The managing director of prominent strata management company Netstrata, Stephen Brell, has stood aside as the president of the NSW industry peak body in the wake of an ABC investigation into the activities of his firm.
Late on Thursday, the Strata Community Association NSW confirmed it has launched an investigation after the ABC revealed a decade-long history of self-dealing and conflicts of interest at Netstrata.
The announcement came shortly after the company posted a public apology to its customers and revealed it will ask the NSW regulator to audit its business practices.
On Thursday morning, the ABC reported Netstrata has been using its wholly owned insurance arm to charge apartment owners insurance brokerage fees as high as three times the typical rate.
The company was also exposed for having taken kickbacks from contractors and suppliers it hires using the strata funds of more than 1,000 buildings, and 35,000 apartments, across NSW.
To the outrage of owners and advocates, it appears the company’s conduct has been permissible under NSW law.
On Facebook, Netstrata released an official statement addressing “the allegations made by the ABC which are of concern to Netstrata”.
“We take our relationships with our customers very seriously and understand that transparency is very important for our business and the sector,” it said.
“We do apologise to our customers that may be affected by any lack of transparency to date.
“We are undertaking an immediate audit to ensure that any concerns that remain for our customers are answered, and we will ask NSW Fair Trading to conduct a review of our practices.”
The chief executive of the Strata Community Association NSW, Craig Meagher, emailed its members late on Thursday to announce Mr Brell’s departure from his position as head of the industry.
“I wanted to write to you to acknowledge some media coverage on the ABC today following an interview conducted with Stephen Brell, managing director of Netstrata and NSW president of SCA.”
“Stephen Brell has contacted SCA this morning to advise that he will voluntarily step aside from his role as SCA’s NSW president.
“As with any allegations of behaviour that may or may not meet professional standards, SCA NSW will initiate its formal complaints management process. This established system is already in place and is a thorough and considered process that investigates complaints seriously and objectively.”
Mr Brell said his move from the position was not permanent.
“I have not stepped down,” he said.
“I have temporarily stepped aside to concentrate on Netstrata. I have not left the board nor have I been asked to step down or resign.”
Mr Meagher told the ABC: “Stephen Brell needs to focus on probably some of his business at the moment.”
“We just thought that’s probably something he would want to do.”
During an interview with 730, Mr Brell said some of his company’s practices, identified by the ABC, have “made me feel really awkward”.
“I’m going to go back and look at our practices and make sure we tidy them up,” Mr Brell said.
The ABC’s revelations form part of a new nation-wide investigation it has launched into the national strata management industry.
The investigation is calling on the Australian public — owners, industry insiders, regulators and others — to share their own strata stories with the ABC.
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