SCA-NSW to get lessons in professional ethics

Strata managers in NSW – or at least their governing body – are being nudged back on to the straight and narrow by the NSW government’s professional standards watchdog.

The Professional Standards Authority (PSA) says it is working with Strata Community Australia (NSW) to “focus on encouraging SCA to identify and manage the risks to consumers arising from… alleged unethical conduct.”  

The PSA’s stated aim is to promote compliance with the strata managers’ umbrella body’s own Code of Ethics.

As subscribers to the weekly Flat Chat newsletter will have already read, a couple of years ago Strata Community Association (SCA-NSW) held a big shindig to celebrate being awarded “professional” status in July 2021.

That meant they were on a par with lawyers and chartered accountants; with that elevated status came a commitment to abide by their own code of conduct as well as the Professional Standards Authority’s.

Fast forward to March this year when the whole question of secret commissions, conflicts of interest and vertical integration started to unravel with the Netstrata scandal.

Vertical integration is where strata management firms have subsidiaries that operate as anything from debt collectors and lawyers to building repair tradies. And what is often presented as cost-saving relationships, it has been alleged, can turn out to be opportunities for kickbacks and secret commissions.

Since then allegations from strata owners have reached the point where the NSW government didn’t even wait for the results of its own inquiry and rushed through new laws to protect consumers, with more on the way.

Yesterday, the Professional Standards Authority (PSA) responded to a request for a comment on whether the PSA was concerned about potential breaches of the SCA-NSW code of ethics – compliance with which could be a condition of maintaining professional status.

The SCA-NSW code of ethics (revised in July this year, after the Netstrata scandal broke) says all members must always act ethically and honestly, and not provide false, misleading, or deceptive information to anyone.

It also says members must “disclose and deal with conflict of interest issues in an open and fair manner, and … not pay or accept secret commissions, either directly or indirectly.”

The PFA says members must abide by their own code of ethics. Its website also says “if an association cannot meet these obligations, the relevant [professional standards] council may review and revoke its scheme.” 

So what does this mean for SCA-NSW and its much-vaunted professional status?

“The Professional Standards Councils are aware of media reports regarding emerging issues in the NSW strata management industry. The Councils continue to closely monitor these developments,” a spokesperson told Flat Chat.  

“The Professional Standards Authority has engaged with the Strata Community Association (NSW) (SCA), particularly in relation to promoting compliance with the SCA NSW Code of Ethics. Authority officers have also been in regular contact with NSW Fair Trading regarding regulatory responses to allegations against strata managers.

“The Councils will continue to engage with SCA to monitor its response to these issues. This will focus on encouraging SCA to identify and manage the risks to consumers arising from the alleged unethical conduct.”

In other words, the PSA is working with SCA-NSW to get it back on track with its own ethical code. That has to be a good thing, but given that some of the most senior members of the SCA-NSW hierarchy’s companies are being investigated by Fair Trading, it seems likely that a cultural change may be required and that’s neither going to be quick nor easy.

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SCA-NSW Code of Ethics

Meanwhile here’s the current SCA-NSW Code of Ethics – you can decide for yourself what might be needed to change in the way some (but by no means all) strata managers operate now.

All Members must always:

• Act ethically.
• Act honestly, be straightforward and sincere.
• Not provide false, misleading, or deceptive information to anyone.
• Be objective and fair, and do not allow prejudice or bias to override that objectivity.
• Be and appear to be free of any interest, which might be regarded as incompatible with Integrity and objectivity.
• Use professional courtesy and deal with all Members, Strata Managers, Strata Committee Members, Owners, and any other persons in a respectful manner always.
• Act in a lawful manner and comply with the law as may apply from time to time.
• Act at minimum in accordance with the generally accepted standards of their industry and carry out their work in accordance with the technical and professional standards relevant to that work.
• Perform their duties diligently and with competence, maintain their level of competence, and only undertake work that they reasonably expect to be able to complete competently and in a timely manner.
• Disclose and deal with Conflict of Interest issues in an open and fair manner, and do not pay or accept secret commissions, either directly or indirectly.
• Treat confidential information obtained while acting for an Owners Corporation that has not been made public and that:
  • Is by its nature confidential
  • Was specified as confidential by the person who supplied it or
  • Is known by the Member to be confidential, unless.
    • The disclosure of the information is required by law; or
    • The Owners Corporation is fully informed of the proposed disclosure and agrees to it in writing.
• Not engage in any conduct that wrongfully brings disrepute to the SCA (NSW), its Members or the consumers of their services.
• Comply with the rules regarding displaying the SCA (NSW) logo and the Professional Strata Managers Scheme logo as promulgated by the SCA (NSW) Board from time to time.
• Not advertise in a way that is false, misleading, or deceptive which
  • Creates false or unjustified expectations of favourable results; or
  • Consists of self-laudatory or misleading statements that are not based on verifiable facts or
  • Contains unidentified testimonials.
• Not induce or attempt to induce a breach of contract between an Owners Corporation and its Strata Managing Agent.
• Not denigrate another Member, any individual, company or profession in general.
• Observe the Constitution of SCA (NSW) and any other guideline or standard formally approved and adopted by SCA (NSW).
• Conduct their business in accordance with the SCA (NSW) guidelines.
• Promote the aims and objectives of SCA (NSW) and strive for the highest degree of professionalism in the practice of Strata Management.
• Be active in SCA (NSW) and willingly share the lessons of their experience with fellow Members.
• Be responsible for the actions of their employees in their business relations with fellow Members and Owners of Corporations they manage.
• Conform to any CPD training as may be required by the NSW Department of Fair Trading and SCA (NSW) in accordance with the SCA (NSW) CPD Policy to retain Membership of SCA (NSW)
• Not knowingly or negligently include false information in their individual CPD records or any other declaration made to the board.
• Implement and abide by all requirements of the Strata Insurance Disclosure Best Practice Guide.