Strata management firm Netstrata has been using its wholly owned insurance arm to charge apartment owners excessive brokerage fees, the ABC has reported. 

The report says Netstrata company Strata Insurance Services has been charging above industry norms and in one case owners at a building near Botany Bay had been “charged brokerage at about 64% of the base premium”.  

The fee was refunded after the couple, who later obtained a cheaper quote from an independent broker, raised their intention to lodge a formal complaint, the ABC says. 

Netstrata MD Stephen Brell, also Strata Community Association NSW President, told the ABC that he didn’t know the details of that case but “it’s certainly not something that is standard practice”. 

"We charge a fee for service and those fees for services are consistent with what the market rates are," Mr Brell told ABC Investigations. 

He said in response to issues identified by the ABC that he would “go back and look at our practices and make sure we tidy them up”. 

Netstrata has not yet responded to an insuranceNEWS.com.au request for comment this morning. 

The report comes as the Australian Consumers Insurance Lobby (ACIL) says it’s seeking input from individuals, businesses and industry insiders on their strata sector experiences as it seeks to document the breadth of issues in the sector and their impact. 

The group is encouraging individuals, businesses and other entities to complete an online survey that’s open until April 3. 

“We are particularly eager to hear from businesses that have suffered due to these practices and industry insiders including current and former employees of strata managers, insurance brokers and or other related businesses,” ACIL Chairman Tyrone Shandiman said.  

ACIL has particularly highlighted arrangements where owners have been shifted to excessive fee and commission arrangements without informed consent, and has called on the Australian Securities and Investments Commission and the Australian Competition and Consumer Commission to embark on a broader sector investigation. 

Consultant John Trowbridge’s three-phase review of the strata insurance practices, completed last year, called for increased transparency and disclosure on remuneration and commercial arrangements. 

The review noted various degrees of transparency around corporate structures, including where a strata management and broker group have shared ownership or other forms of corporate connection. 

“When there are no ownership or financial connections between SM groups and broker groups, the corporate arrangements are usually straightforward and there is no ambiguity,” Mr Trowbridge said in a consultation paper. 

“In other cases, there is ambiguity unless the parties specifically explain the names, roles and position within the financial chain. Some brokers and SMs are fastidious about such declarations, others are not.”