Phase 3 of the key reforms to strata and community land laws commenced in October. In conjunction with these changes, NSW Fair Trading has issued a Statement of Regulatory Intent – Disclosure Obligations for Strata Managing Agents.
The Statement of Regulatory Intent outlines the compliance and enforcement approach relating to disclosure obligations under sections 57 and 60 of the Strata Schemes Management Act 2015 (the Act).
You may access the complete statement here: Statement of Regulatory Intent – Disclosure Obligations for Strata Managing Agents.
Key Points from the Statement:
1. Background to Sections 57 and 60
The Statement provides context to the obligations imposed under sections 57 and 60, including the disclosure of commissions, training, and connected suppliers.
2. Enforcement Approach
NSW Fair Trading sets out its expectations on how strata managing agents should meet their disclosure responsibilities and when enforcement action may be taken.
3. Disclosure of Training
Fair Trading expects strata managing agents to disclose at the Annual General Meeting (AGM) all training completed that relates in any way to their work, including circumstances where:
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a third party pays for or provides free training to an agent, or
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the agent pays for training provided by a third party.
4. Training Providers as Connected Suppliers
Where an agent pays for training, NSW Fair Trading considers the training provider to be a connected supplier under section 7(e) of the Act. As a result, the disclosure obligations for connected suppliers—such as those in section 60—apply.
Amendments Commencing 3 February 2025
Recent amendments to the Act have increased disclosure obligations but did not alter the existing provisions. A new section, s 57(3A), clarifies that if a commission or training service is not consistent with the agency agreement, approval under sections 57(3)(b) and 57(3)(c) must be obtained by resolution at a general meeting.
Fair Trading has confirmed that:
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Section 57(3)(c) permits agents to accept training services if they align with the agency agreement or have been approved by the owners corporation.
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Section 57(3A) requires that owners corporation approval under sections 57(3)(b) or (c) must occur via a general meeting resolution.
When Training Must Be Disclosed
Training must be disclosed at the AGM when:
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a third party pays for or provides training to the agent, or
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the agent pays a third-party training provider.
Definition of a Connected Supplier
Under section 7(1)(e) of the Act, a person is considered connected to another if they are employed or engaged by the same corporation, or if the corporation engages both parties. Fair Trading interprets this to mean that when an agent pays a training provider, the provider becomes a connected supplier, triggering disclosure requirements under section 60.
Enforcement Position
NSW Fair Trading has indicated that it will not take enforcement action for failure to obtain owners corporation approval for training under section 57 where the training:
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is delivered by Government agencies (e.g., NSW Fair Trading) or professional/industry associations, or
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is paid for by the agent themselves.
The complete statement can be accessed here: Statement of Regulatory Intent -Disclosure Obligations for strata managing agents
