Sustainability Series: Part 7 – Do NSW owners corporations have to consider environmental sustainability?

In short, the answer is yes. Two small but noteworthy changes were inserted into the Strata Schemes Management Act 2015 and became effective on 1 July 2025.

The first is a change to Schedule 1, clause 6 which requires, as part of the agenda of each Annual General Meeting that there be a motion on the agenda for the owners corporation to consider environmental sustainability within the scheme including considering the annual common property energy and water consumption and its costs.

Making our strata and community schemes more sustainable has been a key consideration in legislative change and particular attention has been paid to ensuring schemes are aware of the costs of implementing sustainability infrastructure. This was seen in Part 5 of this Sustainability Series where I discussed the technical requirements to enable a sustainability infrastructure resolution to be passed, one if which was to address costs.

Like the other sustainability focussed motions this Sustainability Series has considered, the effect is broader than indicated at first glance.

The use of the words “including” means that it is not only the common property water and energy consumption that must be considered at each AGM. Environmental sustainability of the scheme must be considered generally.

Reinforcing this requirement is the second small, but weighty, change under s79 of the Management Act requiring that owners corporations must, when estimating the amount needed for its capital works fund, consider how much money will be required to install, replace or repair infrastructure, fixtures and fittings that are part of the common property for the purpose of the sustainable use of the scheme.

In practice, what does this mean? To start, at a minimum each owners corporation will have to have a motion to consider its common property water and energy usage and costs. This may be part of a more general motion to consider sustainability.  Then, the normal motion to consider the capital works fund plan, something that is often overlooked, will have to be seriously considered as capital works fund plans will need to consider sustainable use.

I foresee as part of this a rush to update capital works funds plans. In doing so, owners corporations should consider whether they want to include sustainability as a line item costs or if they want to completely overhaul their capital works funds plans to incorporate future sustainability infrastructure and sustainable use of the scheme. My view is that including a single line item in a capital works fund plan and capital works fund budget to account for an increase in costs to introduce sustainability infrastructure in general, while convenient, will not suffice. The more proactive owners corporations will be actively engaging with consultants to consider what sustainability infrastructure could possibly be installed in their scheme and obtain a report on what changes could be made to existing practices and infrastructure to aid sustainability to obtain a robust capital works fund plan.

It is clear that the focus on sustainability in our strata schemes is not going away. If anything, lot owners, occupants and our legislature are keen to try to use sustainability as a pathway to help reduce costs of living. The more proactive schemes will be looking at the changes to see what they can do to reduce costs, use the changes to amend their scheme’s infrastructure to green up their scheme and add value to it while taking advantage of any government grants to assist them do so. The future is green…

Please seek legal advice that is tailored to your situation because as always, the devil is in the details and this is general information only.

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