Vantage Strata’s Chris Miller: the ACT should not have a two-speed system. Photo: Vantage Strata.
The ACT should legislate to ban commissions in the strata industry, according to Chris Miller, the president of the industry’s peak body in the Territory.
Mr Miller has been leading the charge for ACT strata managers to wean themselves off commissions in the wake of the damning 4 Corners program last year, highlighting insurance industry and contractor kickbacks.
He was speaking after the NSW Strata Community Association announced that members would begin a three-year phase-out of insurance commissions from 1 January 2026.
Mr Miller, who is also Vantage Strata’s director of business development, said most SCA (ACT) members were already on board with a phase-out, but had yet to ratify a decision to do so; the biggest player in town, Civium, opposed any change.
He said that the government would have to legislate to avoid the ACT having a two-speed system.
New SCA (NSW) standard management contracts issued by SCA (NSW) members will not include an option to accept commissions on insurance products, and SCA (NSW) members using their own management contracts will also not offer the option.
The revenue foregone will be replaced with a combination of fee-for-service for insurance and an increase in agreed services, in consultation with clients.
Mr Miller said SCA (ACT) members LJ Hooker Strata, Vantage Strata, Signature Strata and Bridge Strata all supported moving away from commissions.
He said Vantage Strata had already adopted a policy to do that.
“We’ve probably renegotiated about half of our management contracts,” he said.
“We think we’ll be finished by the end of the year, and I’m aware that many of my peers are doing the same thing.”
Mr Miller supported banning commissions when he gave evidence to the Legislative Assembly inquiry into the strata sector earlier this year.
Civium would not comment publicly and referred to its submission to the Legislative Assembly inquiry into strata management, which argued that banning commissions would impact the viability of strata management companies, their ability to maintain services and result in an increase in fees for owners.
“Our company alone would lose over $1,000,000 annually until we could adjust our fees and operating models, which may take up to three years to wind out of our existing contracts,” Civium said.
“The industry is predominantly run by small family businesses without the cash reserves to absorb such large losses.”
Civium said that unnecessary regulatory layers would drive up costs for the end consumer without improving outcomes.
But Civium Chair Doug Omara did tell the inquiry in July that he supported legislation requiring full disclosure of commissions, about which Civium was fully transparent.
ACT Owners Corporation Network president Gary Petherbridge said commissions should go, even if it meant higher costs for property owners.
Mr Petheridge said their removal would create complete transparency of charges and costs.
“But we recognise that if they do that, owners would need to recognise that it may have been a revenue stream for the strata managers and therefore some of their other costs may go up because of that,” he said.
“It’s more about transparency and not necessarily about cost reduction.
“Whether it’s commissions on tradesmen or on insurance products, those things need to be more obvious to the individual in unit title properties.”
ACCC chair Gina Cass-Gottlieb has called for all strata insurance commissions to be banned and condemned undisclosed arrangements as deceptive.
