The Strata Schemes Legislation Amendment Bill 2025 has introduced a change to s 106 of the Strata Schemes Management Act 2015 (NSW) that will significantly impact both owners corporations and lot owners – an extension of the time limit to bring claims for a failure to properly maintain and repair common property.
The law before 1 July 2025
Prior to 1 July 2025, if an owners corporation failed to comply with its statutory duty under s 106 of the Strata Schemes Management Act 2015 (NSW) (SSMA) to properly maintain and repair common property, a lot owner could bring an action for damages – but only within two years of becoming aware of the loss.
What’s Changing?
From 1 July 2025, lot owners will have six years from the date they first became aware of the loss to commence proceedings for breach of s 106 of the SSMA.
Why this matters?
The change is important because many common property defects, such as water ingress, develop slowly and may only be discovered long after they first start causing damage.
To put this in context:
- In 2024, a lot owner notices damp patches on their bedroom wall, which backs onto an external boundary wall;
- They suspect it is from a roof leak, but the source is not confirmed until an expert report is obtained in 2026;
- Under the old s 106, if they had noticed the first signs in 2024, they would need to commence proceedings by 2026; and
- Under the new s 106, they would have until 2030 to commence proceedings.
Implications for Owners Corporations
- Greater exposure to claims: Owners corporations must be proactive in investigating and repairing defects, as lot owners now have a much longer window to commence proceedings;
- Record keeping is critical: Committee minutes, maintenance logs, and correspondence will need to be preserved for longer periods to defend potential claims; and
- Insurance considerations: Strata schemes should review whether their insurance arrangements cover extended liability periods.
Implications for Lot Owners
- More breathing space: Lot owners now have more time to gather evidence, obtain quotes, and seek legal advice before commencing proceedings; and
- Don’t delay unnecessarily: While the limitation period is now six years, acting promptly still increases the chances of a cost-effective resolution and prevents further damage.
Takeaways
This latest reform shifts the balance towards lot owners, giving them a more realistic opportunity to pursue their rights when an owners corporation fails to maintain or repair common property.
But it also raises the stakes for committees and owners corporations – ignoring maintenance issues in common property will now carry a longer and potentially more costly tail of liability.
If you are a lot owner with concerns about common property defects, or an owners corporation unsure about its obligations, get legal advice early – the new six year limitation period gives you more time, but it does not make disputes any less complex.
At Project Lawyers, we have acted (and continue to act) for owners corporations and lot owners in relation to disputes and proceedings concerning s 106 of the SSMA.
If you have any questions, please feel free to contact Maysaa Parrino or Matt Armota via email (maysaa@projectlawyers.com.au / matt@projectlawyers.com.au) or via telephone on (02) 9025 0808.
The contents of this publication are for reference purposes only. This publication does not constitute legal advice and should not be relied upon as legal advice. Specific legal advice should always be sought separately before taking any action based on this publication.
Liability limited by a scheme approved under Professional Standards Legislation.
Author: Maysaa Parrino & Matt Armota
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