• This topic has 10 replies, 7 voices, and was last updated 1 month ago by .
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  • #73326
    Jimmy-T
    Keymaster

      The allegations in an ABC News article, about strata managers Netstrata have seen its CEO Stephen Brell, step down as Strata Community Association (SC
      [See the full post at: Brell quits top SCA roles as Netstrata saga rolls on]

      The opinions offered in these Forum posts and replies are not intended to be taken as legal advice. Readers with serious issues should consult experienced strata lawyers.
    Viewing 11 replies - 1 through 11 (of 11 total)
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    • #73344
      Level_one
      Flatchatter

        I would suggest that the SCA may be incapable of cleaning up its act so the need for an independent review of the sector has never been more important than now.  A necessary outcome would be the development of a balanced Strata Management Contract perhaps with annual reporting of KPI’s.  The number of Strata that individual Managers are required to manage by the larger corporates guarantees that a reasonable level of service is most likely impossible.

        The Consolidation of the industry appears to be driven by maximising the returns to shareholders rather than servicing the client (Even in meeting the terms of the SCA contract ,which is not a high bar for the providers)

        Consideration could also be given to a model where the Strata owns the licence for a management platform and so retains all its records for a seamless transfer to another management agency.   At this time the lack of portability in changing Strata Managers is used as an anchor to retain clients.  The Building Management sector now has the option for Strata to own the licence and delegate to the contracted building manager.  Perhaps the time has come that all the reasons as to why this cannot be done for Strata Management need to be solved rather than being used as an excuse.

        I expect any independent review will need to employ more staff than anticipated to deal with all the submissions from Flat Chat, Owners Corporation Network and the many Strata that have been disadvantaged by the SCA model over many years.

        Perhaps the time has come for the Government to fund the Owners Corporation Network via the Strata Commission? so it is not dependent on funding from commercial organisations with vested interest.  The Tenants Union receives funding from the Government so it can be done for a not for profit organisation.

        Regards Stephen.

         

        • This reply was modified 1 month ago by .
        #73345
        StrataChair
        Flatchatter
        (from NSW)

          Thanks Jimmy. Yet another story of strata managers not acting in the interests of their clients. And they want to be accorded ‘professional’ status.

          SCA (NSW) amended its constitution in 2021 so strata owners can no longer be members and are no longer represented on the board.

          When I noted these items on the SCA AGM agenda for that year, I emailed the then-president to ask how this was consistent with the national SCA’s assertion of itself as:

          “… the peak body for Industry Managers Lot Owners, Tenants and Stakeholders living in or affected by Strata Title, Body Corporate, Community Title and Owners Corporations.”
          And “SCA proudly fulfils the dual roles of a professional institute and consumer advocate“. My emphasis.
          I received no reply. The constitution change went through.
          They’ve now changed the first part I quoted above to describe themselves as “the peak industry body for Strata and Community Title Management in New South Wales.” But they haven’t changed the second one.
          I guess they have a different definition of ‘consumer advocate’ from me.

          • This reply was modified 1 month ago by .
          #73351
          Jimmy-T
          Keymaster
          Chat-starter

            And they want to be accorded ‘professional’ status.

            They have, and very proud of it they are too.  I believe they are in some sort of probation period to see if they can abide by the code of conduct.  If so, they will need to clean up their act.

            I guess they have a different definition of ‘consumer advocate’ from me.

            And me.  As I have said many times, SCA-NSW represents strata owners no more than the Qantas Frequent Flyer program represent airline passengers.

            The opinions offered in these Forum posts and replies are not intended to be taken as legal advice. Readers with serious issues should consult experienced strata lawyers.
            #73365
            tina
            Flatchatter

              The conflicts are so outrageous that no one even talks about this part of the ABC report:

              “Netstrata is the naming rights sponsor of Jubilee Stadium, home of the St George Illawarra Dragons, and its managing director is Stephen Brell, the NSW president of the Strata Community Association (SCA).

              The SCA has awarded Netstrata “strata management company of the year” for four of the past five consecutive years.”

              #73368
              Jimmy-T
              Keymaster
              Chat-starter

                The SCA has awarded Netstrata “strata management company of the year” for four of the past five consecutive years.”

                I think you will find they were name “business” of the year. A subtle difference but, in the light of recent revelations, a significant one.  It’s all about the money.

                The opinions offered in these Forum posts and replies are not intended to be taken as legal advice. Readers with serious issues should consult experienced strata lawyers.
                #73384
                Jimmy-T
                Keymaster
                Chat-starter

                  Further to my comments in the article that Brell was a bit premature in his assertion that he was stepping aside but not out of the role as President of SCA-NSW, and that his members who have suddenly found themselves the focus of intense and unwelcome scrutiny might have something to say about that, the body’s CEO Craig Meagher issued this statement to members yesterday:

                  I want to follow up on our initial communication yesterday afternoon regarding Stephen Brell and Netstrata. I am writing to inform you that earlier today Stephen tendered his resignation as both SCA NSW President and Board Member. Tony Irvine, current Senior Vice President, will assume the role of acting NSW President.

                  It had to happen. If the culture is wrong, the culture carrier has to go before it can be fixed and be seen to be fixed.

