In early 2026, the NSW Productivity and Equality Commission delivered the report that may end commission-based strata management in New South Wales. Its conclusion: there is a strong case for restricting strata managers from accepting commissions, and moving the sector to fee-for-service remuneration could generate more than $300 million in net benefits for NSW over 15 years. The disclosure-first era — the approach committees have been living under since February 2025 — was judged not to have gone far enough on its own.
The review is the next step in a reform sequence that has been accelerating since 2024. The disclosure regime that commenced on 3 February 2025 forced strata managers to itemise insurance quotes and declare supplier relationships, backed by penalties of up to 500 penalty units for corporations. Further tranches through 2025 extended unfair contract term protections to owners corporation contracts, doubled reporting frequency, and gave NCAT power to end agent agreements for unlawful conduct.
But when the PEC consulted on whether disclosure had actually worked, the feedback was blunt: most parties did not believe disclosure requirements had substantially changed owners' awareness of how services were charged or what they included. Meanwhile the industry itself began moving — Strata Community Association NSW announced its members would begin phasing out insurance commissions, a shift some of the sector's largest firms publicly resisted. Against that backdrop, the Minister asked the PEC in June 2025 to examine the market impacts of prohibiting commissions outright. The Commission reported on 27 February 2026.
The Commission's analysis lands on three core problems with commission-based remuneration: commissions can create conflicts of interest, they make the true cost of management hard to understand, and they undermine trust between owners and managers. On the other side of the ledger, it found the risks of removing commissions were manageable — strata insurance is mandatory, fee-for-service models already operate widely in the market, and because commissions often flow to strata managers rather than brokers, brokers are likely to keep participating in the market without commission-based remuneration.
The headline number: moving the sector to fee-for-service could generate more than $300 million in net benefits for NSW over 15 years, through simpler pricing, sharper competition, better service quality and increased trust.
The narrowest intervention, targeting the largest and most contested commission stream — insurance. It aligns with the phase-out SCA NSW has already committed its members to, effectively writing an emerging industry practice into law.
A full legislative ban covering commissions and similar payments from all service providers — insurers, brokers, trades and other contractors — enforced by NSW Fair Trading with penalties for non-compliance. Brokers could still earn commissions on strata policies, but none of it could flow to the strata manager.
The furthest-reaching option, extending restrictions beyond managers to intermediaries such as strata insurance brokers — through regulated procurement processes and advocacy for federal policy change on broker commissions.
A structural compromise: the conflict created by percentage-of-premium remuneration — where the manager's income rises automatically with the scheme's insurance costs — is removed, while a regulated flat payment preserves a remuneration path for insurance-related work.
The report proposes a three-year transition period, allowing agency agreements and service contracts to roll onto non-commission terms as they naturally expire, rather than forcing a market-wide repricing overnight.
Use the disclosure rights that already exist. Since February 2025, insurance quotes must be itemised to show commissions, broker fees and ancillary costs, and managers must declare supplier relationships. If your renewal papers still show an all-in premium, that is a compliance issue — request the itemisation in writing.
Model your fee-for-service equivalent. Add up what your manager actually receives across base fees, additional charges and disclosed commissions. That all-in number is what a fee-for-service agreement will need to be negotiated against during any transition — and schemes that know it will negotiate from strength. Schemes that don't may simply see the commission reappear as a higher base fee.
Time your management agreement deliberately. With a three-year transition on the table and agreements converting as they expire, expiry dates become strategic. A committee renewing a three-year agreement today is choosing the terms it will hold through most of any transition window. Shorter terms preserve flexibility while the rules settle. For the mechanics of ending or not renewing an appointment, see our guide to changing strata managers in NSW.
Document procurement independently. Whichever option becomes law, the common thread across the entire reform program is verifiability — regulators, owners and tribunals increasingly expect a contemporaneous record of how suppliers were selected and what flowed to whom. Schemes with that record are ready for any of the four futures.
StrataTrade gives strata managers and committees a shared, auditable record of every job posted, every quote received from verified trades, and every recommendation made — transparent procurement by default, in exactly the direction NSW regulation is moving.
See how it worksNot yet, as a general rule. The Productivity and Equality Commission's report recommends restricting commissions and sets out four options, but the government's legislative response is still to come. What is already law is the disclosure regime that commenced in February 2025, and targeted restrictions — including that managers cannot take an insurance commission where they played no role in obtaining the cover. Industry change is also running ahead of legislation, with SCA NSW phasing out insurance commissions among its members.
The review found that commissions can create conflicts of interest, obscure costs and undermine trust, and that moving the sector to fee-for-service remuneration could simplify pricing, improve competition and service quality, and generate more than $300 million in net benefits for NSW over 15 years. It also found that disclosure alone had not substantially changed owners' understanding of what they were paying.
Option one: phase out insurance commissions for strata managers. Option two: prohibit strata managers from accepting any commissions. Option three: restrict commissions for third-party intermediaries such as strata insurance brokers. Option four: prohibit percentage-based commissions but permit a regulated flat fee.
Use the disclosure rights that already exist: require itemised insurance quotes showing every commission and fee, ask in writing what your manager receives from every supplier arrangement, and model what your management agreement would cost on a fee-for-service basis. Schemes that understand their true all-in cost now will negotiate from strength when agreements are rewritten during any transition.