00:00 The company is called Net Strata. It's one of the most high profile in the country. It's
00:06 won many, many years awards. Its head is the New South Wales President of the industry
00:12 peak body. And what we've discovered is that this company's insurance arm has been charging
00:19 eye-watering brokerage fees, which are not ordinarily in the financial returns which
00:26 are provided every year to Strata owners. And in the examples that we've seen, those
00:32 owners have had to go and chase the company to get these invoices. The company now says
00:37 it provides them at the time that they're issued. But we're talking about brokerage
00:41 fees as high as 60%, when as you say, the typical fee is something in the order of 5
00:48 to 20%. But we've also found, Dan, that this company has been receiving kickbacks from
00:53 contractors that it hires on behalf of the Strata schemes that it manages. So while it
01:01 is already paid to arrange these contractors under its contract, those contractors are
01:07 kicking some of that money back. Mr Brell confirmed yesterday it can be as high as 15%.
01:12 Wow. And you've been speaking to people right across the country. What have you been hearing?
01:17 Well, this is not a New South Wales issue. This is in every place where we have apartments.
01:23 In all the capital cities and beyond. I've been deluged already this morning. We only
01:28 published this investigation this morning with other stories. And that's why today,
01:33 Dan, we're launching a national investigation. We've got a special website, abc.net.au/strata,
01:39 for people to come to us and share their stories, because this does appear to be an area of
01:45 neglected public policy. A lot of Strata owners are saying they're left out of pocket.
01:50 And given that you've already been swamped this morning and you've set up that website,
01:55 what do you expect to be the scale of this problem?
01:59 I think enormous. I think it's been a sleeper issue for a long time. The structure of these
02:04 management contracts confers enormous power on these companies. And it's in situations
02:10 where a lot of apartment owners aren't au fait with reading financial statements and
02:14 they're very busy in their own lives. And so it's created a kind of perfect storm. And
02:20 there are really serious issues that exist in the industry, not particular to Netstrata,
02:25 where there are murky relationships with developers. When they build these new buildings and create
02:32 a relationship with a Strata management company, that's lucrative for the Strata management
02:36 company. And, you know, what does the developer get out of it? So that's one of the areas
02:40 that we're investigating.
02:41 Yeah, Linda, it's been a good day for you.
02:44 And you can share your experiences with Strata management on the ABC website. Head to abc.net.au/strata.
02:52 [BLANK_AUDIO]
Comments