Synopsis

This article examines Real Estate Services Council v Alliance Strata Management Ltd & Ors as an upstream anchor case within the GoStrata ARC. It shows how strata governance can become ineffective not through visible failure, but through structural misalignment of incentives that quietly disables decision-making before disputes emerge. Where incentives distort behaviour, accountability weakens, and information begins to fragment, governance may continue in form but not in function. The case illustrates how strata governance failure begins—long before courts are engaged—and provides the structural precondition for later cases where courts are forced to substitute for governance entirely. Litigation is not the beginning of strata governance failure, but its later-stage expression.

[a 6:75 minute read, with 1318 words]

Introduction — Long Before Courts Become Involved

Long before strata disputes reach the courts, something else has already happened.

What appears later as a dispute is often only the visible stage of a much earlier structural failure.

Governance has already begun to fail.

Not visibly.
Not dramatically.
And not in a way that immediately attracts attention.

But structurally.

As a result, Real Estate Services Council v Alliance Strata Management Ltd & Ors is best understood not as a dispute about particular conduct, but as a case study in how governance can be quietly disabled by the way systems are designed and incentivised.

There is no governance collapse here.
There is no judicial takeover.
There is no visible crisis.

Instead, there is something more subtle—and more important.

Governance exists in form, but not in function.

This case sits at an earlier stage of strata system failure—before disputes become visible, and before courts are engaged.

This was not a case of governance failing. It was a case of governance never fully functioning.

This is where the strata system failure begins.

Case Snapshot

Case
Real Estate Services Council v Alliance Strata Management Ltd & Ors [1994] NSWCA 258

Context
A dispute concerning strata management arrangements and remuneration structures operating within a functioning but structurally constrained governance system.

Key Facts
The case arose from attempts by the NSW property services regulator to cancel the licence of a strata manager, alleging inadequate disclosure of insurance commissions, breaches of fiduciary duties, and structural business arrangements involving delegation and fee-sharing with unlicensed parties.

Core Issue
Whether governance could function effectively where incentives and information asymmetries shaped decision-making behaviours.

Outcome
The Court addressed the legal issues arising from the arrangements, while leaving the underlying governance structure unchanged.

GoStrata ARC Relevance
For GoStrata’s ARC, the case illustrates how incentive structures can quietly disable governance long before failure becomes visible or disputes escalate.

What the Case Was Really About (Beyond the Orders)

On its face, the case concerned strata management practices, including remuneration structures involving insurance commissions and the operation of management arrangements within strata schemes.

But beneath the legal issues sat a deeper structural condition.

The system was functioning. Decisions were being made. Processes were being followed. Governance, in a formal sense, existed. And the schemes were not complaining.

Yet the conditions required for effective strata governance were already being weakened.

Incentives were shaping behaviour in ways that were not fully visible to those relying on the strata system. Information was unevenly distributed. Decision-making was influenced by structures that were not aligned with the interests of the collective.

The result was not immediate failure. It was gradual distortion.

This was not governance breaking down. It was governance quietly ceasing to operate as intended.

At this stage, strata governance still appears to function.

Incentives as Strata System Architecture

This case sits upstream of visible governance failure and speaks directly to the Incentive Alignment Doctrine.

In strata systems, incentives are not incidental. They are structural.

They define the conditions under which governance can—or cannot—function.

They determine:

• how decisions are made,

• what information is surfaced, and

• how participants behave within the strata system.

When incentives are misaligned, governance does not immediately collapse. It becomes distorted.

Decisions continue to occur.
Processes continue to operate.
But outcomes begin to diverge from the interests the system is supposed to serve.

At this stage, governance still appears to function.

But it is already being shaped by forces that prevent it from functioning effectively.

This is how governance becomes structurally disabled before it visibly fails.

This is where the conditions for later strata governance failure are set.

Strata Governance in Form, Not in Function

One of the defining features of early-stage system failure is that strata governance continues to exist in form.

Meetings are held.
Votes are taken.
Decisions are recorded.

From the outside, the system appears operational. But internally, something has shifted.

Decision-making is no longer driven by aligned incentives.
Information is no longer shared evenly.
Outcomes no longer reflect collective interests.

Governance is still present—but it cannot reliably produce decisions.

This distinction is critical.

