In NSW, the prevalence of building defects and their complexity has skyrocketed, prompting increasing legislative attention and a spotlight on suboptimal building work.

A strata inspection report covers all the aspects of running and maintaining a block of properties, and all the common areas associated with it.

These include:

  • Current property ownership and voting rights.
  • Structural or building defects.
  • Planned or previous major works.

The purpose of the strata inspection report

The purpose of the report is to identify successful defect rectification processes and have them resolved successfully.

What is the strata inspection report?

The strata inspections review details such as:

  • Building exterior / interior.
  • Fire and asbestos rule compliance.
  • Waterproofing.
  • Building insurance.
  • Building reports

If the owners and the committee choose not to undertake the full scope of precision reporting due to cost, they must undertake precise reports for those systems most likely to be impacted by defects. The primary systems are:

  • Structural.
  • Mechanical / ventilation.
  • Fire protection.
  • Waterproofing.

Once the committee and the collective of owners understand what the core issues are, the committee can then approach the original owner to start the negotiation process – or serving the defects on the original owner, developer or builder.

Timeframe for defect resolution

Owners and committees have two years to diagnose and commence proceedings. There are circumstances where defects have longer statutory warranties – eg. six years for major defects. However, this is the exception rather than the rule.

2026 updates

The 2026 updates to NSW strata laws introduce major changes that directly impact what information is recorded, disclosed, and reviewed in strata records and Strata Inspection Reports.

The key reforms taking effect in 2026 include:

  • Initial maintenance schedules (IMS) – For new multi-storey developments registered from 1 April 2026, developers must provide an independently certified IMS by a quantity surveyor detailing individual asset maintenance requirements before the first AGM.
  • Per-Asset Capital Works Tracking – Broad category buckets in the 10-year capital works fund plan are replaced by mandatory per-asset maintenance tracking using standard forms (introduced 1 April 2026). Significant building infrastructure—such as waste chutes, compactors, and bin rooms—must now be individually documented with specific maintenance intervals and cost estimates.
  • Strict Financial & Network Disclosures – Strata documents must now include new standardised disclosures for items like exclusive supply or embedded networks (starting 1 April 2026), alongside financial hardship information statements and standard payment plan request forms for overdue levies.
  • Two-Lot Scheme Reporting Exemptions – From 1 October 2026, two-lot strata schemes (such as duplexes) are exempt from completing annual strata reporting on the Strata Hub, reducing the records kept for these specific properties.
  • Expanded Fair Trading Powers – NSW Fair Trading can inspect records and issue penalty notices without needing a formal complaint to trigger an investigation, meaning inspectors and strata searchers will look closely for missing asset-specific maintenance logs.

For more information, contact McCormacks to discuss your strata management needs.