26 May 2026
The question that keeps coming up
A prospect compares two strata management quotes. Both say “no commissions.” On paper they look the same on that line, so the prospect moves to comparing the management fee. The lower fee wins.
What the prospect doesn’t see is that one of the two quotes is doing something different with the word “commissions” than the other.
Some agents don’t take commissions in the way the quote describes, but they don’t need to. Where a strata management group has an ownership interest in an insurance broker, the broker collects a “broker’s fee” from the owners corporation when the policy is placed. That fee flows to a related body corporate of the strata managing agent. Same ownership group. Different legal entity. Different invoice.
No commission to the managing agent. Technically true. In my view, structurally misleading.
What the law requires
The NSW framework on disclosure is more developed than most committees realise.
Section 60 of the Strata Schemes Management Act 2015 requires strata managing agents to disclose commissions and training services received in connection with the scheme. The disclosure has to happen at the Annual General Meeting. It covers commissions or training services received or paid for the agent during the preceding 12 months, and any that are likely to be received in the following 12 months.
Subsections 60(2A) to (2D) go further. Before entering a contract for goods or services where a commission applies, or where the contract is with a connected person, the agent must give written notice to the owners corporation. The notice has to identify the commission or the connection, and must include a statement that entering the contract does not contravene the conflict-of-interest rule in the Property and Stock Agents Regulation 2022, Schedule 1, section 11.
Section 57(3A), which commenced 3 February 2025, added another layer. Where a commission or training service falls outside the agency agreement, approval now requires a resolution in a general meeting, not a quiet mention in an AGM report.
So the framework exists. Disclosure is required. Connections must be declared. Conflicts of interest are prohibited.
Where the gap shows up
To be clear: commissions are lawful today where they are disclosed and approved under section 57(3) of the Act. Some businesses rely on them. My view is the industry should be moving away from commissions altogether, but until then, the disclosure standards around them need to be better than what some agents currently rely on.
The standard “Notice to Engage” issued under section 60(2A)–(2D) frequently reads like this. Headings such as “Benefits to Property Owners.” Language like “your managing agent receives no direct payments from this arrangement.” A reference to a “broker’s fee” with the exact amount “to be disclosed once you select specific insurance services.” A line confirming that the broker and the agent are “associated entities” or “related bodies corporate.” All of it laid out in bullet points designed to be skimmed rather than read.
Every line is technically compliant. Together, in my view, they are structured to make sure the committee doesn’t ask the next question.
The next question is simple: where does the broker’s fee actually go?
If the broker is an “associated entity” or “related body corporate” of the strata managing agent, the fee flows to the same ownership group. The managing agent doesn’t get a direct cheque. The parent does. Same economic outcome, different paperwork trail.
This is a real regulatory concern
It isn’t only my view that NSW disclosure standards have room to improve. The enforcement record makes the same point.
On 15 May 2025, Southern Cross Strata Management Pty Ltd gave an enforceable undertaking to NSW Fair Trading for contraventions of section 60 of the Strata Schemes Management Act. The firm paid $40,000 into the NSW Consumer Law Fund. The undertaking is published on the NSW Fair Trading enforceable undertakings register and runs to 15 May 2027.
In October 2025, NSW Fair Trading published a Statement of Regulatory Intent specifically on strata managing agent disclosure obligations under sections 57 and 60. The statement signals that the regulator views these provisions as enforcement priorities, not technicalities.
The law has teeth. It just hasn’t yet caught up with the structural disclosure problem that vertical ownership creates.
What committees can do
There are four questions any committee can put to a prospective strata managing agent in writing. They are quick, plain English, and the answers tell you most of what you need to know.
- Does any related entity, associated entity, parent company, subsidiary, or shareholder of your firm receive any form of payment – commission, broker’s fee, referral fee, service fee, equity distribution – in connection with goods or services supplied to the schemes you manage?
- If the answer to question 1 is yes, in what form, from which suppliers, and how is that disclosed to the owners corporation?
- What is your firm’s policy on commissions and related-party payments? Is it written into your agency agreement?
- Can you provide a sample “Notice to Engage” issued by your firm under section 60(2A) to (2D) of the Act in the last 12 months?
The first three questions test the substance. The fourth tests how transparently the firm communicates with the committees it already serves.
The Bettr Strata position
For Bettr Strata, the answers to those four questions are straightforward, and they are written into our agency agreement.
No commissions. No related entities taking fees. No ownership stakes in brokers, in suppliers, or in any other service provider to the schemes we manage. The insurance market is quoted independently by an arms-length broker. The owners corporation receives the quotes and the owners corporation decides. If there is no fee disclosed, there is no fee.
That should be the floor for the industry. Today, it is the exception.
A standard worth pushing for
The structural answer to the disclosure problem is plain-language disclosure that an owners corporation member without a law degree can read and understand. How much. Paid to whom. With what relationship to the agent.
Until the industry insists on that as the standard, committees will keep being told there are no commissions when the money is just taking a longer route to the same destination.
If your committee would like a copy of our agency agreement to compare, or if you would like a no-cost review of the disclosure documents you have received from your current agent, contact us.
JM
Founder + Managing Director
Bettr Strata
This article reflects the position of the Strata Schemes Management Act 2015 and the Property and Stock Agents Regulation 2022 as in force at the date of publication. It is general information, not legal advice for any particular scheme.