Strata management agency Netstrata says a regulatory review of its operations following media scrutiny begins today and will take five to six weeks.

The investigation by McGrathNicol on behalf of NSW Fair Trading follows an ABC report highlighting alleged excessive fees charged by Sydney-based Netstrata and associated entities, which led to wider criticism of practices within the industry.

“Following recent media allegations, Netstrata has agreed with NSW Fair Trading for McGrathNicol Advisory to conduct an independent review of its business operations,” the agency said in a statement.

“Netstrata will carefully consider the results of the independent review and will have more to say at that time. Netstrata wishes to work constructively with NSW Fair Trading to make positive improvements to its operations and by doing so support driving positive change within the industry.”

The ABC said the agency routinely used its wholly owned insurance arm to charge apartment owners insurance brokerage fees as high as three times the typical rate, and was taking kickbacks from contractors and suppliers.

Since 2015, Netstrata had reaped more than $21 million in brokerage fees, managing more than 1000 buildings and 35,000 apartments, the ABC said.

NSW Fair Trading says a detailed report will lay out the agency’s business structures, processes and systems, professional practices, fees and charges, commissions and incentives, and third-party relationships.

“NSW Fair Trading is committed to ensuring a trusted and accountable strata sector,” State Strata and Property Services Commissioner John Minns said, adding it is essential residents “have confidence in the professionals they engage to manage what is often their most valuable asset”.

Netstrata has previously said it stands by its practices but accepts “there is a consumer demand for greater transparency, which we will work towards” and it is “looking for better ways to disclose in a meaningful way” beyond regulatory requirements.

"We are more than willing to provide the necessary documentation to outline the financials of each scheme,” it said.

The agency’s MD Stephen Brell resigned as Strata Community Association NSW president following the ABC report.

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