

Implications for Future Disputes

Looking ahead, Palmhurst is likely to influence how nuisance claims are framed and pursued in disputes. Bodies corporate may be more inclined to characterise problematic behaviour as public nuisance, particularly where it affects multiple residents over an extended period.

At the same time, the decision raises important questions about the limits of this approach. Not every dispute involving multiple parties will meet the threshold for public nuisance, and adjudicators will need to carefully assess the scale and nature of the interference in each case.

Nevertheless, Palmhurst provides a valuable precedent for addressing serious and systemic issues within community title schemes. It demonstrates that the existing legislative framework is capable of adapting to complex and evolving forms of residential conflict.

Summary

The adjudication of Palmhurst [2026] QBCCMCmr 88 marks a turning point in the development of nuisance law within Queensland’s body corporate regime. By recognising the applicability of public nuisance, the decision expands the enforcement tools available to bodies corporate and offers a more effective means of addressing conduct that harms an entire residential community. Where behaviour crosses the line into widespread and unreasonable interference, the law is now better equipped to respond.

 

Written by Brendan Pitman, Partner, Grace Lawyers QLD

 

If you require guidance regarding persistent and serious antisocial conduct within your body corporate, contact our QLD partners on 1300 144 436 for practical advice.