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Potential Risks Persist Amid NSW Strata Commission Reforms

Consumer Groups Highlight Concerns Over Related-Party Financial Benefits

Potential Risks Persist Amid NSW Strata Commission Reforms?w=400

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In a significant shift within New South Wales's strata industry, the Strata Community Association NSW has announced that strata managers will transition away from relying on insurance commissions.
This change, set to be phased in from next year, will see remuneration for insurance-related work shift to separate fee arrangements.
While this move aims to enhance transparency and align with consumer interests, some consumer groups have expressed concerns about potential risks that may persist.

The Australian Consumers Insurance Lobby (ACIL) has highlighted the possibility that strata managers could still receive financial benefits through related-party structures. Instances have been observed where strata managers own, or are closely associated with, insurance brokerage firms. Such arrangements could potentially circumvent the intended transparency of the new remuneration model.

ACIL emphasises the importance of vigilance to ensure that the savings from commission changes are genuinely passed on to lot owners. It is considered part of the strata manager's fiduciary duty to act in the best interests of the owners' corporation, which includes ensuring that any financial benefits derived from insurance arrangements are disclosed and appropriately managed.

To mitigate these risks, it is recommended that owners' corporations:

  • Conduct thorough due diligence when selecting strata managers and associated service providers.
  • Implement clear policies requiring full disclosure of any related-party relationships and financial benefits.
  • Engage independent audits to review financial arrangements and ensure compliance with the new remuneration structures.

By proactively addressing these concerns, owners' corporations can foster a more transparent and equitable strata management environment, ultimately benefiting all stakeholders involved.

Published:Monday, 22nd Dec 2025
Author: Paige Estritori

Please Note: We do not endorse any specific products or companies. Some content is sourced from third parties, including press releases, and may not be independently verified for accuracy or completeness.

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Knowledgebase
Insurance Policy:
Broadly, the entire written contract of insurance. More narrowly, the basic written or printed document, as distinguished from the forms and endorsements added thereto.
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