Full Breakdown
Proposal to Ban Strata Manager Commissions in New South Wales
3/24/2026, 6:11:17 PM
Overview of the Proposal
The New South Wales (NSW) Productivity and Equality Commission has proposed a ban on commissions paid to strata managers, aiming to enhance affordability and transparency for apartment owners. This recommendation comes as the number of residents living in strata schemes is projected to rise, with apartments expected to constitute half of all Sydney homes by 2041. The proposal, led by Productivity Commissioner Peter Achterstraat, suggests transitioning to a fee-for-service model, which could potentially reduce costs for owners and improve competition within the industry.
Key Findings of the Report
The commission's report highlights significant concerns regarding the current commission-based model, which often leads to conflicts of interest. Strata managers, who are appointed by owners' corporations to oversee the management of apartment buildings, can receive commissions for securing contracts, including insurance and other services. This practice has been criticized for obscuring the true costs faced by owners and undermining trust between them and the managers. Achterstraat noted that abolishing commissions could lead to increased transparency, competition, and ultimately better value for money for owners.
Industry Response
The Strata Community Association, representing strata managers in NSW, has expressed support for moving away from commission-based remuneration. However, some industry members argue that commissions are necessary to compensate for the resource-intensive work involved in managing strata properties. The report acknowledges that while the removal of commissions may lead to higher direct fees for management services, these costs could be offset by lower premiums and overall expenses for owners.
Official Statements & Responses
NSW Minister for Better Regulation and Trading, Anoulack Chanthivong, welcomed the commission's findings and stated that the government would carefully consider the recommendations and their potential impacts on owners, strata managers, and the broader industry. Tim James, the NSW opposition spokesperson for fair trading, indicated that any proposed reforms would need to be thoroughly justified.
Criticism & Opposition
Despite the support for reform, there are concerns regarding the potential increase in fees that could accompany the shift to a fee-for-service model. Critics within the strata management industry argue that commissions are vital for compensating the work performed by managers. They caution that a ban could lead to unintended consequences, including higher costs for owners.
Verbatim Quotes
- “Abolishing commissions can do three things: it can increase transparency, it can increase competition and it can increase the value of money to owners and hopefully that'll be passed on to renters of strata apartments.” — Peter Achterstraat, NSW Productivity Commissioner
- “They think they're paying them a certain amount but the strata managers are getting other income from elsewhere — ultimately all of this money comes out of owners' pockets.” — David Glover, Owners Corporation Network Australia
What's Next
The NSW government is expected to deliberate on the commission's recommendations, including options for phasing out strata commissions over three years. This period would allow the industry to adapt to the proposed changes, with the potential for legislation to enforce the ban if deemed necessary.
