Australia’s strata industry under fire
Bombshell ABC investigation "The Strata Trap" uncovers corruption in Australia’s strata industry with more than 2000 unhappy apartment owners coming forward to share their own horror stories
The dirty secrets of a section of Australia’s strata management industry have been laid bare in a bombshell Four Corners investigation, exposing how exploitation and unethical practices extend to the top levels of the industry.
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This year, Four Corners launched a detailed investigation into the strata management sector, following explosive revelations about Netstrata in March. The public response was overwhelming—more than 2000 apartment owners came forward to share their own horror stories of overcharging, phantom fees, and shady practices. These reports suggest the issues are not isolated but rather endemic throughout the industry, implicating even the most senior figures.
At the centre of the original scandal was Netstrata, exposed for charging insurance fees as high as 110 percent of the policy’s base premium—far exceeding the typical 20 percent rate. Additionally, the firm received hidden commissions from contractors, failing to disclose this information to apartment owners. These revelations led to the resignation of Stephen Brell, former NSW president of the Strata Community Association (SCA), who admitted to accepting “referral fees” from contractors such as debt collectors.
Roland Franz, an experienced strata consultant from Body Corporate Headquarters and Strata Consulting Services (Qld), explained: “Under the BCCM Act, any commissions or relationships that could pose a conflict of interest must be disclosed. Failing to do so would not only breach the BCCM Act but also violate the code of conduct for Body Corporate Managers, undermining their fiduciary responsibility.”
He added, “I believe that non-disclosure or secret commissions could potentially be considered a criminal offence under the Trade Practices Act.“
Read: NSW Government announces Strata Management Industry reforms amid scandal HERE
This week’s Four Corners investigation, led by Linton Besser, Mayeta Clark and Echo Hui, delved deeper, revealing that these overcharging practices extend to the very top, with strata firms profiting even from statutory levies intended to protect apartment owners. The investigation continues to expose the darker side of an industry in dire need of reform.
For example, the NSW government’s 2022 introduction of the Strata Hub—a reform designed to centralise information for unit holders—was alleged to have been exploited by Tony Irvine, the new NSW president of the Strata Community Association. Four Corners learned that Irvine’s company charged additional fees to administer the scheme, which he joked about in a Zoom briefing, claiming it had funded a brand-new ute. These remarks, made alongside Stephen Brell, raised further concerns about integrity within the industry.
Other companies implicated in the investigation include PICA (Prudential Investment Corporation of Australia), which was found to have overcharged apartment owners for outdated workplace health and safety reports. Bright & Duggan, one of Australia’s largest strata management firms, was also embroiled in the scandal for engaging in questionable financial practices, including undisclosed kickbacks from contractors. Additionally, Strata Plan and Independent Unit Management (IUM) were revealed to have overbilled apartment owners for debt notices while accepting kickbacks from service providers without disclosing these arrangements to owners.
The investigation also shed light on how some strata managers maintain “cosy” relationships with developers. In one case in Prahran, Victoria, the firm Tideways was accused of favouring developer Platinum Constructions over the interests of apartment owners during a dispute over building defects.
UPDATE on Sept 12, we were contacted by a Tideways spokesperson who told us: “This is entirely false. The evidence showed we held the builder to account on behalf of the Owners Corporation and fought hard on their behalf. We never hesitate to confront issues affecting Owners Corporations.”
Additionally, the ABC investigation spotlighted Steadfast Group (SDF) involvement in joint ventures with strata managers, which allowed broker fees to be passed to managers without being declared. Shares in Steadfast dropped 6.1 percent before the company entered a trading halt, pending an official announcement.
Further intensifying the scandal, NSW Strata and Property Services Commissioner John Minns—tasked with investigating firms like Netstrata—faced scrutiny for failing to disclose over 500,000 shares in a major real estate and strata services company. Despite Mr Minns’ claims that he sold his interests in 2021, his family trust still held a $780,000 stake, raising concerns about potential conflicts of interest. Mr Minns has since stepped aside pending an investigation, though he denies the allegations.
“Integrity and transparency need to be the cornerstones of any professional industry” emphasised leading property lawyer Frank Higginson of Hynes Legal .
Responding to the Four Corners revelations, he noted: “As in any market, a few bad apples can tarnish the reputation of the whole sector, and Four Corners has exposed some of the sharp and unconscionable practices that have been taking place.”
Mr Higginson highlighted a key issue with the current state of strata law: “One of the challenges is that strata legislation is governed state by state, rather than at a national level. This means reforms depend heavily on the priorities of individual state governments and their political agendas.”
He added that while Queensland has not been directly implicated, the state government looked at insurance issues in strata in early 2021 and changed the way insurance commissions and the like had to be disclosed to move away from some of the fine print disclosure that was common practice.
“Even after that, one would think it is time for the strata management business model to evolve and hopefully it is done by the industry itself as opposed to being driven by some form of external intervention.”
Chris Irons, former Queensland Commissioner for Body Corporate and Community Management and current director of Strata Solve, described the Four Corners revelations as “disturbing,” though he says they confirm what many industry professionals have long suspected.
