Understanding Two Lot Strata Schemes in NSW

Two lot strata schemes are common throughout NSW, particularly where two townhouses, villas or detached dwellings share a strata plan.

Although smaller than traditional apartment buildings, these schemes still have responsibilities relating to insurance, maintenance, levies and administration.

However, some special rules apply.

Capital Works Fund

A two lot scheme may decide not to establish a capital works fund where the buildings are physically detached, there are no buildings or parts of buildings outside the lots, and both owners agree.

Even without a capital works fund, owners should consider how future shared expenses will be funded.

Building Insurance

Where all buildings are entirely within individual lots, both owners may agree not to insure the buildings jointly.

In these circumstances, each owner should arrange appropriate building insurance. Other insurance obligations, including public liability insurance, may still apply.

Management and Administration

Two lot schemes may be managed by the owners themselves or through a professional strata manager.

Self management can reduce costs, but owners remain responsible for complying with strata legislation, maintaining records and managing shared expenses.

Changes to Two Lot Strata Schemes

In October 2026, the Strata Schemes Legislation Amendment (Miscellaneous) Bill 2026 received assent. It is the latest stage of reforms arising from the 2021 statutory review of NSW strata legislation.

The reforms introduce a simplified management framework for two lot schemes, including reduced meeting and administrative requirements and the ability to make decisions through written resolutions approved by all owners.

The changes are being introduced in stages, with some provisions awaiting commencement.

Buying Into a Two Lot Strata Scheme?

Before purchasing, it is important to understand the scheme's financial position, insurance arrangements, maintenance responsibilities and any recorded disputes.

These matters can vary considerably between properties, particularly where the buildings are detached.

Coastal Strata provides strata inspection reports for property buyers throughout NSW, helping buyers better understand the property before purchasing.