NSW Strata Managers to Eliminate Insurance Commissions by 2026

Under the new policy, SCA NSW members issuing new standard management contracts will no longer be able to accept commissions on insurance products. This change will apply to both SCA NSW’s standard contract templates and any custom agreements used by members. The association’s leadership states that the reform is intended to increase transparency and align with evolving expectations in the sector.

Consumer advocacy groups have welcomed this development. The Australian Consumers Insurance Lobby (ACIL) described it as a step toward clearer pricing and improved alignment with owners’ interests. ACIL chairperson Tyrone Shandiman emphasized the importance of closing loopholes, particularly related-party arrangements, and ensuring all financial benefits are transparently disclosed and passed through to owners.

This commission phase-out coincides with a suite of new legislative reforms in NSW, which took effect on July 1, 2025. These reforms include enhanced transparency in contract terms, new reporting obligations for strata managers, and the integration of sustainability measures into annual general meetings. Strata managers are now required to provide detailed written reports to owners corporations every six months, outlining contractual tasks and activities.

While consumer groups have largely supported the changes, some industry leaders have expressed concern about the financial impact on strata management businesses. Bobby Lehane, CEO of PICA Group, warned that removing insurance commissions could significantly affect operating margins in a sector already facing profitability challenges.

According to a PICA survey, property owners are divided: 34% support retaining commissions, 38% prefer a fixed-fee model funded by insurers, and 29% support eliminating commissions if other fee structures are adjusted.

Key benchmarks for this transition include:

• July 1, 2024: Strata Insurance Best Practice Disclosure Guide became mandatory for SCA NSW members.
• July 1, 2025: SCA National Code of Ethics to be implemented.
• January 1, 2026: New contracts by SCA NSW members will not include insurance commissions.

With over 91,000 strata schemes, encompassing more than 1 million lots and a total insured property value of $486 billion, this reform marks a pivotal shift in NSW’s strata management landscape.