Failure at this stage is not the absence of governance.
It is the presence of strata governance that no longer works.

The Emerging Accountability Gap

As incentives distort behaviour, accountability begins to weaken.

Responsibility becomes less clear.
Decision-making becomes harder to evaluate.
Outcomes become more difficult to attribute.

Accountability has not disappeared—but it is beginning to lose its ability to attach meaningfully to outcomes.

This is the early formation of the Accountability Gap Doctrine.

Participants may sense that something is wrong.
But the strata system does not provide a clear mechanism to identify, assess, or correct it.

This is how the accountability gap begins.

Information Failure Begins to Take Hold

Alongside incentive misalignment and emerging accountability gaps sits another critical development: information failure.

Information does not disappear. But it becomes uneven.

Some participants have access to more information than others.
Some information is emphasised.
Other information is obscured or difficult to interpret.

Information may still circulate—but it cannot circulate in a way that supports strata governance.

Without shared, trusted information, collective decision-making cannot function.

At this stage, the failure is not yet visible as collapse. It is visible only as inconsistency.

Why Strata Governance Has Not Yet Collapsed

At this stage, the strata system still appears stable.

Decisions are being made.
Disputes are contained.
The system continues to operate.

But this apparent stability is misleading.

Governance has not yet collapsed because the structural conditions for collapse are still developing.

Incentives are misaligned.
Accountability is weakening.
Information is fragmenting.

But the strata system has not yet reached the point where it can no longer produce decisions—or where the consequences become visible.

That comes later.

The Precondition to Governance Substitution

This case shows the stage before courts become involved.

It shows how strata governance becomes impaired long before it becomes impossible.

Once incentives distort behaviour, once accountability weakens, and once information begins to fragment, the system enters a trajectory.

At first, that trajectory is not visible. But it is directional.

If these conditions persist, governance will not correct itself. It will continue to degrade.

And eventually, the system will reach a point where internal decision-making can no longer function at all.

This is the stage that precedes strata governance substitution.

Conclusions — This Is How Strata Governance Failure Begins

This is how strata governance failure begins.

Quietly.
Structurally.
And often invisibly.

Not through misconduct. But through design.

Not through collapse. But through distortion.

At this stage, the strata system still appears to function.
But it is no longer capable of reliably producing outcomes in the interests it is meant to serve.

What follows is not correction, but accumulation.

Over time, these structural weaknesses compound.

What begins quietly here is what later becomes visible in litigation.

Earlier cases show how governance failure begins.
Later cases show what happens after it has taken hold.

April 14, 2026

Francesco Andreone

Resources

Judgment
Real Estate Services Council v Alliance Strata Management Ltd & Ors [1994] NSWCA 258

GoStrata’s CaseWatch Summary

Synopsis

This article examines the 2026 NSW Productivity and Equality Commission report on strata insurance commissions as a system-level development rather than a policy endpoint. It identifies four structural conditions confirmed by the report — incentive misalignment, ineffective disclosure, erosion of trust, and the concentration of effects at the individual owner level — and situates them within the broader strata system architecture. It argues that while the report advances the conversation, it operates within existing governance and decision-making constraints, leaving open the question of whether those structures are capable of producing improved system outcomes. The article positions the report as a transition point from policy debate to system analysis.

[a 7:75 minute read, with 1391 words]

Introduction

Australia’s strata title system has reached a further inflection point — one that is now being defined at the level of system design, not industry practice.

With the release of the March 2026 report by the NSW Productivity and Equality Commission, one of the strata sector’s most persistent and contested issues — insurance commissions and conflicted payments — has now been formally and independently examined at a whole-of-system level.

For over two decades, the insurance commission debate has oscillated between industry practice, disclosure requirements, and periodic calls for reform. That phase has now ended.

The question is no longer whether there is a problem.

The question is what, exactly, the problem is — and what follows from recognising it.

Strata systems operate as distributed decision-making systems governing capital allocation, risk, and shared infrastructure under conditions of constrained governance.

The report marks a shift in the conversation

The NSW Commission’s report does something important.

It moves the issue of strata insurance commissions out of:

• anecdote,

• isolated complaints, and

• industry self-regulation,

and into a structured, policy-level assessment of:

• incentives,

• information, and

• market outcomes.

