Why Owners Change Strata Managers – A Lack of Transparency

Poor communication may be the most commonly cited reason owners corporations change strata managers, but it rarely travels alone. Running closely behind it — and often tangled up with it — is a lack of transparency. When owners can’t see where their money is going, don’t know whether their manager has financial relationships with the contractors they recommend, or simply can’t get a straight answer about what they’re actually paying for, trust erodes fast.

In our LinkedIn poll on why owners corporations switch strata managers, Transparency tied with Price at 24% of the vote. It’s a telling result. Transparency and price concerns are rarely separate issues — when fees are opaque and relationships undisclosed, owners naturally start to wonder whether they’re getting value for money at all.

In this article, we explore why transparency matters so deeply in strata management, what the NSW Government is doing to address the problem at an industry level, and what genuine transparency actually looks like in practice.

Why Transparency Matters in Strata Management

Strata living is, at its core, a financial arrangement. Every owner in a scheme contributes to shared funds — for maintenance, insurance, administration, and capital works — and trusts that those funds are being managed responsibly on their behalf. That trust depends on one thing above everything else: being able to see what’s happening.

Transparency in strata management means owners have access to clear financial reporting, understand how decisions are being made, know who their strata manager is and how to reach them, and can be confident that the people managing their building aren’t being quietly incentivised to recommend one supplier over another.

When that transparency breaks down, the consequences are predictable. Owners start questioning whether invoices have been inflated. Committees wonder whether the contractor selected for a major job was actually the best option, or simply the one that paid the highest referral fee. Levy increases become a source of suspicion rather than an accepted reality of building management. And once owners start asking those questions, it’s very hard to rebuild confidence without meaningful structural change.

The concerns owners commonly raise around transparency include a lack of access to financial records, unclear or bundled fee structures, limited visibility over how maintenance decisions are made, and — most persistently — the practice of strata managers accepting commissions from insurance brokers and other service providers without adequate disclosure.

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What the NSW Government Is Doing About It

It isn’t just frustrated owners who have identified the problem. The NSW Government has been actively working to address transparency gaps across the strata industry, and the reforms passed in early 2025 represent the most significant regulatory shift in years.

Under new strata laws that came into effect in February 2025, strata managers in NSW are now legally required to disclose any connections with suppliers and developers, provide detailed breakdowns of insurance quotes including all commissions and broker fees, and update owners corporations promptly if any new conflicts of interest arise during their appointment. Strata managers must also provide enhanced annual reports to owners corporations detailing any supplier and developer relationships.

NSW Fair Trading is enforcing these ongoing disclosure obligations with significant penalties — up to six figures — for those who fail to comply. As Minister for Better Regulation and Fair Trading Anoulack Chanthivong noted at the time: “Strata owners deserve clear, timely, and honest information from their managers.”

A third tranche of reforms is also underway, focused on developer accountability and financial hardship provisions. The regulatory direction is clear: the era of opaque strata management practices is coming to an end.

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The Insurance Commission Question

Of all the transparency concerns in strata management, the practice of accepting insurance commissions has attracted the most scrutiny — and the most significant regulatory attention.

For years, many strata managers have received commissions or referral fees from insurance brokers in exchange for directing their clients’ business their way. Owners often had no idea this was happening, or — if disclosed at all — had little sense of the actual dollar amounts involved. The result was a structural conflict of interest baked into one of the most significant financial decisions an owners corporation makes each year.

The scale of the concern prompted the NSW Government to commission a dedicated review. The NSW Productivity and Equality Commission’s Strata Commissions Review examined the market impacts of prohibiting strata managers from accepting commissions and other conflicted remuneration, and its findings were significant. The Commission found that a phased transition away from a commissions-based model to a fee-for-service structure could generate net benefits for NSW of more than $300 million over the next fifteen years, and made recommendations including a phased prohibition on commissions over a three-year transition period.

While commissions remain permitted where properly disclosed, the regulatory direction is firmly toward reducing and ultimately eliminating them. The industry’s own peak body has moved accordingly. SCA (NSW) welcomed the review’s release and had already taken proactive steps, commencing a voluntary phased replacement of insurance commissions for its members from 1 January 2026. As SCA (NSW) President Robert Anderson explained, the decision was driven by a commitment to raise professional standards, strengthen consumer trust, and deliver better outcomes for owners and residents.

The question for owners corporations right now is whether their current strata manager has got ahead of that change, or is waiting to be pushed.

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What Genuine Transparency Looks Like

Understanding the problem is one thing. Knowing what to look for in a management firm that takes transparency seriously is another. Here’s what genuine transparency looks like in practice.

A clear, predictable fee structure. Owners should never have to wonder what they’re paying for. A transparent strata manager operates on a simple, disclosed fee-for-service model with no hidden charges, no bundled costs that obscure the real price, and no commissions folded into the management arrangement. Our fee structure is straightforward: a management fee, a fixed disbursement fee, and a clearly published rate card for any additional services — so committees can see exactly what any given task will cost before it’s actioned.

Commission-free insurance management. A strata manager who receives commissions from insurance providers cannot be fully objective when it comes to recommending coverage. We take great pride in the fact that our agency agreement is commission-free, which means that we do not receive any rebates or commissions in connection with providing our strata management services. We also have no affiliations with any insurance brokers, insurance companies, building management companies, or trade companies. Any service providers we recommend are selected solely based on their ability to meet our clients’ needs.

A dedicated, named Sydney-based team. Opacity in strata management often comes down to something simple: owners don’t know who is actually responsible for their building. Generic inboxes, anonymous responses, and revolving-door staffing leave committees with no idea who to hold accountable for anything. Our model assigns each building a named Senior Strata Manager and a dedicated Assistant Strata Manager — people you can call directly, whose email address you actually have, and who understand the specific history and challenges of your scheme. Alongside them, you have direct access to our Strata Finance team, Insurance Services Manager, and Advice & Compliance specialists when you need them.

Real-time visibility through our Owners Portal. Transparency isn’t just about disclosure — it’s about access. All owners and committee members receive access to our Owners Portal, powered by SMATA, which provides real-time financial reporting, work order tracking, invoice visibility, and document storage in one secure location. You shouldn’t have to request a financial report to find out where your levies are being spent — you should be able to see it at any time.

Defined response and escalation standards. Our Service Level Agreement sets out clear, measurable commitments: Strata Committee queries responded to within two business days, urgent safety or compliance issues escalated within two hours, and insurance claims lodged within two business days of all required information being received. Accountability is only meaningful when it’s written down.