Strata laws that strengthen enforcement and increase transparency on remuneration and conflicts of interest have passed the NSW parliament, as the government continues to consider action on commissions paid to strata managing agents.

The bill, which cleared the upper house yesterday evening, closes regulatory gaps that mean strata managers do not have to inform owners’ corporations about suppliers that are related entities, and requires greater disclosure about potential conflicts of interest, the government says.

It bans strata managers from receiving a commission where the owners’ corporation itself arranges the insurance. It also increases penalties and strengthens NSW Fair Trading compliance and enforcement powers.

“These changes will help to restore the confidence of the 1.2 million people already living in strata schemes and change the perception that strata managing agents can take advantage of owners without consequences,” Better Regulation and Fair Trading Minister Anoulack Chanthivong said today.

Labor’s Mark Buttigieg told the upper house the bill is a first step in the state government’s response to problematic strata management business practices and further work is under way. He also acknowledged a call from the Greens for a ban on commissions. 

“The poor behaviour of agents that has been reported in the media is unacceptable,” he said.

“The minister has been clear: the banning of strata insurance commissions is absolutely on the table. I have tasked NSW Fair Trading with consulting strata owners and industry on how that reform would work in practice. It is appropriate that Fair Trading undertake that consultation process on such a significant change.”

The strata bill, introduced into parliament last month, followed an ABC report earlier this year that focused on issues in the state. The report also led to NSW Fair Trading asking independent expert McGrathNichol to conduct a review of management company Netstrata.

A more recent Four Corners program highlighted wider problems, spurring consumer group calls for a national inquiry, while strata lawyers have urged all states and territories to toughen oversight.

Mr Buttigieg says further reform considerations will take account of findings from the Netstrata investigation, while the government is continuing to look at recommendations from a previous broader statutory review of strata laws.

“The government is committed to consulting with stakeholders to ensure the changes we make achieve the outcomes we want and will not have unintended detrimental impacts,” he said.

The Strata Community Association said after the Four Corners program that it has advocated for significant professional and consumer-focused changes to the sector across Australia.

“We welcome the strengthening of measures and protections that further professionalise our sector and deliver better outcomes for consumers, and continue to work collaboratively with our members, governments and regulators,” it said.