In doing so, it reframes the issue from: “Are strata insurance commissions acceptable if disclosed?”

to: “What effects do strata insurance commissions have on how the strata system actually operates?”

That shift matters.

Because once the question is framed in terms of strata system behaviour, not just compliance, the scope of the issue and its consequences change.

This reframing positions strata not simply as a regulatory domain, but as a system whose outcomes are produced by the interaction of incentives, information, and decision-making structures.

What the report confirms

At a high level, the report establishes a set of propositions that are unlikely to be reversed.

Taken together, these findings describe not isolated issues, but a set of interacting system conditions that shape how decisions are made and outcomes are produced within strata schemes.

1. Incentives matter

The report recognises that strata insurance (and other) commissions and conflicted payments can create incentives for strata managers that are not aligned with the interests of owners.

This is not presented as a matter of individual misconduct, but as a feature of how insurance remuneration structures interact with strata scheme decision-making.

That distinction is significant as it moves the issue away from “good” or “bad” actors, and toward how the system shapes behaviour.

2. Transparency, as currently structured, is not resolving the problem

The report also acknowledges that, in practice, strata owners:

• struggle to understand commissions,

• cannot easily assess their impact on price or service quality, and

• face difficulty evaluating whether decisions are being made in their interests.

This is despite existing disclosure requirements and more recent NSW reforms.

The implication is structural.

Disclosure, as currently designed and applied, is not producing the outcomes it is intended to achieve.

3. Trust has been affected

The report links these dynamics to a broader issue of trust:

• between strata owners and strata managers, and

• in strata living more generally.

This is an important step.

Because once trust is identified as an outcome of strata system design, rather than simply behaviour, it becomes a policy concern, not just a fiduciary, contractual or relational one.

4. The effects are borne at the strata owner level, not just the scheme level

A further implication of the report is that the effects of commissions are experienced primarily by individual owners, rather than only at the level of the strata scheme as a legal entity.

The report’s findings on the limited comprehension of disclosures, difficulty assessing value, and erosion of trust all operate at the level of the individual participant.

While decisions are formally made collectively by strata schemes or by committees acting as their delegees, the report indicates these structures do not consistently function as fully informed, high-capacity decision-makers acting as principals.

This creates a structural gap between where decisions are made and where their consequences are felt, with strata owners effectively acting as the end consumers of outcomes they have limited ability to understand, evaluate or influence.

What the report is trying to do

It is equally important to understand what the report is — and is not — designed to do.

The report is a policy and economic assessment that:

• models the potential impacts of different, but limited, strata reform options,

• evaluates costs and benefits, and

• proposes a set of pathways for government action.

Those pathways range from:

• strata industry-led change,

• to banning insurance commissions for strata managers, and

• to broader restrictions across parts of the insurance supply chain.

The report’s objectives are framed in familiar regulatory terms:

• aligning incentives,

• improving transparency, and

• protecting consumers.

This is consistent with its institutional role and the terms of its brief.

As a result, the report evaluates outcomes within the existing strata governance and decision-making architecture, rather than questioning that architecture itself.

Where the report stops

For all its strengths, the report does not attempt to redesign the strata system within which these issues arise.

In particular, it does not:

• redefine how procurement decisions are made within strata schemes,

• address the capacity limitations of volunteer strata committees,

• restructure how strata information is generated, controlled, and presented,

• fully resolve conflicts across the broader strata supply chain, or

• move beyond disclosure as a central mechanism of control.

Instead, it operates within the existing strata system architecture and asks:

“How should this system be adjusted?”

rather than:

“Is this system, in its current form, capable of producing the outcomes expected of it?”

These boundaries are not neutral.

They shape the range of strata reforms that can be proposed and, in turn, the range of outcomes those reforms can realistically achieve.

Where underlying governance capacity, information flows, and decision structures remain unchanged, adjustments to incentives or disclosure are likely to be absorbed by the system rather than transform it.

This creates the conditions for partial reform rather than structural resolution.

Why this matters now

The report will shape the next phase of strata title reform in NSW and, possibly, elsewhere.

Government responses, industry positioning, and stakeholder advocacy will all draw on its findings.

But reports do not just influence policy. They influence how problems are understood.

