Strata scheme put under the spotlight

Hidden fees, conflicts of interest, over-charging and side deals. For many years lead reporter Linton Besser had heard from owners and advocates concerned about strata schemes.

With three million apartment-owning Australians belonging to some 350,000 strata schemes around the country, it was clear these issues could be happening at scale and needed investigation.

In March, a story on 7.30 about high-profile strata firm Netstrata sent shock waves through the industry, revealing the company used its insurance arm to charge apartment owners insurance brokerage fees as high as triple the typical rate and was taking kickbacks from contractors and suppliers. To the outrage of owners and advocates, it was clear the company’s conduct had been permissible under NSW law.

Off the back of that story, ABC NEWS launched a crowdsourced investigation into strata schemes, asking owners and industry insiders to share their experiences. Thousands of stories poured in, culminating in Four Corners documentary The Strata Trap.

‌The ABC’s reporting has had a significant impact. Steadfast went into a trading halt, the ACCC Chair called for a ban on strata insurance commissions, and the NSW Strata and Property Services Commissioner was stood aside pending an investigation into his shareholding in a real estate and strata services company.

In response to the original 7.30 story, Netstrata managing director Stephen Brell stepped down as the president of the peak body for the strata industry in NSW and the NSW Commissioner for Fair Trading announced a review of Netstrata and its operations.

ABC reporters across the country are collaborating on the next tranche of stories, with several states already backing calls for a federal inquiry.