‘Ethically indefensible’: The kickbacks costing Victorian apartment owners thousands

Sydney Morning Herald

by Rachael Dexter

February 20, 2026

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‘Ethically indefensible’: The kickbacks costing Victorian apartment owners thousands

A recent investigation has revealed that strata managers in Victoria are legally receiving secret kickbacks of up to 20% from insurance companies, often at the expense of apartment owners. These hidden commissions contribute to skyrocketing insurance premiums, which can strain building budgets and leave residents footing higher costs. The practice, while legal, has been labeled "ethically indefensible" by experts, who argue it prioritizes manager profits over the interests of property owners. Strata managers are incentivized to recommend specific insurance providers, with some receiving significant financial incentives for doing so. This creates a conflict of interest, as managers may prioritize their own revenue over finding the most affordable or appropriate coverage for building residents. Mark Richards, a long-time strata owner, shared his frustration that few managers disclose these kickbacks, making it difficult for owners to hold them accountable. The issue has gained attention due to recent reports highlighting how these kickbacks disproportionately affect buildings with defects or deemed "risky." Owners in such properties often face higher premiums, which directly benefit strata managers. Despite a 2021 law requiring managers to disclose whether they receive commissions, many owners remain unaware of the practice. Surveys show that nearly 60% of Victorians don’t know if their manager is receiving kickbacks, and only 34% are certain they aren’t. Calls for reform have intensified, with experts like Dr Nicole Johnston urging the government to ban these hidden commissions. She warns that this systemic issue has persisted for decades and requires legislative action to restore transparency and professionalism in the industry. Advocates argue that while disclosure is a step toward accountability, it doesn’t address the inherent conflict of interest. The controversy raises broader concerns about corporate accountability and consumer protection, particularly as more Australians opt for strata living. With nearly one

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Originally published on Sydney Morning Herald on 2/20/2026