14 December 2026
One of the most persistent sources of tension in strata isn’t service quality, personality, or even performance.
It’s money.
More specifically, how strata management businesses make money, how clearly that is disclosed, and whether owners corporations genuinely understand the financial relationships operating around their schemes.
This article is not written to suggest that strata managers should not be profitable. They should be.
Nor is it written to imply that every commission or referral arrangement is unethical. Many are lawful, disclosed, and entirely appropriate.
The issue arises when complexity replaces clarity, and when financial structures are treated as “industry knowledge” rather than governance information.
If transparency is to mean anything in practice, this is where the conversation has to go.
The Real Issue Isn’t Fees – It’s Understanding
Most owners corporations know what they pay in base management fees.
Far fewer understand:
– what sits outside that fee
– how additional revenue is generated
– where incentives may exist
– whether those incentives align with the interests of the scheme
That gap is rarely malicious. It is structural.
Strata management has evolved into a multi-revenue business model, but the way those models are explained has not always evolved at the same pace. The result is a disconnect between what committees believe they are paying for and how the business they have engaged actually operates.
That disconnect is where trust erodes.
The Common Revenue Streams in Strata Management
To have a productive conversation about transparency, it helps to be clear about the typical ways strata management businesses generate revenue.
(1) Base Management Fees
This is the most visible and generally well-understood component.
Base fees usually cover core administrative services such as:
a. financial management
b. meeting coordination
c. compliance administration
d. day-to-day correspondence
These fees are disclosed in management agreements and, on their own, rarely cause concern.
(2) Additional Service Fees
Most agreements also allow for additional charges for services outside the base scope, including:
a. major works coordination
b. insurance claims handling
c. tribunal or dispute matters
d. after-hours attendance
e. project or contract management
While these fees are often disclosed, the practical triggers for when they apply are not always well understood until they appear on an invoice.
Transparency here is not just about disclosure.
It is about expectation management.
(3) Commissions and Rebates
This is where scrutiny has increased significantly.
Commissions or rebates may arise from:
a. insurance arrangements
b. embedded or bundled services
c. preferred supplier relationships
d. volume-based commercial agreements
In many cases, these arrangements are lawful, provided they are properly disclosed and managed in accordance with the Strata Schemes Management Act 2015 and the Strata Schemes Management Regulation 2016.
The issue is not their existence alone.
The issue is whether committees understand:
– that they exist
– how they operate
– their financial impact on the scheme
– whether genuine alternatives were considered
When this understanding is absent, trust deteriorates quickly.
(4) Referral and Related-Party Arrangements
Some strata businesses have financial relationships with:
– maintenance providers
– contractors
– technology platforms
– related or affiliated entities
These arrangements are not automatically improper.
But when they are:
– poorly explained
– minimised as “industry standard”
– buried deep in schedules
– or not openly discussed
…they create misalignment between governance expectations and commercial reality.
Why Complexity Has Been Allowed to Persist
Strata is complex. That is a fact, and often a fair one.
But complexity should never be used as a substitute for comprehension.
When committees are told,
“that’s just how the industry works,”
without a clear explanation of why and how, transparency has failed in practice, even if disclosure technically exists.
Disclosure that is unread, misunderstood, or treated as a formality is not meaningful disclosure.
What the Law Actually Expects
The legislative framework in NSW does not prohibit profit.
It requires honesty, disclosure, and fiduciary responsibility.
The obligation is not merely to disclose arrangements in theory, but to act in the best interests of the owners corporation in practice.
That includes:
1. avoiding conflicts where possible
2. managing conflicts where they exist
3. ensuring decisions are defensible, not just compliant
4. being prepared to explain financial structures clearly and calmly
As regulatory scrutiny increases, the distinction between technical compliance and good governance will matter more.
What Transparency Looks Like in Practice
Transparency is not achieved by longer contracts or thicker disclosure schedules.
In practice, it looks like:
1. plain-language explanations of revenue streams
2. committees understanding where incentives exist
3. open conversations about alternatives
4. clear, direct answers to reasonable questions
5. no defensiveness when scrutiny is applied
When transparency is genuine, it does not need to be managed.
It holds up on its own.
Why This Conversation Is Unavoidable
As expectations rise across governance, finance, and professional services, strata will not be exempt.
Owners corporations are more informed than they were a decade ago. Committees are increasingly willing to ask questions. Regulators are less tolerant of ambiguity.
In that environment, business models built on silence or assumption become fragile.
Those built on clarity become resilient.
What This Means for Owners Corporations
Committees do not need to become experts in strata business models.
They do need to feel confident asking:
– “How does your business make money beyond the base fee?”
– “Are there any financial relationships we should understand?”
– “How are conflicts of interest managed in practice?”
– “Would you be comfortable explaining this at an AGM?”
These are governance questions, not accusations.
What This Means for Strata Businesses
For strata businesses operating transparently, this moment is an opportunity to differentiate.
For others, it is an opportunity to reassess whether existing commercial structures can withstand daylight.
Transparency does not undermine professionalism.
It reinforces it.
Final Thoughts
This is not a debate about whether strata managers should be paid well.
It is a conversation about whether those payments are understood, aligned, and defensible.
If transparency is to become the standard rather than the exception, it must extend beyond slogans and into business models.
That is where trust is either built or lost.
Call to Reflection
Do you know how your strata management business is paid beyond the base fee?
And if not, have you been encouraged to ask?
JM
Founder + Managing Director
Bettr Strata