An independent report completed as part of a wider investigation into strata management agency Netstrata has found potential breaches of NSW laws.

Consultant McGrathNicol’s review of 60 strata plans managed by the company found failings including non-disclosure of commissions and not obtaining at least two quotes for expenses exceeding $30,000.

Potential conflicts of interest included relationships Nestrata employees had with suppliers that were not disclosed, while practices that may not be in consumers’ best interests included charging a premium to strata plans that did not use wholly owned insurance broker Strata Insurance Services.

“At the heart of this matter is that strata managers have a legal duty to act in the best interests of the people they work for – the owners’ corporation,” NSW Fair Trading commissioner Natasha Mann said today.

“The disturbing practices described in this report suggest that Netstrata does not appear to have always done this. 

“On multiple occasions, Netstrata’s own interests appear to have trumped the interests of the people it had a duty to act on behalf of.”

Ms Mann says the report will help Fair Trading in its investigation into Netstrata, which includes matters not considered by McGrathNicol relating to other misconduct allegations.

The investigation is led by Fair Trading’s new Strata and Property Taskforce.

The McGrathNicol review started before the NSW government introduced strata transparency and accountability reforms that took effect this month. It has not considered Netstrata’s actions under the new laws. 

Fair Trading engaged McGrathNicol after an ABC report last March highlighted excessive insurance fees paid by apartment owners, plus other issues.

Netstrata, which launched in 1996, is focused on NSW properties and has offices in Sydney and Wollongong.

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