This article discusses NSW strata manager insurance commission disclosure and related entities and the need for transparency about conflicts of interest.
Question: Is it a conflict of interest for an NSW strata manager to direct a scheme to use an insurance representative company they control? What disclosure is required?
I am in NSW and have noticed that several strata managers have set up new companies in 2025 that operate as accredited representatives of insurance brokers. These accredited representatives receive a commission from the broker on our strata insurance.
The strata managers tell the strata committee that these companies are only “indirectly related” to the strata management business. However, the accredited representative companies often have the same directors as the strata manager, or are controlled by relatives, such as a cousin, an uncle, or a child. The websites for these companies are very basic, sometimes with no phone number and contact only via email.
When we question this arrangement, the strata manager says using their accredited representative is in the scheme’s best interests, but they provide no independent analysis or comparison. If the committee asks to deal with a different accredited representative that is not related to the strata manager, we are told no, or told we would need to change insurance brokers altogether.
Is this arrangement normal in NSW strata, and how should it be handled under conflict of interest and disclosure requirements for strata managing agents? What is the difference between being “directly related” and “indirectly related” where the same people, or their relatives, control both the strata management business and the accredited representative?
Answer: Arrangements of this type are not automatically prohibited, but they carry a high ethical risk.
The situation described does involve a conflict of interest. In strata management, a conflict of interest in itself is not prohibited, and the existence of a conflict does not automatically mean that a strata manager has acted improperly. What matters is how that conflict is disclosed, managed and whether the strata manager continues to act in the best interests of the owners corporation.
The Strata Community Association (SCA) National Code of Ethics (June 2025) is very clear on this point. It recognises that conflicts can arise, but requires strata managers to avoid unmanaged or undisclosed conflicts, to fully and proactively disclose all relevant interests (including commissions, referral arrangements, and related business entities), and to obtain informed consent from the strata community before proceeding. Disclosure must be meaningful and provided in advance of any decision, not after the fact.
Where a strata manager directs a scheme to use a representative that the manager controls, shares directors with the management business, or is controlled by close relatives, that is a related-party relationship for ethical purposes, regardless of whether it is described as “direct” or “indirect”. The Code focuses on control, influence and financial benefit, not on corporate labels. If commission income is being received as a result of that arrangement, it must be clearly disclosed and expressly approved by the owners corporation.
The Code also requires that procurement decisions be based on merit and value, with transparency and committee involvement. If a strata manager insists that the scheme must use their related accredited representative, refuses to deal with an independent representative, or effectively forces the committee to accept the arrangement by saying the broker relationship cannot continue otherwise, that raises serious concerns. Such conduct may indicate preferential treatment, undue influence and a failure to facilitate an impartial decision-making process, all of which are inconsistent with the ethical standards set out in the Code.
In addition to the Code of Ethics, strata managing agents in NSW owe a fiduciary duty to act in the best interests of the owners corporation. A fiduciary must be cautious not to place themselves in a position of conflict between their own interests and their duty to the owners corporation. Although disclosure and informed consent are relevant and may mitigate risk, they do not eliminate the underlying obligation to act solely in the client’s best interests. Using delegated authority to steer business toward a related entity, particularly where independent choice is restricted, risks breaching that fiduciary obligation.
In summary, arrangements of this type are not automatically prohibited, but they carry a high ethical risk. To comply with professional and fiduciary obligations, strata managers must be transparent, allow genuine choice, demonstrate that the arrangement is in the scheme’s best interests and ensure the owners corporation has given informed consent. Where those elements are missing, the conduct may breach both the SCA Code of Ethics and the manager’s fiduciary duty.
If the strata manager is a member of the Strata Community Association and there are concerns that their conduct is not consistent with the Code of Ethics, the matter may be raised through SCA’s complaints process, or where appropriate, with NSW Fair Trading.
Tyrone Shandiman Australian Consumer Insurance Lobby E: info@acilobby.org.au P: 07 3185 5256
This post appears in the April 2026 edition of The NSW Strata Magazine.
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