This year, Four Corners has been investigating the strata industry, after revelations that one of its most high-profile firms has been charging millions of dollars in opaque, often hidden, insurance fees and taking an untold sum in kickbacks from contractors.
But Four Corners has learned that the business run by senior industry figure Tony Irvine, has been charging additional fees to administer the scheme.He took over the top job after his predecessor, Stephen Brell, was forced to stand down following a 7.30 interview in which he admitted his company, Netstrata, had failed to disclose a raft of kickbacks.
The building's strata manager at the time was Mason & Brophy, a subsidiary of one of the largest strata companies in the world — the Prudential Investment Corporation of Australia , which is owned by companies from Ireland and Japan. Ms Parkes calculated Strata Plan overcharged her building $3,802.65 for debt notices in nine months alone.
For example, it has disclosed that when insurance is placed through a company called Inglis Insurance Group, Bright & Duggan receives "up to 75 per cent … of the broker fee". "BSC Solar will pay the strata management company 3 cents per kWh for each building under their management that partners with BSC Solar."When new buildings are completed, the developer still often owns enough apartments to dominate the owners corporation. This gives the builder the power not only to appoint a strata manager, but also the ability to negotiate terms which are more favourable to it — rather than the owners soon to buy in.
During an ongoing fight over defects, the owners were forwarded an email that, in their eyes, showed the developer was still calling the shots. When Tideways sent the builder a letter seeking reimbursement of about $5,000 spent on urgent repairs, Platinum Constructions wrote back. The concerns of the Prahran owners about the relationship were heightened by the revelation that Tideways had set aside several thousands of dollars of owners' funds to pay for the removal of waste from a single commercial property on the ground floor of the building — which was owned by a company associated with the developer.
It's not uncommon for strata management contracts to contain termination clauses that require the calling of a full meeting of owners. Some go further, seeking to restrain the powers provided to owners corporations under the law. The letter also warned the committee members may be personally liable, which Ms Parkes believed was an attempt at intimidation.Jordan Reid is a Melbourne consultant who helps owners corporations escape from onerous strata management contracts. He said Strata Plan had repeatedly come across his desk.
The tribunal ordered it to repay the money and said it did not accept figures presented by Mr Chamaa. He had claimed the company was entitled to compensation for "17 hours or almost 2 days" to dispatch just 22 notices; the Tribunal found this evidence "was not credible". In the hunt for a greater slice of the billions of dollars pouring into strata management, these players are focused on what's described as "vertical integration".
Martha Cove's strata manager, Cambridge Management Services, had separately asked Johns Lyng for a quote to replace a set of stairs at the crash site.The late-night crash at Martha Cove.When Mr Vandermeer found an alternative solution at one-third the cost, he was astonished when Johns Lyng immediately slashed its price by 20 per cent.Johns Lyng told the ABC its prices are reviewed for competitiveness and "customer feedback".
Mr Vandermeer had to scour the internet and the fine print of his strata documents to piece together these connections.One was a secret interest held by Martha Cove's strata manager in CIB, the insurance broker it had been using. This interest was in an undisclosed agreement to kick back to Bright & Duggan an unknown percentage of the broker's earnings.
What really disturbed Mr Vandermeer about the loan proposal, however, was that within a few minutes of online searching, he was able to find a cheaper deal from a non-Steadfast lender."IQumulate is the second-largest premium funder in Australia," he said."Do you think it got to be the second-largest premium funder in Australia by being twice the price of everybody else? The answer to that question is they could not possibly be like that.