Is Your Strata Manager Taking Secret Commissions?

Your body corporate pays $80,000 a year for building insurance. What you don't know is that your strata manager just pocketed $12,000 of that as a commission. Nobody told you. Nobody had to.

This isn't hypothetical. Secret commissions are standard practice across the Australian strata industry, and they're costing apartment owners thousands of dollars every year in inflated costs. Your insurance premiums, maintenance contracts, and supplier deals may all include hidden kickbacks flowing to your strata manager, and you'd never see them on any statement.

If you're already concerned about what you're paying, start with: Are My Body Corporate Fees Too High? and How to Choose a Body Corporate Manager.

What Are Secret Commissions?

A secret commission is any payment, benefit, or kickback that a strata manager receives from a third party in connection with services provided to your body corporate. The most common types:

Insurance Commissions

The biggest one. Strata managers typically receive 10-20% of your building's insurance premium from the broker or insurer. On an $80,000 premium, that's $8,000-$16,000 per year, paid by you, received by them, often without disclosure.

This creates an obvious conflict of interest. Is your manager recommending the cheapest policy for your building, or the one that pays them the highest commission?

Contractor Kickbacks

Some strata managers receive referral fees or volume rebates from preferred contractors, plumbers, electricians, painters, and building maintenance firms. Your $15,000 painting job might include a 5-10% kickback to the manager. The contractor inflates the quote to cover the commission, and you pay the difference.

Supplier Commissions

Fire safety companies, lift maintenance providers, cleaning contractors, and even stationery suppliers sometimes pay commissions to strata managers who direct business their way. These get buried in operating costs and are virtually invisible to owners.

Related: Body Corporate Insurance Crisis: Why Premiums Doubled Since 2019 explores how commissions compound the insurance cost problem.

What Your State Is Doing About It

Every state has some form of disclosure requirement, but the strength of those rules (and whether they go beyond disclosure to an outright ban) varies significantly.

NSW: Insurance Commissions Banned

New South Wales became the first state to take serious action. From January 1, 2026, strata managers and committee members in NSW are banned from receiving insurance commissions under reforms led by Strata Community Association (SCA).

What this means in practice:

Strata managers can no longer receive commissions from insurance brokers or insurers
Premiums should drop 10-15% as the commission component is removed
Greater transparency around insurance procurement
Managers may increase management fees to offset lost commission income

The catch: some managers are quietly increasing their base management fees to compensate. So while your insurance premium drops $10,000, your management fee goes up $8,000. Watch for this. Compare your total costs (insurance + management fees) from 2025 to 2026. If your insurance premium didn't drop after January 2026, ask why.

Queensland: Dollar-Amount Disclosure Required

Queensland tightened its rules in March 2021 through updated BCCM regulation modules. Body corporate managers and caretaking service contractors must provide written disclosure of any commission, payment, or other benefit they're entitled to receive in connection with contracts the body corporate is considering, including insurance.

The key change: merely disclosing a percentage is no longer sufficient. Managers must state the actual monetary amount. This is a meaningful improvement, knowing your manager receives "$9,000" hits differently than "up to 15%."

Victoria: Disclosure Required, Ban Under Review

Victoria requires disclosure of commissions through the Owners Corporations Act 2006 and the SCA (VIC) Contract of Appointment, which mandates disclosure of any fees, commissions, or other benefits. SCA Victoria has also released a Strata Insurance Disclosure Best Practice Guide requiring members to disclose eight key financial items clearly.

Unlike NSW, Victoria has not banned insurance commissions. However, a legislative review announced in June 2025 is examining conflicts of interest and unfair contracts, commissions are squarely on the table. This may result in stricter rules in the near future.

Western Australia: Statutory Disclosure Since 2020

WA's Strata Titles Amendment Act 2018 (effective May 2020) introduced statutory disclosure requirements. Section 148 specifically requires disclosure of remuneration and other benefits, and section 146 addresses conflicts of interest. Strata managers must disclose in writing any monetary or other interest that may conflict with the strata company's interests before entering into a management contract.

The State Administrative Tribunal (SAT) can order a developer to repay any undisclosed commissions, giving the disclosure rules some real teeth.