                  The opinions offered in these Forum posts and replies are not intended to be taken as legal advice. Readers with serious issues should consult experienced strata lawyers.
                  #73386
                  Columbo
                  Flatchatter

                    I would like to understand this…

                    According to the ACCC website:

                    • When businesses communicate and cooperate, they risk damaging competition and breaking the law.
                    • Businesses that want to join together to negotiate with a supplier or customer through collective bargaining first need permission. This is known as an exemption.
                    • It’s not illegal to have market power. However, businesses must not misuse this power to stop other businesses competing on their merits.
                    • When the misuse of market power substantially lessens competition, it is illegal.
                    • A business risks breaching competition law when it engages in exclusive dealing by restricting how its customers or suppliers do business.

                    In the case of Netstrata and the building I live in, which you are familiar with, Jimmy,  it seems that there is certainly communication and cooperation between them and the developer, and possibly with the supplier of the Embedded Energy system. The question is whether that leads to a misuse of market power.

                    However, when I think back to the FAGM and the way that the motions were put to the owners, most of us being newbies to strata, my recollection is that there was no critical comment from the newly appointed strata managers as to the alternatives, if any. If that had been a presentation to potential uninformed investors into a public company, there would have had to be a risk disclosure to ensure that investors were suitably educated, I believe.

                    The question that follows this is, given that embedded network agreements provide benefits to developers while committing the downstream owners to paying for the equipment that is provided to the developer in order for the building to meet BASIX requirements and/or to be certified, shouldn’t the strata manager – Netstrata – inform the unit owners of this.

                    After all, minutes before at the FAGM, the owners voted to appoint Netstrata as the strata manager, and in doing so, Netstrata took on the role of a fiduciary with the relevant duty of care.

                    Interested to hear some views on this. It seems to me that it is the FAGM that is the nexus point for behaviours that put owners at a disadvantage. What do other strata management companies do in these circumstances? What is best practice?

                    #73388
                    Jimmy-T
                    Keymaster
                    Chat-starter

                      Not sure about this but I don’t think strata schemes come under consumer law, something the strata commissioner says he is looking to fix.  At least he won’t now have the SCA looking in one direction and making all the appropriate noises but pulling in the other.

                      My advice to all owners at their First AGM is now to tell the strata managers you are only there to elect a committee, the committee will look at the contracts, including the strata managers’ and come back in six weeks and approve them or otherwise. If any of the potential contractors aren’t happy with that – strata managers included – they can bugger off and they’ll find someone else to do the job.

                      In your specific case, Netstrata colluded with or at the very least enabled the developers, the contractors and service providers to stitch the owners up and it’s only regretful that your owners didn’t spot all the dubious deals before the seal was applied to some of the contracts. Even then Netstrata seem to have done their best to avoid the owners being informed about what had occurred (and their CEO was 100 per cent behind them).

                      The NSW government has been led by the nose by SCA-NSW who must surely now have their “professional” status closely examined.  Attendees at meetings hosted by John Minns when he was merely Property Services Commissioner, relate that he would sit at the head of the tale with now resigned SCA-NSW President Brell on one side and his predecessor and now National SCA President Chris Duggan on the other.

                      The code of conduct attached to that has several clauses about acting openly, honestly and in the best interests of the customers.  It’s now clear that to some prominent members of the SCA, all that meant was a badge of honour that allowed them to continue their dodgy dealings without serious scrutiny.

                      By the way, I briefly hooked into Amanda Farmer’s online chat on Friday where both I and strata law academic Cathy Sherry said the same thing – the strata managers who set up a scheme for the developers should not be the same company that then manages the scheme.

                      The opinions offered in these Forum posts and replies are not intended to be taken as legal advice. Readers with serious issues should consult experienced strata lawyers.
                      • This reply was modified 4 weeks, 1 day ago by .
                      #73390
                      Doncha
                      Flatchatter

                        Further to Colombo’s post

                        When we moved into our new building 12 years ago, (residential and commercial) the conditions of a BMC – Building Management Committee were not fully explained by Netstrata.  In spite of a meeting with Steven Brell and 3 lot owners to seek an explanation of a management fee hidden under the title of community funds in the BMC financial report.

                        We later learned that the management contract proposed by Netstrata at the first AGM did not reveal the contractual agreement that Netstrata had signed with the developer for 5 years in respect of the BMC. Being “innocents” the ramifications of this situation was not apparent until much later.

                        At that stage Netstrata’s action was considered lawful as the formation of a BMC in a multiple strata scheme required that a strata manager must be appointed.

                        In spite of the lengthy review of the strata act 2015/17 this aspect of the BMC has never been addressed and I have a friend who lives in a building that has a BMC with management rights contracted to Netstrata for 7 years as well as embedded contracts for electricity and communications.

                        Is anyone aware of any action on the part of the government to address this situation?

                        #73391
                        chesswood
                        Flatchatter

                          Positions as senior as Strata Commissioner are supposed to be widely advertised as part of a careful process to secure the best appointee. But that didn’t happen in John Minns’ appointment. Fine man though Minns no doubt is, the hazards of ministerial parachuting are on show today.

                          #73491
                          Nono
                          Flatchatter

                            Watch out for their senior managers too.  The rot doesn’t stop at Brell.  Especially the ones like [name redacted] who feign innocence and jump ship to  [another strata company].

                            This post has been edited because it named an individual and the company to which they moved, both of which are against our policies. The general point, however, is valid.  Brell can be named in this contexbecause  he is a public figure and what he has said and done is a matter of public record. – JT

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