Stuart found the ideal home - until he found out it was tainted

A stunning $4 million penthouse caught the eye of business consultant Stuart McLean at the weekend but when he looked into the apartment building further, he had second thoughts.

He discovered it was managed by Netstrata, the strata management company found, after an independent investigation, potentially to have charged excessive fees and not disclosed commissions and conflicts of interest. The company is contesting the allegations.

“I walked away when I found that out,” said McLean, 54. “However good the apartment, I felt it was tainted.”

His move comes at a time of unprecedented controversy within the strata industry in NSW, affecting an estimated 80,000 apartment owners.

As well as the explosive report on Netstrata, in a separate case, NSW Fair Trading placed a 10-year ban on strata manager Whitney Wang and stripped his company, PMSG, of its licence for allegedly failing to act with honesty, fairness and professionalism and accessing apartment buildings’ funds without approval.

Meanwhile, Fair Trading has suspended the licence of Result Strata and its head, Michael Lee, while Prestige Strata Management’s former licensee, Kylie Lane, was given an intensive corrections order for stealing more than $1.4 million from strata trust accounts.

Netstrata is contesting the breach allegations, and Wang has been allowed to continue trading before his appeal is heard at the NSW Civil and Administrative Tribunal (NCAT).

But McLean, who turned down the chance to live in a Netstrata-managed building and lives in a block in North Ryde that Wang was removed from, says the system has to change to protect apartment owners.

He says NCAT’s decision to allow Wang to continue trading is “very poorly balanced against the interests of something like 500 strata plans they have under management and perhaps 25,000 apartments.

“It’s ridiculous that Fair Trading can disqualify someone, and NCAT can reinstate them,” he said. “There should be more protection for schemes, enabling them to break strata contracts without penalty, giving NCAT the power to impose proper sanctions and speeding up the NCAT justice process. Owners are really getting hurt.

“And it’s very hard when you rely on strata managers for advice as the experts in the industry, and they’re not giving you advice in your best interests.”

A spokesman for NSW Fair Trading Minister Anoulack Chanthivong said it was important there was a review mechanism to ensure procedural fairness in regulatory matters.

“The potential expansion of NCAT powers are a matter for the attorney-general,” the spokesman said.

Wang and PSMG did not return this masthead’s calls, and Lee could not be contacted. Netstrata declined to speak to us but issued a statement:

“Netstrata contests potential breaches, including those relating to Section 102 of the Strata Schemes Management Act, on the basis that the interpretation applied by NSW Fair Trading is inconsistent with the statutory language, industry practice and commercial realities.

“In relation to the other findings being disputed and recommendations of the independent review, Netstrata will continue to engage NSW Fair Trading as part of ongoing efforts to provide Owners Corporations with high-quality services and the best outcomes.”

President Robert Anderson of Strata Community Association (SCA) NSW, the state’s peak body for the strata industry, declined to comment, but independent board member Natalie Fitzgerald, director of Genesis Strata Management, said the shake-up was “not a bad thing”.

“We’ll see higher standards come out of the Netstrata situation,” she said. “There are examples of poor behaviour in every industry; a few bad eggs. But the vast majority of strata managers work hard and have their clients’ best interests at heart.”

Independent strata advisor Mark Lever, founding chief executive of SCA nationally, which has engaged an external ethics company to strengthen the industry code of ethics, said a reality check was under way.

“The vast number of people in the industry, like the general public, have been appalled and upset by these examples,” he said.

“There’s now a real push for a clean-out of the industry and a reset, and the NSW government has made some changes to help rebuild trust.

“At a time of such an over-arching housing shortage, strata is going to do a lot of the heavy lifting, and people need to go into the new apartments that will be built with a lot more confidence.”

Chair Fred Tuckwell of the Owners Corporation Network (OCN) said people who live in strata were entitled to a better deal.

“This is a timely levelling of the industry,” he said. “The strata management industry needs to have more professionalism, but the bad players are making it harder for the good ones.

“So it’s excellent that bad players and bad behaviour are now being called out. Some have been charging massive hidden commissions and creating a level of mayhem in the industry, and it’s not fair to apartment owners.”