The organisers of a strata roundtable are expected to release their report today. According to a media release shared with IB, the Strata Futures Report has 64 recommendations based on interviews with industry stakeholders, including strata management firms and banks. The authors are calling for a task force co-funded by the government to lead a national strata industry reform effort.
“A national Strata Futures task force is proposed to lead transformation and foster a high-performing, transparent and sustainable model of property ownership and governance at a national level,” said John Minns (pictured, right), the former NSW Strata and Property Services commissioner, in the release.
Minns co-authored the report together with consultant Kate McHugh. She said their study is being sold to sector stakeholders for $2,000 “to cover the additional costs of the engagement and report writing.”
“A viable, profitable, reputable and sustainable strata sector is in the Australian public interest,” said McHugh (pictured, left).
She said establishing a sector-led and funded research and development body “is the way forward.”
IB asked if the recommendations support a proposed ban on the commissions paid to strata managers from the placement of insurance? The ban, regarded by many as a key sticking point, is supported by some stakeholders, including consumer advocates, owners’ corporations and brokers.
“This was not discussed directly in the engagement and roundtable,” said McHugh. “The roundtable excluded competitive practices and remunerations models and acknowledged the issue of insurance (brokerage) commissions being dealt with by the NSW government elsewhere.”
McHugh said the sector has an opportunity to take ownership of its future.
“It is essential the sector takes accountability and invests in its future,” she said. “Metrics and performance uplift backed by research can deliver commercial and social returns.”
Meanwhile, some firms in the strata industry continue to conduct business in ways that are lawful but considered unethical by some stakeholders.
A source reached out to Insurance Business this week and said that for missing one bill, every two weeks since 2021, Netstrata has sent them a cumulative late fee fine of $44 for unpaid levies, with interest added.
“I’m still receiving them,” they said in an email. “I got another just within the past two weeks. At this point, I’ve accumulated dozens.”
The source said even when they applied for a new payment plan, Netstrata still sent the fines.
“I paid the actual levy, but not the $44 fee,” said the source. “However, they applied my payment to the $44 reminder first, which made it appear as if my levy was unpaid.”
The source took their case to the NSW Civil and Administrative Tribunal (NCAT). In documents seen by IB, the Tribunal Member who conducted the hearing expressed “some sympathy” with the source but said the fees were lawful and dismissed the case.
New laws for strata schemes that impact brokers started rolling out across NSW in March. A focus of the reforms is improving the accountability and transparency of strata managers, including their relationship with insurance brokers.
Many brokers support the changes. Some have told IB that this industry shake-up, a response to excessively high fees, conflicts of interest and unethical conduct, was a long time coming.
Chiarella is CEO of Bellrock, a Sydney-headquartered firm offering risk advice and insurance brokering services.
Minns, the co-author of the Strata Futures Report, left his job as NSW strata commissioner last year following allegations of a conflict of interest that led to a Department of Customer Service investigation. The allegations came from an ABC Four Corner’s report that revealed Minn’s family trust owned more than $750,000 worth of shares in a property group.
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Story Update 4th June:
Shortly after publication of this article McHugh and Minns reached out to IB by email concerning the allegations in the ABC report, to request this addition:
"Following a detailed independent investigation, there were no adverse findings or misconduct identified,” said the email.
