If you own an apartment in Sydney, you’re affected by strata law whether you think about it or not. And if you’re buying one, understanding the strata framework is just as important as understanding the property itself. The NSW government has been rolling out reforms to the strata management system over the past couple of years, and 2026 has brought some changes that are worth paying attention to.

I’ve been dealing with strata-related issues in my clients’ transactions for 25 years. Let me break down what’s actually changed and what it means in practice.

The Big Picture

NSW has more than 80,000 strata schemes covering around 1.2 million lots. That’s a massive proportion of the state’s housing stock. The NSW Fair Trading strata reform program has been updating the framework since the Strata Schemes Management Act 2015 replaced the old 1996 legislation, but the pace of change has accelerated recently.

The driving forces are familiar: ageing building stock, growing disputes between owners, problems with building defects (hello, Mascot Towers and Opal Tower), and increasing complexity as buildings get larger and more expensive to maintain.

Key Changes for 2026

Enhanced building inspection requirements. Strata schemes for buildings over three storeys must now conduct comprehensive building condition assessments every five years, up from the previous ten-year capital works fund assessment. The assessments must be done by qualified building inspectors, and the reports must be made available to all lot owners and prospective buyers.

This is a significant shift. For buyers, it means more information about building condition before purchase. For existing owners, it means potentially facing repair costs sooner than expected if the inspection reveals defects.

Stricter capital works fund requirements. The minimum capital works (sinking) fund contribution has been increased for buildings over 15 years old. Strata committees can no longer defer major maintenance indefinitely by keeping levies artificially low. If the ten-year capital works plan identifies necessary repairs, the scheme must fund them.

I’ve seen too many buildings where committees kept levies low for years, avoided maintenance, and then hit owners with a $50,000 special levy when the facade started failing. The new rules are designed to prevent that pattern.

Defect bond scheme updates. The building defect bond scheme, which requires developers to lodge a bond for residential apartment buildings, has been expanded and the bond period extended. Developers must now provide a two percent bond that’s held for an extended period, giving strata schemes more time and more funds to address defects after settlement.

Proxy voting limits. There are tighter restrictions on proxy voting at strata meetings. A single person can now hold proxies for a maximum of five percent of lots in schemes with more than 20 lots. This targets the practice of developers or large investors accumulating proxies to control strata meetings and block maintenance spending.

What This Means for Buyers

If you’re buying an apartment in Sydney right now, these changes create both opportunities and risks.

Opportunities: You’ll have access to more building condition data than ever before. Ask for the most recent building condition assessment. If the scheme doesn’t have one, that itself tells you something about how well the building is managed.

Risks: Better-maintained buildings with higher levies are actually the safer buy. I know it’s counterintuitive — nobody wants to pay $2,500 per quarter in strata levies — but a scheme that’s properly funded for maintenance is far less likely to hit you with a $30,000 special levy two years after you buy.

The worst-case scenario is buying into a scheme with low levies, an underfunded capital works plan, and a building that’s about to need major repairs. That special levy will dwarf any savings you got from lower quarterly fees.

How to Evaluate a Strata Scheme Before Buying

Here’s my practical checklist:

1. Get the strata inspection report. This is a legal document that summarises the scheme’s finances, any current disputes or litigation, upcoming works, and meeting minutes. Pay a strata searcher $300-$400 to get it and read it carefully.

2. Check the capital works fund balance. A healthy scheme has a capital works fund that’s growing over time. If the fund is declining or near zero, maintenance is being deferred.

3. Read the last two years of meeting minutes. They reveal more than any financial statement. Are owners arguing about repairs? Is the committee blocking spending? Are there noise complaints or bylaw disputes?

4. Look at levy history. Have levies been increasing at a rate that covers inflation and building ageing? A scheme that hasn’t raised levies in five years is almost certainly underfunding maintenance.

5. Ask about building defects. Especially for buildings completed after 2016. Has the NSW Building Commissioner been involved? Are there outstanding rectification orders?

6. Check insurance. Strata insurance premiums have risen sharply, particularly in flood-prone and coastal areas. Ask what the current premium is and what it covers.

For Existing Owners

If you’re already an apartment owner, the enhanced inspection requirements might result in higher levies in the short term. Don’t fight it. Properly maintaining a building protects your asset value far more than keeping levies low.

Get involved in your strata committee if you aren’t already. The decisions made by a small group of volunteer owners can have six-figure consequences for everyone in the building. Being at the table matters.

The Broader Trend

The direction of strata reform in NSW is clear: more transparency, more accountability, more mandatory maintenance. This is good for the long-term health of Sydney’s apartment stock, even if it creates short-term costs.

Sydney’s future is increasingly apartment-based. For that to work, the legal and management framework for shared ownership needs to be robust. These reforms aren’t perfect, but they’re moving in the right direction. And for anyone buying or selling strata property, understanding them isn’t optional — it’s essential.