The NSW government has launched an investigation into Netstrata, a strata management firm, following allegations of unfair practices aired on ABC’s 730 program.
These accusations include charging excessive insurance fees and receiving undisclosed kickbacks.
The controversy gained traction in March when Stephen Brell, Netstrata’s managing director and then-president of the state’s peak strata industry body, stepped aside. He admitted to the misconduct exposed by ABC, expressing a commitment to reevaluate and improve their practices.
According to ABC’s latest report, NSW Strata and Property Services Commissioner John Minns has announced an official review into Netstrata’s business operations.
“As more NSW residents choose strata living, it is essential they have confidence in the professionals they engage to manage what is often their most valuable asset,” he said, as reported by ABC. “NSW Fair Trading is committed to ensuring a trusted and accountable strata sector, and this comprehensive response to the issues raised demonstrates the commitment to achieving this.”
The investigation will be carried out by McGrathNicol Advisory, an independent third-party expert.
The review will scrutinise Netstrata’s business structures, operational processes, fee structures, and professional practices, as well as its commissions, incentives, and third-party relationships. Although a comprehensive report is expected, the government has not committed to making it publicly available.
The announcement of the government’s inquiry into Netstrata’s operations comes after several consumer and property advocacy groups called for an investigation in response to ABC’s 7:30 Report.
Specifically, the Australian Consumers Insurance Lobby (ACIL), Owners Corporation Network of Australia (OCN), and Unit Owners Association Queensland (UOAQ) urged the Australian Securities and Investments Commission (ASIC), the Australian Competition and Consumer Commission (ACCC), and New South Wales’ Strata & Property Services Commissioner to initiate a comprehensive investigation into NetStrata and its affiliates’ business operations to uphold transparency, equity, and legal adherence in the insurance and strata sectors.