And how a problem is understood determines:

• what solutions are considered,

• what trade-offs are accepted, and

• what remains outside the scope of reform.

At this stage, three things are now clear:

1. the existence of incentive misalignment in strata systems has been acknowledged.

2. disclosure, on its own, is not resolving the conflict of interest issue.

2. there is now a formal policy basis for intervention.

These conclusions establish the conditions for strata reform, but not yet the form it will take.

What is not yet clear is whether the structure that produces these outcomes will be addressed directly or whether strata title reform will proceed by adjusting elements within it.

The next step

The report has moved the strata conversation forward.

It has established that the issue is real, measurable, and consequential.

The next step is to understand why the strata system produces these outcomes in the first place, and what that implies for reform.

That requires looking beyond contracts, payments, disclosure mechanisms, and individual decisions to examining the interaction between:

• incentives,

• governance,

• information, and

• accountability within strata schemes.

This requires moving from policy evaluation to system analysis.

That is where the analysis now turns.

March 31, 2026

Francesco Andreone

Synopsis

This article establishes the methodological shift in GoStrata’s use of strata cases—from commentary to evidence.

It explains how strata cases will be analysed within the GoStrata ARC as observable system events, mapped against structural doctrines and used to build a cumulative evidence base about how strata governance actually operates. It also outlines the case selection framework, publication frequency, and the role of case analysis in linking strata title doctrine, system mapping, and reform.

[a 9:00 minute read, with 1608 words]

Introduction — From Commentary to Observation

For many years, GoStrata published strata title case analysis under the CaseWatch format.

Those CaseWatch articles followed a familiar and useful model. A decision would be identified, summarised, and explained. The focus was on what the tribunal or court decided, why it decided that way, and what the decision meant for strata practitioners and participants.

This reflected the standard approach to legal case commentary. Cases were treated as developments in the law that clarify principles, resolve uncertainty, and provide guidance for future conduct.

That work served a useful purpose. It improved understanding of strata law as a body of rules in accessible ways.

But it could not explain how the strata system operates, because it treated disputes as legal questions rather than system events.

The GoStrata ARC now adopts a different use of cases.

Strata cases are no longer treated primarily as commentary subjects. They are treated as evidence.

This shift forms part of the GoStrata ARC’s broader function as a structural atlas of the strata system—where doctrines define the terrain, and cases provide observable points within it.

The Limits of Strata Case Commentary

The CaseWatch model [like most legal commentary] focuses on outcomes:

• Who succeeded

• What rule was applied

• How the reasoning unfolded

• What practitioners should do differently

This produces clear and practical outputs. But it also imposes a constraint.

It treats each case as a discrete legal event.

In doing so, it abstracts the dispute from the system that produced it.

A strata case is rarely just a disagreement about legal rights. It is typically the endpoint of a longer sequence involving:

• decisions that were not made,

• information that was not shared,

• incentives that shaped behaviour, and

• governance structures that failed to resolve conflict.

By the time a matter reaches a tribunal or court, the internal mechanisms of the scheme have already been tested—and often found insufficient.

Case commentary captures the resolution of the dispute.

It does not explain the conditions that made the dispute both likely and repeatable.

Strata Cases as System Events

Within the GoStrata ARC, each strata case is treated as an observable event within a system operating at scale.

The strata system is not a collection of isolated disputes. It is a distributed governance system:

• hundreds of thousands of strata schemes,

• millions of residents, and

• continuous cycles of decisions about money, property, and shared infrastructure.

Within that system, disputes are not random. They arise from underlying structures.

Each case therefore provides a data point about:

• how decisions are made,

• how information flows,

• how financial arrangements influence outcomes, and

• how authority is exercised or constrained.

When viewed in this way, a strata case is not primarily a statement of law. It is a record of system behaviour under stress.

The judgment explains how the law resolved the issue.

The dispute reveals how the system produced it.

From Doctrine to Evidence

This introduces a structured way of interpreting these observations.

GoStrata doctrines — such as:

• Incentive Alignment

• Governance Substitution

• Accountability Gap

• Information Failure

• Capital Distortion

• Multiplicative Effects

provide analytical lenses for identifying recurring structural features of the strata system.

Cases are examined through those lenses.

