Stage one — February 2025: disclosure became law
From 3 February 2025, the Strata Managing Agents Legislation Amendment Act 2024 imposed the strictest disclosure regime strata managing agents in Australia have faced. Strata managers must now disclose any connections with suppliers and developers, provide detailed breakdowns of insurance quotes including all commissions and broker fees, and promptly notify the owners corporation of new conflicts arising during their appointment — with penalties for breaches reaching up to $110,000 for corporations.
One genuine prohibition arrived with it: where the owners corporation sources and arranges its insurance independently, the strata manager is prohibited from receiving an insurance commission on it.
So as at February 2025: commissions were not banned — they were dragged into the light, and cut off entirely where the manager did none of the work.
Stage two — January 2026: the industry began phasing them out
From 1 January 2026, the Strata Community Association (NSW) — the peak body for strata managers — began phasing out the acceptance of insurance commissions by its members. New SCA (NSW) standard management contracts no longer include an option to accept insurance commissions, with the transition rolling through as old contracts are replaced, over a period of up to three years.
This is the change most people mean when they say "the ban." Two things about it matter:
- It is industry-led, not legislation. It binds SCA (NSW) members through their contracts, not every agent through the law.
- It is phased. Existing contracts run their course; the commission option disappears as agreements renew. A scheme mid-contract may still be on commission arrangements — disclosed ones — for some time yet.
Stage three — February 2026: the Commission recommended going further
In June 2025, the NSW Government asked the Productivity and Equality Commission to review the market impacts of prohibiting strata managing agents from accepting commissions and other conflicted remuneration. The Commission delivered its report on 27 February 2026, finding that moving the sector from a commission-based model to a fee-for-service model could simplify remuneration, improve competition and service quality, increase trust, and generate more than $300 million in net benefits for NSW over 15 years.
That report is an evidence base for a government decision — a legislated, sector-wide prohibition remains a live possibility rather than a current law. Watch this space; the direction of travel is unmistakable.
The catch: transparency is not the same as savings
Commissions were historically embedded in premiums — commonly somewhere between 10% and 20% of the annual insurance cost — without owners necessarily knowing they were there. As commissions come out, that revenue doesn't simply vanish from the manager's business model. The predictable adjustment is already visible: base management fees and service charges rising to replace commission income as contracts are rewritten.
That isn't necessarily improper — managers arranging insurance do real work, and being paid visibly for it is the entire point of the reform. But it means the test for any committee is the total cost, not the premium alone. If the premium fell after January 2026 and the management fee rose by a similar amount, the scheme's position changed less than the renewal letter suggests. Compare the whole picture, year on year.
What your committee should do at the next renewal
- Ask for the itemised breakdown the law already requires — premium, broker fee, and any commission, as separate visible line items. Since February 2025 this is a legal entitlement, not a request.
- Ask how many insurance quotes were obtained, and see them. Comparison is the point of the exercise.
- Ask how the manager is now remunerated for insurance work — commission under a legacy contract, a disclosed service fee, or within the base fee — and get it in writing.
- Compare total scheme costs across the transition — insurance plus management fees, this year against last — before concluding the reform saved the building money.
- Keep all of it. The disclosures, the quotes, the comparison and the decision belong in the scheme's records, because the questions ("why this insurer, what was the manager paid, what else was considered?") are exactly the ones owners and future committees ask years later.
That last habit is bigger than insurance. The entire NSW reform program has one theme: decisions made with the owners' money should be visible, comparable and on the record. StrataTrade applies the same principle to the scheme's maintenance procurement — every job scoped once, quotes returned in comparable form, and the quotes, recommendation and decision kept permanently against the building — so the standard the law now demands for insurance is simply how the building already runs everything else.
This article is general information about NSW strata law and reform developments, not legal or financial advice. The regulatory position has moved quickly through 2025–26 and may change further — confirm the current requirements before making decisions about insurance arrangements or management agreements.