Prohibit conflicted remuneration
One of the recommendations is a ban on strata managers from accepting commissions. Although REINSW considered this approach to be the most transparent option, it advocated for this reform to be accompanied by a practical implementation framework and reasonable transition period with a focus on ensuring the continued success of businesses whilst minimising disruption in industry.
Monitor conflicted relationships and educate owners and managers
Plans were recommended to evaluate the 2025 disclosure changes by 2028 to reduce harm from connected suppliers. REINSW supported mandatory broker fee disclosure to improve transparency across the industry (including connected persons and businesses) and suggested clearer guidance around how integrated structures would be regulated and monitored.
Gradual transition period for existing agency agreements
It has been recommended that there be a 3-year transition period to allow existing strata management agency agreements to roll into non-commission terms as they expire. Although REINSW advocated for a 5-year transition period to permit strata management agencies time to adjust and implement the changes into their business structure, the recommendation recognises, in principle, the reasons REINSW put forward in support of mandating a transition period.
Support industry and owners to transition away from commissions
One recommendation is for Government to deliver an education campaign, require more prominent mandatory disclosures of remuneration at AGMs, investigate standardised templates and provide communication tools to help owners and managers adjust. REINSW identified the importance of, and emphasised the need for a, Government-led statewide consumer education campaign and significant re-education program for owners corporations to understand new fee structures.
Monitor and evaluate changes
It has been recommended that Government tracks compliance during the shift from commission-based remuneration, possibly assigning IPART a monitoring role and evaluating prohibition effectiveness within 2 years of implementation. REINSW highlighted to Government that compliance monitoring details were lacking in the consultation and advocated for clarity on this issue.
Revisit burdensome regulations
Another recommendation is for Government to remove the 3-quote insurance rule after the 3-year transition takes place, aligning insurance arrangements with other contracts. REINSW was thrilled to see this recommendation in the report, as it had previously lobbied for the removal of this requirement on many occasions.