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NSW strata reform: Peak body ends agent incentives
NSW’s peak strata body will scrap insurance commissions for agents, ensuring landlords benefit from clearer costs, greater transparency, and higher standards in property management.
Starting next year, the Strata Community Association (SCA) in NSW will replace agents’ insurance commission payments with a fee-for-service model and a cost increase for additional services agreed upon with clients.
As part of the changes taking effect on 1 January 2026, new SCA (NSW) standard management contracts issued by the body’s members will not include an option to accept commissions on insurance products.
SCA (NSW) members who use their own management contracts will also not offer the option to accept commissions on insurance products.
“Previously, remuneration was received from commissions for the critical value (that) strata managing agents provide as part of the insurance supply chain,” SCA (NSW) said.
“Moving forward it will be replaced with a combination of fee-for-service for insurance and an increase in agreed services, in consultation with clients.”
SCA (NSW) said that the new measures are part of its commitment to raising professional standards, enhancing consumer trust, and delivering improved outcomes for strata communities.
Robert Anderson, SCA NSW president, said the decision was a “milestone moment for strata”.
“The decision to replace insurance commissions over this phased transition has not been made lightly, or quickly,” he said.
“Undertaking this reform is about delivering transparency, trust, and showing leadership.”
Anderson added that the reform is designed to deliver transparency, accountability, and pricing simplicity for owners and committees.
“For managers and their businesses, it will deliver certainty, business sustainability, and improve trust and credibility with clients,” he said.
“Strata managing agents should be proud to talk about the value they bring to consumers and why they should be paid to carry out these critical tasks in relation to strata insurance, and this reform will deliver on that.”
The national SCA previously made its Strata Insurance Best Practice Disclosure Guide mandatory for its members on 1 July 2024.
Anderson said that the SCA (NSW) reform builds on the commitment initiated by the SCA’s decision and creates another benchmark for the sector.
He added that SCA (NSW) has been working hard to ensure a fair and sustainable future for strata communities across the state.
“SCA (NSW) has commissioned independent research to support its decision-making, which will be made available in the coming weeks and has drawn from intensive engagement across the sector,” he said.
“We know this transition may be challenging for some in the industry, however SCA (NSW) will be spending significant time and resources supporting members with training, resources, and education throughout the transition, and with much more detail in the coming weeks,” Anderson concluded.
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