A single case may illustrate:

• misaligned incentives in financial arrangements,

• decision-making structures that prevent timely action,

• information asymmetries between participants, and

• reliance on external adjudication to resolve internal governance failures.

The role of the case is not to define the doctrine. It is to evidence it.

In this context, evidence does not mean proof of legal rights. It means observable patterns of system behaviour — used to identify recurring failure modes, test doctrinal claims, and support system-level reform.

Over time, repeated observations across multiple cases allow those doctrines to be tested, refined, and connected.

Doctrine provides the framework.
Cases provide the evidence.

The GoStrata ARC Case Method

To support this shift, case analysis within the GoStrata ARC follows a consistent structure.

Each case is examined through a series of system-oriented questions:

Institutional Setting
What governance environment produced the dispute?

Structural Conditions
What were the relevant incentives, financial arrangements, and decision rules?

Information Architecture
Who knew what, and when? What information was incomplete, contested, or withheld?

Decision Mechanics
How were decisions made, deferred, or avoided?

System Failure
What internal mechanisms failed to resolve the issue?

Judicial Intervention
What role did the court or tribunal ultimately perform?

Structural Lessons
What does the case reveal about the design of the system?

This method shifts the emphasis from legal interpretation to system observation.

The court’s reasoning remains relevant. But it is no longer the centre of the analysis.

Courts and Tribunals as Emergency Governance Mechanisms

One pattern becomes visible quickly when cases are examined in this way.

Courts and tribunals frequently operate as substitute governance mechanisms.

They step in when:

• strata committees cannot coordinate decisions,

• voting structures prevent action,

• information is incomplete, contested, or withheld,

• conflicts of interest shape outcomes, and/or

• financial arrangements distort stakeholder incentives.

In these situations, litigation is not an anomaly. It is the system’s fall-back.

Courts and tribunals are asked to do what internal governance structures could not:

• interpret obligations,

• allocate responsibility,

• compel action, and

• resolve deadlock.

This is not primarily about misconduct. It is about design limits.

The ARC refers to this recurring phenomenon as Governance Substitution.

Cases therefore do more than resolve disputes. They show where governance has already failed.

Building an Evidence Base

The ARC does not treat cases as isolated examples. Its objective is to build a body of comparable observations.

Across multiple cases, patterns begin to emerge:

• recurring forms of decision failure,

• consistent information gaps,

• predictable incentive distortions, and

• repeated reliance on external adjudication.

These patterns support:

• refinement of doctrines,

• identification of structural failure modes,

• development of reform pathways, and

• construction of measurement frameworks.

In this sense, cases function as empirical inputs into a broader system map.

No single case is decisive.

But collectively, they provide a structured view of how the system behaves over time.

Case Selection and Anchor Cases

Not all cases contribute equally to this analysis.

The ARC prioritises cases that clearly reveal structural features of the system. These are referred to as Anchor Cases.

An Anchor Case typically:

• exposes a governance failure that required judicial intervention,

• illustrates one or more core doctrines,

• reveals underlying system design issues, and/or

• has broader applicability across strata schemes.

Anchor Cases are not selected for prominence, but for their ability to make the underlying strata system structure visible.

They form the backbone of GoStrata ARC case work.

Supporting cases are then used to reinforce or extend the observed patterns.

This selection approach differs from traditional legal reporting, which aims for coverage.

The ARC aims for explanatory power.

Publication Cadence

The shift from CaseWatch to ARC case analysis is also reflected in publishing cadence.

Rather than high-frequency commentary on individual decisions, the ARC will publish:

• one Anchor Case per quarter, analysed in depth, and

• one to two supporting case analyses between anchor cases.

This allows each case to be integrated into the broader ARC framework, rather than treated as a standalone update.

It also enables older cases to be revisited where they illuminate current system dynamics.

Linking Doctrine, Evidence and System Application

The GoStrata ARC operates across three analytical layers:

Doctrine
Defines the structural concepts.

Case Evidence
Demonstrates how those concepts appear in practice.

System Mapping
Uses those observations to identify patterns and structural dynamics across the system.

Together, these layers support downstream application in advisory work, measurement frameworks, and reform initiatives.

Cases are the bridge between theory and application.

They ground doctrines in observable reality.

They show that the issues identified are not hypothetical. They are recurring features of the system as it currently operates.

