Thirty years on, strata scandal history repeats

Subscribers to our newsletter will have already seen this but I thought it was worth a wider readership – JT.

There’s a saying along the lines of “those who do not learn from history are doomed to repeat it.” I paraphrase, but the idea was brought to mind last week when a reader (thanks, John) sent me a pdf printed from a story in the Sydney Morning Herald in 1992.

It was a yarn by the legendary investigative journalist, the late Ben Hills, about how a strata manager with their fingers in numerous pies was ripping off strata schemes through various schemes that charged hidden commission for hiring their own subsidiaries to perform work for their client strata schemes.

The alleged culprit was a prominent member of the board of the strata managers’ professional body, then called the Institute of Strata Titles Management (ISTMS) – now the Strata Community Association (SCA).

The president of ISTMS back then said it was a “grey area” and the strata manager concerned said they hadn’t done anything illegal.

If all of this sounds familiar, it’s because a couple of weeks ago then President of SCA-NSW Stephen Brell found himself in a similar pickle, following an expose by ABC journalist Linton Besser that alleged undisclosed insurance commissions were being paid to companies related to Netstrata, Brell’s company, which told its clients that it did not take commissions.

Brell resigned from his presidency and membership of the board of SCA-NSW but it’s worth noting that, probably, neither he nor his company, Netstrata, had done anything illegal. But whether or not they had done anything wrong is a whole other issue.

Anyway, for those of you who think the Netstrata saga is anything new, you can download a pdf of the fascinating SMH report on this case from 1992 HERE.

Meanwhile, I ask again, as a significant player in a state government that can’t send someone out on a coffee run without issuing a press release, when is our Strata Commissioner going to stand up, speak out, and announce a much-needed public inquiry into the strata management industry?

Addendum

May I just add this, for the umpteenth time, there are a lot of honest decent strata managers out there trying to do the best job for their clients. The scandal of embedded networks was first pointed out to me by a strata manager and the Netstrata situation was exposed with the help of a former employee.

The problem is that the way strata management is set up in NSW, it’s too easy for companies and individuals to do the wrong thing and that puts way too much pressure on the good, honest operators when they realise they are not competing on a level field.