Who this guide is for: This guide is for NSW strata owners, owners corporation committee members and people involved in strata management who want to identify potential financial, maintenance and governance risks. 

A strata scheme can look well managed on the surface while carrying significant financial, maintenance or governance risks underneath. 

For NSW owners and strata committees, understanding the warning signs is particularly important following significant strata law reforms that commenced in 2025 and 2026. These reforms include changes around capital works planning, developer accountability, records, repairs and maintenance and strata management.  

Key Facts 

• NSW strata schemes must have a 10-year capital works fund plan.  

• New and revised plans must use the required standard form.  

• The plan must be reviewed at least every five years.  

• Strata schemes have extensive record-keeping obligations.  

• Deferred maintenance and repeated special levies can indicate that a scheme’s planning needs review.  

• NSW strata law has changed significantly, including reforms commencing 1 April 2026.  

What are the biggest red flags in NSW strata? 

1. The 10-year capital works plan is missing, outdated or ignored 

This is one of the clearest NSW-specific warning signs. 

The owners corporation must have a 10-year capital works fund plan covering expected major works. The plan must be reviewed at least every five years, and new or revised plans must use the standard form.  

The plan is not simply a document to file away. 

It should inform the scheme’s financial planning and help owners understand future expenditure. 

 
Many of the warning signs found in NSW are common across strata communities, from deferred maintenance to poor financial planning. For the broader picture, read our complete guide to red flags in strata —Red Flags in Strata 15 Warning Signs Every Owner and Committee Should Know 

2. Special levies keep appearing 

Special levies can be appropriate for unexpected expenditure. 

But repeated special levies can raise questions about whether the scheme is adequately forecasting future costs. 

Owners should compare special levies against previous meeting minutes and the capital works plan. 

Was the work genuinely unexpected? 

Or had it been discussed previously? 

3. Repairs are repeatedly postponed 

NSW owners corporations have responsibilities around common-property repairs and maintenance. NSW Government guidance also recommends keeping repairs and maintenance on meeting agendas and regularly reviewing the capital works plan.  

A recurring issue should therefore prompt a question: 

What is stopping this from being resolved? 

4. Meeting minutes don’t tell the story 

Minutes should help owners understand what has been discussed and decided. 

If important building issues appear to be discussed informally but aren’t reflected in formal records, owners may have difficulty understanding the history of a problem. 

NSW strata schemes are required to retain extensive records, including meeting documents, communications and financial information.  

5. The scheme doesn’t know what its major future expenses are 

The purpose of a capital works fund is to build sufficient reserves for future major works. NSW Government guidance states that the 10-year plan should consider the scheme’s circumstances, including the age of the building.  

If the answer to “What major works are coming?” is simply “We don’t know”, that is worth investigating. 

6. The committee makes decisions without adequate information 

Committees should have enough information to make informed decisions. 

For major repairs, that may mean reports, quotes, engineering advice or other specialist information. 

The cheapest quote is not necessarily the cheapest solution if it only addresses the symptom. 

7. Insurance is being used as a substitute for maintenance 

Insurance may respond to insured events, but it does not eliminate the need for appropriate maintenance. 

When a building issue occurs, understanding whether it is a maintenance matter, an insurance matter or potentially both is important. Read our guide to maintenance versus insurance in strata to better understand the distinction – Maintenance vs Insurance in Strata: What Committees Need to Know 

8. Important records are difficult to locate 

Records should allow an owner to understand the scheme’s history. 

If reports, contracts, meeting records, financial information or maintenance information cannot be easily located, that can make effective management much harder. 

NSW requirements specifically cover records of communications, meetings, financial statements and capital works plans.  

9. Maintenance and capital works are not regular agenda items 

NSW Government guidance specifically recommends making repairs and maintenance a regular meeting agenda item.  

If maintenance only gets discussed after something breaks, the scheme may be operating reactively. 

10. Nobody has reviewed whether the building’s plans still reflect reality 

A plan created several years ago may no longer reflect current construction costs, building condition or priorities. 

The 10-year capital works plan should be reviewed at least every five years, with annual consideration supporting better budgeting and levy planning.  

What should NSW owners do if they spot a red flag? 

Start with the records. 

Review: 

• the 10-year capital works plan  

• recent AGM minutes  

• financial statements  

• maintenance records  

• reports  

• previous special levies  

• upcoming projects.  

Then identify whether the issue is isolated or recurring. 

NSW red flags: Frequently Asked Questions 

Is a special levy a red flag in NSW? 

Not automatically. Special levies can be used for unexpected or additional expenditure. Repeated special levies may indicate that long-term financial planning needs closer attention. 

How often should a NSW capital works plan be reviewed? 

The 10-year capital works fund plan must be reviewed at least every five years.  

What should I look for in a NSW strata building’s records? 

Look at meeting minutes, financial statements, the capital works plan, maintenance information, communications and reports. NSW strata schemes have specific record-keeping obligations.  

Has NSW strata legislation changed recently? 

Yes. Significant reforms commenced in 2025 and 2026, including new requirements and standard forms relating to capital works planning and initial maintenance schedules.