NSW Strata Reforms 2026: New Rules for Two-Lot Schemes
NSW Strata Reforms 2026: What Two-Lot Strata Scheme Owners Need to Know
A two-lot strata scheme is responsible for two lots, such as two units, duplexes or houses that are physically detached, and limit having common property.
If you co-own a duplex or another two-lot property in New South Wales, upcoming changes to strata law will directly affect how your scheme is run. The Strata Schemes Legislation Amendment (Miscellaneous) Bill 2025 is expected to commence later in 2026, introducing a new "small strata scheme" category that significantly cuts red tape for two-lot properties.
With more than 30% of NSW strata schemes made up of just two lots, this reform will change how thousands of owners across the state manage their properties — removing requirements that were never really designed with duplexes in mind.
Here's what's changing, why it matters, and what you need to do next.
Why NSW Strata Law Is Changing
Until now, a two-lot strata scheme has faced largely the same legal obligations as a 50-unit apartment tower: strata committees, annual general meetings, capital works plans, and ongoing reporting requirements.
For two owners who simply share a duplex, this has often meant:
- Paying for formal meetings and paperwork neither owner really wants
- Navigating governance rules built for large, complex buildings
- Spending time and money on compliance that adds little practical value
The NSW Government's reforms recognise that decisions in a two-lot scheme are naturally collaborative — it's usually just two owners agreeing on shared costs and maintenance. The new laws are designed to match the red tape to the reality.
Introducing the "Small Strata Scheme" Category
The reform's centrepiece is a new Section 7A of the Strata Schemes Management Act, which formally classifies all two-lot strata schemes as small strata schemes.
This creates a simplified governance framework, exempting small strata schemes from several requirements that previously applied automatically.
Small Strata Schemes No Longer Need To:
- Pass special resolutions
- Hold Annual General Meetings (previously required under Sections 14 and 18)
- Convene other general meetings under Section 19
- Establish or maintain a strata committee under Section 29
- Prepare a plan of anticipated major expenditure under Section 80
- Provide certain scheme information to the Secretary under Section 271(2)(o)
In short: no more mandatory meetings, minutes, or committees just to tick a legislative box.
Written Resolutions: The New Way to Make Decisions
Instead of formal meetings, most decisions in a small strata scheme can now be made through a written resolution signed by both owners.
Provided every owner agrees, a written resolution can now satisfy requirements relating to:
- Decisions that would ordinarily be made at a general meeting
- Decisions of the owners corporation
- Decisions of the strata committee
- Decisions normally made by office bearers
This reflects how many two-lot schemes already operate informally — owners agreeing in writing, without the cost and complexity of running a formal meeting.
Other Key Legislative Changes
Several related provisions have been amended to align with the new small strata scheme framework:
| Section | What's Changing |
|---|---|
| Section 5(2A) | Removes the small strata scheme exclusion when reducing an original owner's voting power once aggregate unit entitlements exceed the specified threshold |
| Section 30(3) | Repealed — small strata schemes no longer need to establish a strata committee |
| Section 74(5)(a) | Decisions not to establish a capital works fund are now governed by Section 7A |
| Section 160(4)(a) | Decisions not to arrange joint insurance are also governed by Section 7A |
What This Means for Owners
For owners of two-lot schemes, the practical impact is significant:
- Lower costs — fewer meetings and less paperwork mean reduced strata management fees
- Less admin — no mandatory AGMs, committees, or annual reporting
- More flexibility — decisions can be documented and finalised in writing, on your own timeline
- Simpler governance — a framework that actually reflects how a two-owner scheme operates
This is one of the most practical strata law updates in recent years for NSW duplex and small-lot owners — but getting the transition right still matters, particularly around existing by-laws, insurance arrangements, and capital works funding decisions made before the reforms commence.
Need Advice on How the Strata Reforms Affect Your Property?
Every scheme is different, and transitioning to the new small strata scheme framework may raise questions specific to your property — from existing by-laws to insurance and dispute resolution.
[Contact our strata law team] today for tailored advice on how the 2026 NSW strata reforms affect your rights and obligations as a two-lot scheme owner.
This article is general information only and does not constitute legal advice. Please contact us to discuss your specific circumstances.
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