Apartment owners unaware of kickbacks

Australian apartment owners are in the dark when it comes to kickbacks paid to companies that manage their buildings.  

The 2025 Australian Apartment Advocacy (AAA) Apartment Survey, which spoke to 1100 owners nationally, found more than half (53 per cent) of apartment owners did not know whether their strata manager received a commission from the insurance companies that insure their complex. This insurance is compulsory.

An ABC Four Corners investigation last year revealed some apartment owners are paying a high price for lack of transparency because some strata managers obscured lower-priced insurance and encouraged owners to select more expensive polices so the strata manager received more commission. 

The 2025 Apartment Survey found of the 33 per cent of apartment owners who knew their strata manager received a commission, half would prefer to pay higher management fees and have the comfort of knowing no commission was paid to the strata manager (and therefore that there was no conflict of interest in the choice of insurance).

Of the 16 per cent who knew their strata manager did not receive an insurance commission, almost two-thirds (64 per cent) preferred to pay a higher management fee. The remaining owners said they would prefer lower management fees and commission paid to the strata manager.

AAA director Samantha Reece says it is vital that there is transparency and enforcement around commission payments.

“Strata companies that do not put the interests of apartment owners first and do not declare conflicts of interest, or worse, engage in deceptive conduct, are undermining consumer confidence in the apartment industry,” Ms Reece says.

Ms Reece says paying a commission on a compulsory insurance product creates a conflict.

“As well as questions over whether it is right for strata managers to be paid a commission on compulsory building insurance, AAA is concerned that some strata managers order yearly building valuations (valuations are recommended every three years) to inflate replacement values and therefore commissions.”

The WA State Government has undergone consultation regarding amendments to the Strata Act with announcements expected in May.

“We know that there is a strong movement from many agents away from the insurance commission because it is an archaic process which clearly is being abused by some in the strata sector.

“Strata managers have a contractual obligation to take direction from the Strata Council and what is quite clear from this research, is that consumers are shunning insurance commissions and as such – so should the strata management sector.

“We know of one Strata Community Association member and former President of the WA Chapter that not only falsified AGM minutes to increase the value of the building, but also has not been declaring the insurance commissions which is in contravention of the Act.

“It is this bias against the apartment owners that we wish to wipe out.”