Strata manager conflicts of interest
- leigh_oliver
- Oct 18
- 2 min read
Updated: Oct 19
A huge thank you to Dr Nicole Johnston for publishing her outstanding research into the strata management industry, and for shining a much-needed light on areas many strata businesses would probably prefer stayed in the shadows.
The concept behind XO Strata was born after the 2024 ABC Four Corners exposé “The Strata Trap” and the belief that an exodus from the large, vertically integrated strata companies was inevitable. Those traditional models, entangled with insurance brokers and third-party commissions, no longer serve the best interests of owners.
We believed there had to be a better way; a business built on independence, transparency, and the fiduciary duty owed to every strata lot owner.
Real change means rethinking the way our industry prices and delivers services. Dr Nicole’s research challenges us all to do better. At XO Strata, we’re committed to being part of that change.
Dr Nicole Johnston identifies four key pillars of change needed to restore trust and professionalism in our sector:
1️⃣ Eliminate Insurance Commissions
The dependency on insurance commissions creates an inherent conflict between a manager’s fiduciary duty to owners and their own profit motive. The report calls for commissions to be banned, with strata managers instead paid through transparent, fee-for-service models that reflect the true value of their work.
2️⃣ End Developer-Linked Appointments
Many strata management companies are appointed by developers during the initial set-up phase, often tied to financial or consulting arrangements. This compromises independence and discourages managers from acting for owners when building defects arise. The report recommends severing these ties so managers are selected by, and accountable to, the owners' corporation.
3️⃣ Dismantle Vertical Integration and Related-Entity Deals
Vertical integration occurs when strata firms are affiliated with insurance brokers, maintenance providers, and other service providers. This entrenches conflicts of interest. The report urges a clear separation between strata management and associated commercial entities to restore transparency and competition.
4️⃣ Reform Staff Remuneration and Fee Structures
Incentive schemes and inflated “Schedule B” or ancillary fees encourage profit-seeking over service. Dr Nicole advocates remuneration models based on professionalism and expertise, not commissions or kickbacks, supported by transparent disclosure and fair pricing.
Together, these pillars represent a shift toward an ethical, professional, and owner-centric strata management model; one that prioritises fiduciary duty, independence, and trust.
If you prefer to listen, try this NotebookLM podcast ↓
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