Strata sector clean-up: Industry leaders commit support
In the two biggest apartment markets in the nation, industry leaders have stressed that they will work with governments to reform the strata sector.
According to the Real Estate Institute of New South Wales (REINSW), the recent media spotlight on the strata industry – including an investigative report by ABC’s Four Corners – should serve as a “wake-up call” for professional services providers.
Emphasising, however, that it’s the work of a few bad actors who have put the strata industry in the spotlight, REINSW CEO Tim McKibbin said it should be noted that the “overwhelming majority of strata managers do extremely important and valuable work for their clients”.
Nonetheless, he remarked that all professionals in the industry should take note.
“The recent focus on strata is a timely reminder to ensure your knowledge and understanding of compliance and disclosure obligations is completely up to date,” he said.
Real Estate Institute of Victoria (REIV) CEO Kelly Ryan similarly stressed how important it is that strata managers undertake continuing education to stay compliant with best practice.
“The crucial role of owners corporation management in Victoria’s housing landscape cannot be understated, and its critical the right systems and training are in place to ensure practices are consistent with the high professional standards we expect across the rest of the real estate sector,” she said.
Ryan also commented on the increasing importance of strata management as more and more Australians choose apartment living, noting that between 2001 and 2021, the number of Victorian strata occupants grew from 27,190 to 137,063 – more than quadrupling in size over just two decades.
Institutes to assist with reform
The owners corporation chapter committee of the REIV is currently working on a submission to the state government asking for mandatory minimum qualifications for people working in strata management.
Acknowledging that this would bring change to its strata professional members, Kelly said that the organisation is committed to working with both the strata sectors and authorities to “support the right framework of legislation, regulation and training in strata management”.
In NSW, new legislation is already underway to outlaw some of the behaviours uncovered in recent media reports, such as failing to disclose conflicts of interest to strata boards and taking commission on insurance products without working to find the best deal for residents.
REINSW emphasised its commitment to helping strata professionals navigate the coming changes, while defending the good operators and ejecting those doing the wrong thing from the industry.
McKibbin noted that REINSW is also advocating for appropriate penalties for strata’s wrongdoers.
“Part of any collective effort between industry and government to lift professional standards and increase consumer confidence in strata should include deterrence, which means appropriately punishing those who knowingly breach their obligations,” he said.
He also commented that further rule breakers will meet repercussions they have brought upon themselves.
“The main lesson of the recent focus on unethical strata management companies is clear: if you engage in activities that are contrary to your clients’ best interests for your own gain, you will destroy your reputation,” McKibbin said.
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