What is Changing from 27 October 2025?
1. Levy notices must now include a Financial Hardship Information Statement
— Every lot owner getting a levy notice will receive additional information about their rights when facing hardship.
2. Payment plans for overdue contributions
— An owners corporation must offer a payment plan when requested by a lot owner.
— Payment plans can be up to 12 months; multiple plans may be agreed to over time.
— The owners corporation cannot refuse entering into any payment plan by resolution — any refusal must be “reasonable” under the new Regulations.
— The lot owner must submit a prescribed form when requesting a plan; the owners corporation (or committee) has 28 days to respond in writing, and if they refuse they must provide reasons.
— No extra fees or charges can be imposed simply for entering or making the plan.
3. Debt-recovery action
— An owners corporation can only take recovery action (for interest, costs and unpaid levies) after offering the lot owner the option of a payment plan, and subject to a Tribunal or Court order if required.
— If the owner is complying with an agreed payment plan, the owners corporation may not pursue those debts further.
4. How payments by lot owners are applied
— If a lot owner specifies how to apply a payment, it must be applied that way. Otherwise payments go to:
1. oldest levies first, then
2. interest, then
3. costs.
5. Notice before recovery proceedings
— The required notice period to a lot owner before commencing proceedings is increased: at least 30 days’ notice (up from 21).
Why These Reforms Matter for Both Committees and Owners
The latest changes to NSW strata legislation have reshaped how owners corporations manage levy arrears and financial hardship. There’s now a stronger emphasis on fairness and transparency, with clear expectations around how overdue payments must be handled. Committees are required to ensure that levy notices include a Financial Hardship Information Statement and that approved forms are used for any payment-plan requests.
For owners, these reforms provide greater clarity and protection. Anyone experiencing genuine financial difficulty now has a formal right to request a payment plan and receive a written response within 28 days. Committees that take recovery action without first offering a plan, or that refuse one without good reason, risk their decisions being challenged through the Tribunal.
Owners corporations must ensure they adjust their financial management practices. Payment-plan arrangements must be tracked to prevent unnecessary recovery action, payments must be applied in the correct order, and internal policies updated to reflect the new obligations. Overall, the reforms bring a more consistent and compassionate approach to managing levy debt across NSW strata schemes.
Ensuring Compliance with the New Reforms
With the new laws now in force, committees should already be operating under updated procedures. Levy notices must include the Financial Hardship Information Statement, and every scheme should have a clear process in place for receiving, assessing and responding to payment-plan requests. Template approval and refusal letters help ensure decisions are made promptly and documented properly.
Any administrative fees previously charged simply for entering a payment plan should have been removed, as the legislation now prohibits these. Recovery processes also need to reflect the new requirements — a payment plan must be offered before any debt collection steps are taken, and at least 30 days’ written notice must be provided before proceedings begin.
For lot owners, these reforms offer a fairer and more structured way to manage arrears. If you’re finding it difficult to meet levy payments, you can now submit the prescribed payment-plan form to your committee or strata manager. As long as you comply with the agreed plan, your owners corporation cannot pursue further recovery action during that period.