What Follows

This article marks the transition from the CaseWatch model to ARC case work.

The next phase of publication will focus on structured case analysis across areas such as:

• developer-controlled governance,

• financial and levy structures,

• insurance and procurement arrangements,

• building defects and maintenance obligations,

• information access and record-keeping, and

• decision-making and voting systems.

Each case will be used to examine how the system functions under real conditions.

Conclusions — Seeing the System

Strata has evolved into a large-scale civic and economic system.

Its performance affects:

• housing outcomes,

• asset values,

• financial exposure, and

• social cohesion within buildings and communities.

Understanding that system requires more than legal interpretation. It requires observation.

Cases are one of the few places where the system becomes visible. They capture moments where internal mechanisms fail, external intervention occurs, and the underlying structure is exposed.

Each case is not just a dispute. It is a point at which the design of the strata system becomes observable.

The ARC treats those observations as evidence.

And over time, that evidence is assembled into a structural map of the system itself.

March 24, 2026

Francesco Andreone

Synopsis

Strata frequently invokes the language of “good governance.” Yet much of what carries that label is procedural rather than structural.

This article examines the institutional mechanics of strata governance, distinguishing governance from administration, participation from influence, and compliance from accountability. It argues that governance is not a virtue but rather a system mechanism and that without structural alignment of authority, incentives and consequences, “good governance” remains aesthetic rather than functional in strata systems.

[a 7:25 minute read, with 1320 words]

Introduction

“Good governance” is one of the most frequently invoked phrases in strata titles.

It appears in conference themes.
It anchors industry panels.
It headlines training programs.
It shapes policy submissions.

But here is the uncomfortable question:

What if most of what strata title calls “good governance” is not governance at all?

What if it is procedure without power?
What if it is structure without discipline?

Understanding that distinction is part of a broader effort to map the structural mechanics of how strata systems actually govern.

Because governance is not a slogan.
It is not a code of conduct.
It is not attendance at meetings.

Governance is the structured capacity to:

• direct,

• discipline, and

• replace.

In functioning systems, governance performs a deeper role: it enables the system to correct itself when incentives drift away from collective interests.

When governance architecture is weak, distortions are not corrected. They accumulate.

In many strata schemes, that capacity does not sit where the rhetoric suggests it does.

Governance Is Not Administration

Strata systems are operationally complex.

They require contractors, professionals, financial management, insurance arrangements, maintenance coordination and compliance reporting.

Over time, operational necessity has blurred into governance assumption.

Administration expanded.
Compliance dominated.
Governance contracted.

The industry often describes this shift as “professionalisation.”

But professionalisation of service delivery and compliance is not the same as preservation of owner authority.

Governance asks:

Who decides?
Who bears risk?
Who can intervene?
Who can replace?
Who can refuse?

Administration and compliance ask:

Who processes?
Who circulates?
Who files?
Who arranges?
Who reports?

The strata system increasingly confuses them.

When administration and compliance replace governance, control migrates quietly away from owners — not through misconduct, but through structure.

Procedure Is Not Power

Strata schemes often appear busy.

Agendas circulate.
Minutes are posted.
Motions are passed.
Budgets are adopted.
Audits are tabled.
Reports are prepared.
Returns are filed.

On paper, this looks like governance.

Governance, however, is not the presence of process. It is the capacity to shape direction and discipline performance.

A meeting that ratifies decisions already embedded in operational structure is not governance.

A budget presented without genuine alternatives is not governance.

Information that explains a single pathway without illuminating trade-offs is not governance.

Procedure can coexist with powerlessness. In fact, it can legitimise it.

Engagement Without Leverage Is Illusion

Reform conversations often focus on engagement:

• encouraging meeting attendance,

• improving committee education,

• simplifying voting systems,

• mandating electronic records, and

• increasing participation rates.

Participation matters. But participation without leverage alters little.

If owners:

• cannot meaningfully alter payment structures,

• cannot access comparable performance data,

• cannot rebalance delegation frameworks, and

• cannot clearly see capital exposure,

then attendance becomes symbolic.

You can attend every meeting and still have no governance power.

Because governance is not presence. It is influence backed by consequence.

Delegation Without Counterweight

Modern strata systems depend on delegation. Scale demands it.

