The strata management industry in the state is set to undergo sweeping reforms aimed at eliminating what the government describes as 'bad behaviour.' This decision follows an ABC investigation that uncovered conflicts of interest within one of the country’s high-profile strata firms. Linton Besser from ABC Investigations provides a detailed report on the issues that prompted these reforms and the potential impacts they may have on the industry.
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00:00In March, 7.30 revealed Netstrata had taken hundreds of thousands of dollars in kickbacks
00:07from contractors hired with owners' money.
00:10It was also charging undisclosed brokerage fees for insurance at three times the market
00:16rate.
00:17I know today you've disclosed a few things here which again has made me feel really awkward.
00:21Last month, NSW Fair Trading launched an inquiry into Netstrata.
00:26I think it's time that there's meaningful change in our industry to rebuild trust and
00:31integrity.
00:32That inquiry is ongoing, but today the NSW Government announced it would reform the Strata
00:37industry.
00:38The ABC's investigation into Netstrata raised a number of concerns with me and that's why
00:44we want to move quickly on the areas that we can do to bring that trust and confidence
00:48back into the sector.
00:49The reforms include strengthening conflict of interest disclosures, banning agents from
00:54receiving some insurance commissions and larger financial penalties for malpractice.
01:00Today's announcement recognises that much of the industry's poor conduct has been perfectly
01:05legal until now.
01:06I've been in this industry for 26 years and these types of practices have been rife throughout
01:11the industry for all that time.
01:13In the past three months, the ABC has received thousands of complaints from unit owners describing
01:19an industry riddled with conflicts of interest and secret kickbacks.
01:24That's the scale of the task the NSW Government has ahead of it.
01:28The Government will now commence consultation with the industry and intends to introduce
01:32new legislation in August.