What concerned Mr Irons most was the pervasive sense of powerlessness among apartment owners, many who felt they had nowhere to turn for help. He emphasised, “This highlights the urgent need for strong government intervention. The era of self-regulation in the strata sector is over.”
Mr Irons advocated for the introduction of minimum standards across the industry, stronger consumer protections, and a more proactive enforcement approach. “We need ‘strata cops on the beat’ to ensure compliance,” he recommended.
He also stressed that these issues aren’t confined to New South Wales and Victoria but affect the entire country. “Eyes have been opened. It’s time to properly resource offices like the Commissioner’s Office in Queensland, which has been underfunded for years. This needs to change.”
A much-needed spotlight has been shone on unethical practices within the strata management industry, according to Trevor Rawnsley, CEO of the Australian Resident Accommodation Managers Association (ARAMA).
“The concerns are alarming,” Mr Rawnsley said. “First and foremost, ARAMA represents more unit owners than any other group, with around 4000 buildings across Australia under our members’ care. Many of our members are also unit owners, meaning they are directly impacted by rising insurance premiums and inflated strata levies driven by hidden commissions and kickbacks.”
Mr Rawnsley acknowledged that while it’s not illegal for insurance companies or strata management companies to make a profit, the hidden nature of these commissions is particularly frustrating for ARAMA members, who like all other unit owners, ultimately bear the cost through higher levies.
“Many suspected something was wrong but didn’t realise the full extent of these hidden dealings,” he said. “We are grateful to Four Corners for bringing these issues to light, and we hope this will spark meaningful reform across the industry.”
Highlighting the contrast between the Management & Letting Rights (MLR) business model and offsite management companies, Mr Rawnsley explained, “Our members provide essential operational services to bodies corporate through transparent, fixed-fee caretaking service contracts and are prohibited from accepting rebates or kickbacks when arranging work on behalf of the body corporate.”
ARAMA is a strong advocate for transparency in fee structures. Mr Rawnsley emphasised, “As Four Corners exposed, fees for no service are unacceptable, and this is something that deeply concerns us.” He also stressed that transparency is a key feature of MLR agreements, which regularly receive the support of unit owners.
Importantly, he acknowledged the many ethical body corporate managers who work in the best interests of unit owners. “These professionals work transparently and respectfully with committees, unit owners, and residential managers, embodying what we call the ‘Triangle of Management,’ which puts the client and the scheme first.”
Finally, Mr Rawnsley expressed sympathy for the ethical managers who may feel unfairly impacted by the fallout from the investigation’s revelations.
“At ARAMA, we remain committed to transparency, ethical practices, and prioritising the best interests of unit owners. We urge calm and respect as the industry addresses these issues and moves toward reforms that benefit everyone.”
In response to the public outcry, NSW Minister for Industry and Trade, Anoulack Chanthivong has ordered an urgent review into Minns’ role and pledged stricter reforms to ensure transparency and accountability within the strata industry. These reforms include increased penalties for non-disclosure of commissions, a ban on agents receiving insurance commissions when they do not assist in securing the best deals, and stronger conflict-of-interest disclosure requirements.
As regulatory bodies like the Australian Competition and Consumer Commission (ACCC) monitor the situation, there are growing calls for more comprehensive reforms to protect apartment owners from further exploitation and to restore trust in the strata management sector.
Developing story: AccomNews has reached out to SCA and other industry professionals in the sector for their insights and responses.
BREAKING. Sept 10, 4pm: Tip of the iceberg? ABC News reports swathe of Australia’s top consumer groups have penned a joint letter to the federal treasurer calling for an urgent inquiry into the strata management industry.
Sept 10, 6pm: Steadfast Group released a response to last night’s ABC-TV Four Corners program that alleged its brokers mislead strata insurance customers. “We refute the allegations made and are disappointed that important information has been selectively presented,” said an ASX announcement released by the giant brokerage.
UPDATE on Sept 13, a comment from Tideways spokesperson added.
Mandy has almost two decades of accommodation and tourism industry writing experience and is Editor of AccomNews & Resort News, Publisher of SchoolNews & Director of Multimedia Pty Ltd. She is a retired registered nurse with a 25-year NHS career that followed a few unforgettable years in hotel housekeeping.
Our strata company charge hefty fees. We didn’t receive a bill once and explained to them we had not received it. They didn’t believe us. It was rudely pointed out exorbitant late fees would be applied and would increase every week that the late fee amount was not paid. Was ready to sell up so we didn’t have to deal with these obnoxious rude people. I would hope there is an inquiry into the way these companies conduct themselves.
This matter needs to be kept in the media – not just another forgotten story. Australians are sick to the back teeth of being taken for a ride, especially in the current housing crises.
There is a need to refrain building managers to approve work by contractor alone and all invoices has to be sighted to avoid falsing invoice and work not done, outsource cleaning, handyman repair, painting which may be inflated and faking for 100% profit making, taking charge of their victims which is the owners