Short answer
A two-lot scheme — typically a duplex — is the smallest kind of strata scheme, and the Strata Schemes Management Act 2015 gives it some simplified handling. Most notably, where certain conditions are met and both owners agree, a two-lot scheme can be exempt from having a capital works fund. The core principles of strata still apply; the formalities are lighter.
Why two-lot schemes are treated differently
With only two owners there’s no committee of the usual kind and no third party to break a deadlock, so some of the machinery designed for larger schemes doesn’t fit. The Act recognises this by relaxing certain requirements, on the basis that two owners who both agree can run their shared property with less procedure than a 20-lot block needs.
The capital works fund exemption
The best-known relief is on the capital works fund (the long-term fund for major repairs). A two-lot scheme can decide not to maintain a capital works fund, but only where specific conditions are met — broadly, that the buildings on the two lots are physically detached from one another, there are no other shared buildings or structures on the common property, and the owners pass a unanimous resolution to do so.
Two things to keep clear: the exemption is for the capital works fund only — the scheme must still have an administrative fund for day-to-day running costs — and it isn’t automatic; it depends on the conditions and the unanimous decision being in place.
Flag: the precise conditions and the resolution requirement for the capital works fund exemption are set in the SSMA (the two-lot provisions, s 74(5)), and other formalities a two-lot scheme can relax are likewise defined there. Confirm the exact conditions against the current Act for your situation rather than assuming a blanket exemption.
The basics still apply
Being small doesn’t switch off strata law. The owners still jointly own and must maintain common property, still need to keep proper records and insurance, and still make decisions as an owners corporation — just with lighter, more informal process. “Simplified” is not the same as “unregulated”.
Keeping even a small scheme straight
Two-lot schemes fail quietly: with no manager and only two people, insurance renewals, decisions and records can drift until something goes wrong. Straita keeps even a two-lot scheme’s obligations and key dates tracked and surfaced in time, so the pair can stay compliant and keep clean records without standing up the full apparatus of a large scheme.
Primary sources
- Strata Schemes Management Act 2015 (NSW) — two-lot scheme provisions and the capital works fund exemption (s 74(5)).
- NSW Government — Strata schemes (Fair Trading) — small and two-lot strata schemes.