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NSW Fair Trading launches strata agency probe 

Strata management agency Netstrata faces a NSW Fair Trading review following the recent media spotlight on its operations.

The investigation comes after an ABC report highlighted alleged excessive fees charged by Sydney-based Netstrata and associated entities, leading to wider criticism of practices 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. 

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

NSW Fair Trading, which says it reserves the right to take further regulatory action, will work with independent expert McGrathNicol on the review. 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.    

State Strata and Property Services Commissioner John Minns says more NSW residents are choosing strata living and it is “essential they have confidence in the professionals they engage to manage what is often their most valuable asset. 

“NSW Fair Trading is committed to ensuring a trusted and accountable strata sector and this comprehensive response to the issues raised demonstrates the commitment to achieving this.” 

In a statement, Netstrata says it stands by its practices but accepts “there is a consumer demand for greater transparency, which we will work towards”.

It says it strives to “achieve the highest standard of transparent and professional strata management services” and is undertaking an internal audit and “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.

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