UPDATE: Strata managers in Victoria are allegedly pocketing hidden kickbacks of up to 20 percent from insurance companies, costing apartment owners thousands. This shocking revelation has ignited urgent calls for reform as the state government’s review of strata laws looms.
Authorities confirm that the practice, while legal, has created a “perverse” industry model where low management fees are subsidized by these undisclosed commissions. As insurance premiums often represent the largest expense for apartment budgets, the implications for the growing number of Victorians living in strata-managed properties are severe. Advocates argue these hidden commissions undermine the legal interests of owners and demand immediate action from the Allan government.
Dr. Nicole Johnston, a socio-legal researcher who authored a damning report, warns that this is not an isolated issue but rather a “fundamental structural problem” entrenched for over 30 years. “The financial stakes are highest for the 65 percent of Victorian owners grappling with building defects,” Johnston states, highlighting that skyrocketing premiums for these buildings lead to significant profits for managers.
In 2021, strata managers were required to disclose any commissions received, yet a survey from Australian Apartment Advocacy reveals that 59 percent of Victorian owners remain unaware of whether their managers receive such payments. Mark Richards, a Melbourne apartment owner, describes the lack of transparency: “It’s like pulling teeth,” he says, emphasizing the need for accountability.
While some groups within the strata community advocate for transparency and minor commission disclosures, others, like the Strata Owners Alliance, label these practices as “ethically indefensible.” Co-founder Adam Promnitz insists that all commissions should be banned outright, stating, “In 2026, strata managers taking any form of commission is completely inappropriate.”
As the Australian Securities and Investments Commission enforces new rules requiring explicit consent from owners’ committees for commissions, the industry faces mounting pressure to reform. Johnston argues that mere disclosure is insufficient and that it creates an ethical facade that often leads to biased decision-making.
The Strata Community Association is divided on the issue; while its NSW branch has committed to phasing out commissions by 2026, the Victorian arm continues to support the option for commissioned insurance, arguing it provides consumer choice. This stance has sparked debate over the potential increase in management fees if commissions are banned.
Amid all this, the upcoming legislative review of strata laws in Victoria is critical. Consumer Affairs Minister Nick Staikos states, “We are working to ensure that the one in four Victorians living in strata-managed properties are treated fairly.” However, the opposition is pushing back, with spokesman Tim McCurdy advocating for a comprehensive ban on strata insurance commissions.
As the pressure mounts, the future of strata management in Victoria hangs in the balance. Will the industry lead the charge for reform, or will it require government intervention to dismantle these longstanding practices? The call for change has never been clearer, and apartment owners across the state are demanding action NOW.
