Why NSW Strata Disclosure Rules Matter at Renewal Time

For strata communities, the practical significance is clear. Insurance is often one of the largest annual expenses in a scheme budget, and premium pressure remains high in buildings exposed to storm, flood, defects, ageing infrastructure or claims history. When owners are asked to approve a substantial renewal cost, they need enough information to assess whether the recommendation is reasonable, whether alternatives were considered and whether any remuneration arrangements could influence the advice being presented.

This is an extension of an earlier development in NSW, where transparency reforms were framed as a way to reduce disputes and improve confidence in strata management. The next test is implementation. A disclosure document that technically exists but is poorly explained will not do much to help lot owners make informed decisions. Committees should be asking for clear, comparable information well before renewal deadlines, rather than trying to interpret fees, commissions and exclusions at the final meeting.

The issue also matters for claims. If owners do not understand the policy structure at renewal, disputes can emerge later about excesses, exclusions, uninsured maintenance issues or the difference between common property and lot owner responsibility. Good disclosure should therefore sit alongside good record keeping, current valuations, maintenance planning and clear communication with residents.

Before approving a renewal, strata committees should consider whether they have:

• received a clear explanation of commissions, fees and any other benefits connected with the placement;
• reviewed alternative terms where available, including differences in excesses, limits and exclusions;
• checked whether building defects, outstanding repairs or risk recommendations have been disclosed to insurers;
• confirmed that the sum insured remains realistic in light of construction cost escalation;
• documented the reasons for accepting the preferred renewal option.

The broader message is that transparency is not only about compliance with strata legislation. It is also a risk management tool. Buildings that can demonstrate orderly governance, accurate information and considered decision-making are better placed when dealing with insurers and professional advisers. For owners corporations facing another difficult renewal season, that discipline may be just as important as the final premium figure.