New laws passed to crack down on rogue SMs

New laws designed to crack down on strata managers receiving secret kickbacks while introducing higher penalties for agents doing the wrong thing, have passed the NSW parliament, the government announced overnight.

The changes are designed to counter a growing sense in the strata community that strata managing agents can take advantage of owners without consequences, says the government.

The new laws, announced earlier this year in the wake of the Netstrata scandal, will ensure “tough action” against strata managing agents who don’t properly declare conflicts of interest, says a press release from Minister for Better Regulation and Fair Trading Anoulack Chanthivong.

Key changes include:

• increasing the maximum penalties and penalty infringement notice amounts for existing agent obligations to disclose information about commissions
• strengthening the conflict-of-interest disclosure requirements
• banning agents from receiving commissions on insurance products when they don’t play a role in finding the best deal for residents
• strengthening NSW Fair Trading’s enforcement and compliance powers.

The higher penalties, greater transparency and new enforcement powers follow an $8.4 million investment in more resources for NSW Fair Trading to tackle issues in strata and property services in this year’s budget.

 “Building more high quality, higher density housing is a key pillar of the Government’s comprehensive plan to build a better NSW so we need people to have confidence to invest and live in strata schemes,” Minister Chanthivong said.

“The Government has wasted no time in tightening controls to respond to community concerns about accountability and conflicts of interest in the strata industry.

“These changes will help to restore the confidence of the 1.2 million people already living in strata schemes and change the perception that strata managing agents can take advantage of owners without consequences.”

No date has been set for the implementation of the new laws which will have to be formally gazetted before they come into effect.

“There will need to be a short transition period to allow industry time to be educated and change processes to be compliant with the new laws,” a spokesperson told Flat Chat. “We’re working with them to make the transition as quick as possible.”

Meanwhile, there has been no word on the future of Strata Commissioner John Minns who has stood aside following non-disclosure allegations aired in the ABC TV’s Four Corners program earlier this month. Natash Mann is currently Acting Strata Commissioner while the Minister awaits the results of the Fair Trading Secretary’s inquiries.