Victoria’s Strata Commission Debate Moves Into a New Phase

The development follows an expert panel review of Victoria’s owners corporation laws, which recommended stronger restrictions on financial benefits linked to managers’ duties. The Victorian Government has accepted the need for tighter accountability and improved disclosure, but has stopped short of committing to an immediate prohibition on commissions, saying further analysis is needed to understand the potential market impacts.

For apartment owners and committees, the debate goes to the heart of trust in strata insurance. When an owners corporation manager receives a commission or other benefit connected to an insurance placement, lot owners may reasonably ask whether the selected policy reflects the best available cover, the best available price, or the strongest commercial incentive for the intermediary. Even where arrangements are disclosed, disclosure alone may not give committees enough practical power to assess value.

Consumer advocates argue that commission-based arrangements can blur the line between advice, administration and sales. Some strata professionals, however, warn that removing commissions without a clear replacement model could shift costs into direct management or service fees. That is the tension now facing policymakers: how to remove conflicts without reducing access to insurance support, especially for smaller schemes that rely heavily on their manager to coordinate renewals.

This is also where the issue extends beyond Victoria. New South Wales has already been moving on strata insurance commission reform, and national broker and strata bodies are watching closely. If Victoria ultimately adopts a stricter model, it may add pressure for more consistent rules across Australia, particularly as more owners question rising levies and the true cost of arranging cover.

For committees, the practical response should not wait for legislation. Renewal papers should clearly separate base management fees, broker fees, commissions, referral payments and any related-party benefits. Committees should also ask whether a fee-for-service option is available, how many insurers were approached, why a preferred policy was recommended, and whether alternatives were declined because of underwriting concerns or commercial arrangements.

Owners corporations should also consider whether they need independent support from a qualified broker or adviser when reviewing complex placements, particularly where the building has defects, high claims history, weather exposure or unusual facilities. Transparent advice can help committees compare strata insurance options on cover quality, exclusions, excesses and long-term affordability, rather than focusing only on the headline premium.

The message for strata communities is clear: commission reform may still be evolving, but owners do not have to remain passive. Better questions, cleaner disclosure and documented decision-making can reduce disputes and improve confidence before the next renewal arrives.