South Australia: Tightened Disclosure

South Australia hasn't banned commissions outright, but recent reforms have tightened disclosure requirements significantly. Strata managers in SA must now disclose any financial benefits they receive from third parties connected to body corporate services.

The problem? Disclosure buried on page 47 of a management agreement isn't meaningful transparency. Many SA owners don't even know what to look for. And disclosure doesn't stop the practice, it just means the manager told you (somewhere) that they're taking a cut.

ACT, Tasmania, and Northern Territory

These jurisdictions rely on general fiduciary duties and contract law rather than strata-specific commission legislation. Disclosure obligations exist but are less prescriptive. Owners in these states should be especially proactive about asking the questions in the section below.

The Bottom Line

Only NSW has banned insurance commissions outright. Queensland and WA have the strongest disclosure requirements. Victoria may follow NSW's lead depending on the outcome of its current legislative review. Everywhere else, the burden falls largely on owners to ask the right questions.

Red Flags Your Manager Is Taking Commissions

Watch for these warning signs:

Only one insurance quote is presented. If your manager presents a single renewal quote without competitive alternatives, they may be steering business to the insurer that pays the highest commission.

The same contractors are always used. If every maintenance job goes to the same small group of contractors without competitive quoting, kickback arrangements may exist.

Reluctance to disclose financial relationships. If your manager gets defensive or evasive when asked about commissions, that tells you everything.

Costs seem inflated compared to market rates. If your insurance, cleaning, or maintenance costs are consistently above what similar buildings pay, commissions may be baked into the pricing.

No competitive tender process. Large contracts (painting, waterproofing, lift maintenance) should be competitively tendered. If your manager awards contracts without proper quoting, ask why.

Five Questions to Ask Your Strata Manager

Put these on the agenda at your next AGM or committee meeting:

"Do you receive any commissions, referral fees, or financial benefits from our insurance broker, insurer, or any contractor you engage on our behalf?" - They're legally required to disclose conflicts of interest in most states. A straight answer tells you a lot.
"Can you provide a written schedule of all third-party payments you receive in connection with our building?" - This forces specifics. Not "we may receive commissions" but actual dollar amounts.
"How many competitive quotes did you obtain for our insurance renewal?" - If the answer is one, you're not getting market rates.
"Will you agree to a fee-for-service model with no commissions?" - Some managers will. Their management fee may be slightly higher, but total costs (management + insurance + contractors) are often lower.
"Can you provide three references from buildings of similar size that we can contact?" - Transparency-focused managers welcome this. Those with something to hide will resist.

How Commissions Impact Your Fees

The financial impact is larger than most owners realise. For a typical 40-unit building:

Insurance commission (15% on $60,000 premium): $9,000/year - that's $225 per apartment
Contractor kickbacks (5% on $40,000 in annual maintenance): $2,000/year - $50 per apartment
Supplier commissions (various): $1,000-3,000/year - $25-75 per apartment

Total hidden cost: $300-350 per apartment, per year. Over a 10-year ownership period, that's $3,000-3,500 you've paid in commissions without knowing it.

For larger buildings with higher premiums, the numbers are significantly worse. A 150-unit high-rise paying $250,000 in insurance with a 20% commission is sending $50,000 per year to the strata manager, on top of management fees.

What You Can Do Right Now

Request full disclosure. Put it in writing. Ask your committee to formally request a complete schedule of all commissions and third-party payments.

Demand competitive quoting. Require at least three quotes for insurance and any contract over $5,000. This is basic governance that many buildings neglect.

Consider fee-for-service managers. A growing number of strata managers operate without commissions, charging a transparent fixed fee instead. Total costs are often lower.

Review your management agreement. Check the fine print for commission clauses. Many agreements explicitly authorise the manager to receive commissions, you may have signed away your right to object.

Benchmark your costs. Compare your insurance premiums, management fees, and maintenance costs against similar buildings. If you're consistently above average, commissions may be inflating your costs. Use our fee comparison tool to check.

Understanding body corporate costs:

Governance and management:

Compare body corporate fees across Australia at BodyCorporateFees.com.

This article is for informational purposes only and should not be considered legal or financial advice. Consult qualified legal and strata professionals for advice specific to your situation.