Netstrata: More trouble in apartments as insurance commissions spark red flags

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The Netstrata insurance scandal rocked the strata management industry in NSW but that’s just the beginning as an independent inquiry starts to dig deeper.

an ABC TV expose in March alleged that the strata managing giant Netstrata has been benefitting from significant hidden income

Netstrata had been telling clients it didn’t take insurance commissions – which was true. But by using its insurance subsidiary, it was able to funnel funds into the parent company, allegedly in even greater amounts than if it had taken a straight commission. However, since the relationship between strata managers and owners is frequently a point of conflict – for reasons other than transparency, integrity or professionalism – owners have been questioning if their strata managers can truly be trusted to be acting in their best interests.

“To be a true professional, a strata or body corporate manager would not accept commissions, payments or benefits, particularly in circumstances where they are simply adding to the costs of their client.” SCA-NSW, which only achieved “profession” status in the past couple of years, told this column that it has commissioned a full investigation into the allegations made against Netstrata in accordance with requirements under the Professional Standards Scheme.

 

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