A broker who allegedly billed their client a fee amounting to 50% of their strata premium has been reported to the Insurance Broking Code Compliance Committee.

The complaint was lodged by strata broking specialist Tyrone Shandiman after the client approached him about the matter.

The client was already paying 2.5 times a regular premium because of defects on the property.

“What made this situation even more alarming was that there was no change in the insurer from the previous year,” Mr Shandiman said in a LinkedIn post. “The previous broker (not me) charged a fee that was only 25% of the new broker’s fee.

“The broker was changed on advice of the strata manager who received a share of the remuneration.”

Mr Shandiman says brokers are meant to support, not exploit, vulnerable clients.

“The circumstance of defects, in my view, makes this a vulnerable client,” he said. “And I believe a 50% fee under these circumstances (defects and 2.5 times premium) is unjust.

“Insurance brokers are obliged to provide efficient, fair and honest services as mandated by their [financial services licence] obligations, and the code of conduct upholds ethical standards.”

Mr Shandiman, who is Strata Insurance Solutions MD, has pushed for improved strata practices in his capacity as Australian Consumers Insurance Lobby chairman.

The lobby held an online survey in March to gain more information about strata sector problems and identified “bad actors” including five brokers.

“It disappoints me to see the number of bad actors in this industry who bring the profession into disrepute,” he said in his LinkedIn post.

“I feel it’s time to start making more reports to the [code compliance committee]. The only way to improve this industry is by actively reporting unethical behaviour.”

As reported by insuranceNEWS.com.au yesterday, the NSW government is set to introduce strata laws aimed at improving commission disclosure and weeding out “bad behaviour” in the sector.

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