There’s an eerie quiet in mainstream media about the biggest story in strata.  As reported in Flat Chat last week, strata management giant Netstrata and its managing director Stephen Brell are facing trial on criminal charges in the NSW Supreme Court.

Strata Community Association (NSW) – the strata managers’ professional body – has suspended the company’s membership and Brell, SCA’s former President, has stepped aside from his executive role in Netstrata and, according to the Insurance Business website, will return to day to day management “while a current legal process plays out”.

Last week, NSW Fair Trading announced it had filed charges in the NSW Supreme Court alleging the firm contravened statutory obligations, failed to comply with fiduciary duties to owners corporations, did not adequately disclose conflicts of interest, received profits from undisclosed financial benefits and provided false or misleading information to the regulator.

Regardless of the outcome of the legal action, and Netstrata and Brell may yet prove their innocence, this is a very big deal in strata, but not it seems in more popular newspapers or news websites.

A quick Google search discovered that the only online media references to the charges were in trade magazines like Insurance Business magazine and the related  Insurancebusinessmag.com.au, Insurance news, Lawyerly and Real Estate Business.

Why the preponderance of insurance-related publications? Well, some of the charges are related to allegations that Netstrata concealed commissions for arranging strata insurance policies, income the law says strata managers are required to declare.

“For stakeholders in the strata space, the prosecution suggests a clearer signal about future regulatory expectations around disclosure and conflicts of interest, principles that – despite the interpretation of some brokers in the sector – could apply equally to insurance intermediaries,” says the website.

In other words, insurance brokers had better check to see if their strata manager clients are properly declaring commissions, especially if they are owned by the same parent company.

To be fair, there are legal issues with reporting ongoing court cases that mean the media can’t say too much.  But there are other significant factors: mainstream media doesn’t understand strata, and because of that it doesn’t care.  Meanwhile the links between strata managers and developers – who spend lots of money on advertising – can be tighter than is healthy for us, their customers.

However, there were voices that needed to be heard who got their messages out by toher means.

“It’s encouraging to see NSW Fair Trading continuing to take decisive action in the strata sector,” Tyrone Shandiman, chair of the Australian Consumer Insurance Lobby (ACIL)  says in a LinkedIn post. 

“Of all the governments and regulators we’ve engaged with over recent years, NSW has been the most publicly active in tackling transparency, governance and conflicts of interest. Whether through legislative reform, investigations or enforcement, this demonstrates a clear commitment to improving consumer outcomes and strengthening confidence in the industry.”

And our good friend Amanda Farmer, speaking on behalf of the Australian College of Strata Lawyers, said this was a watershed moment for the strata sector”.

“In September 2024, the College said there was no ‘Strata Cop’ on the beat in any Australian jurisdiction, and that it should never fall to strata owners to identify, investigate, and prosecute breaches of strata law by their own managers. This prosecution shows that the regulator is now on the beat – at least in NSW. Whatever the outcome, which is a matter for the court, active enforcement of this kind is what the College has been calling for,” she wrote in a press release.

“What is striking is that the regulator’s announcement puts fiduciary duty front and centre. The College has said consistently that strata managers are fiduciaries: they must not profit from their position, and disclosure alone does not cure a conflict of interest. Fiduciary obligations are not an abstract legal concept. They are enforceable duties, and this prosecution signals that regulators are prepared to
treat them that way.

“This prosecution doesn’t arrive in a vacuum. The NSW Government strengthened disclosure laws in February 2025, SCA (NSW) announced the phasing out of insurance commissions for its members this year, and the Productivity and Equality Commission’s final report in March recommends prohibiting commissions altogether. The College’s position has been consistent throughout: we need structural reform and effective enforcement behind it. Governments in every State and Territory should be watching.”

However, as a strata lawyer and commentator on all things strata, Ms Farmer is acutely aware that whenever there are negative reports about any strata managers – however isolated their cases may be, the whole profession and individual opertors take a credibility hit with their clients.

“The strata management sector contains many professional, competent, and ethical managers,” she wrote. “This development shouldn’t be read as an indictment of the profession. It should be read as accountability finally arriving. Accountability is ultimately what will restore owner trust in the sector. Managers who are acting as true fiduciaries have nothing to fear from enforcement and everything to gain from it.”

Regardless of the lack of mainstream media interest, this IS an important story. So why not pass it on to someone you know who lives in strata and wonders whatever happened to Netstrata.