Victoria government proposes ban on strata manager commissions

The Victorian Labor Government has announced plans to outlaw commissions and kickbacks paid to owners corporation managers. The proposed legislation aims to prevent financial incentives from influencing decisions regarding building insurance, repairs, and other services paid for through strata fees.

To enforce these new rules, the government intends to establish a dedicated Owners Corporations Taskforce within Consumer Affairs Victoria. The reform targets more than 500,000 strata-managed properties across the state, where one in five Victorians live or own property.

The Real Estate Institute of Victoria (REIV) has expressed concern regarding the potential economic impact of the ban. While supporting increased transparency, REIV CEO Toby Balazs warned that removing established revenue streams, such as insurance commissions, could lead management companies to recover costs by increasing direct management fees. This shift could ultimately result in higher costs for both property owners and renters.