MEDIA RELEASE
The Real Estate Institute of Victoria (REIV) is seeking feedback from its members following the Victorian Government’s announcement to ban insurance commissions being paid to Owners Corporation managers.
The REIV supports policy designed to improve transparency and accountability across Victoria’s property industry, including in Owners Corporation management.
While clear transparency benefits of removing strata insurance commissions have been identified in the recent Thomson review, any changes must be implemented carefully, gradually and with industry consultation. Inadequate planning for the removal of a revenue source without due consideration of the flow-on impact on Victorians living in strata will only cause body corporate fees and rents to rise as Owners Corporation managers pass on costs to Owners Corporations.
In the Government's own response to this recommendation from the Thomson review, it can be quoted saying:
"A ban could potentially have strong market effects including an increase in the service fees OCs pay to professional managers and other market disruptions."
It can also be quoted saying:
"Further work and analysis will be undertaken to determine the impacts of imposing a ban on OC managers and other related entities from receiving financial benefits or other rewards from third parties."
The REIV urges the Government to consult with industry to ensure any planned changes achieve the desired transparency benefits without compromising the financial interests of property owners and renters.
Quotes attributable to REIV CEO Toby Balazs:
“Any potential changes to revenue sources for businesses must be considered and designed with adequate consultation.
“There are transparency benefits to the government’s proposal, but we’re concerned that if industry isn’t consulted on the details or rollout, it could lead to volatile fee changes and Victorians living in strata properties paying higher fees in a cost-of-living crisis.”
Quotes taken from page 19 of the Victorian Government response to the Thomson Review of the Owners Corporation Act.