But governance depends on counterweight.

In many schemes:

• managers prepare agendas,

• recommend suppliers,

• manage cashflows,

• coordinate information, and

• interpret compliance.

Committees review and approve. But review and approval without independent infrastructure is fragile.

If the system does not structurally support:

• performance comparison,

• contract discipline,

• financial clarity, and

• alternative pathways,

then delegation becomes gravity.

Control drifts — not because anyone intends it to, but because the architecture permits it.

“Good governance” language rarely acknowledges this drift. It praises cooperation and emphasises harmony while avoiding structural confrontation.

Structural friction often preserves balance.

Transparency Without Intelligibility

Strata prides itself on transparency.

Documents are available.
Records can be inspected.
Financial statements are issued.

But transparency is not governance.

Governance requires intelligibility.

If information is:

• technically compliant but strategically opaque,

• available but unsynthesised,

• voluminous but directionless,

• out of date, and/or

• disclosed but not comparable,

it does not empower. It overwhelms.

Information that cannot be converted into decision advantage is not governance.

Overwhelmed owners do not govern. They defer.

And, repeated deferral becomes structural disengagement.

Compliance Is Not Accountability

Compliance frameworks dominate reform cycles with:

• disclosure forms,

• conflict registers,

• continuing professional education, and

• code acknowledgements.

All useful.

But compliance and disclosure do not equal accountability. Accountability requires consequence.

If underperformance or failure does not:

• affect remuneration,

• affect renewal,

• affect commercial positioning, and

• affect influence,

then accountability is symbolic.

Governance without consequence is advisory. Advisory systems are not self-correcting.

Systems built on goodwill eventually rely on inertia.

The Comfort of “Good Governance”

The language of “good governance” is comforting.

It allows agreement in principle.
It avoids naming structural imbalances.
It suggests incremental improvement rather than redesign.
It preserves relationships.

But systems do not self-correct through sentiment. They correct through structural alignment.

If the underlying system architecture:

• rewards stability over scrutiny,

• rewards embedded relationships over contestability,

• rewards complexity over clarity, and/or

• rewards inertia over performance,

then rhetoric will not reverse outcomes.

Because behaviour follows structure.

What Governance Actually Requires

If governance is to mean anything in strata, it requires architecture that produces discipline — not aspiration.

At minimum, there must be:

Control over capital flows
Owners must be able to see and influence how collective funds move — not merely approve summaries.

Alignment between performance and payment
Services must be capable of being rewarded, disciplined or replaced in proportion to outcomes.

Visibility of risk exposure
Owners must understand contingent liabilities and future obligations, not just current balances.

Contestability of service providers
Embedded relationships must be structurally challengeable, not practically untouchable.

Decision-support rather than decision-steering
Information must illuminate needs, alternatives and trade-offs, not frame inevitabilities.

Clear counterweights to delegation
Administrative scale must not swallow governance authority.

Without these, “good governance” remains aesthetic.

It looks responsible.
It feels responsible.
It reassures participants.

It does not rebalance power or improve outcomes.

Why This Matters Now

Strata is no longer niche. It is a dominant form of urban property holding.

Millions rely on strata governance to protect homes, steward capital, and manage collective risk.

When governance becomes procedural rather than structural, the cost compounds over time.

Because strata systems are long-lived, distortions do not dissipate. They entrench.

Future owners inherit architecture they did not design.

“Good governance” language cannot carry that weight. Structural alignment must.

The Real Test

The test of governance in any institutional system is simple:

Can the system correct itself when incentives misalign?

In strata systems, that question reveals whether governance is structural or merely procedural.

If incentives misalign tomorrow, does the system self-correct — or normalise the distortion?

If underperformance occurs, does the system discipline it — or absorb it?

If owners disengage, does the structure draw them back — or operate around them?

Governance is not a virtue. It is a mechanism.

And mechanisms either align behaviour with collective interest — or they do not.

Governance Architecture

Strata systems do not primarily need better governance rhetoric.

They require governance architecture.

Systems designed in this way also become observable: their governance quality can be assessed through the presence, absence and interaction of the structural mechanisms described above.

Unless authority, risk and consequence are structurally aligned with owner interests, “good governance” will remain a well-meaning phrase describing systems that cannot reliably correct themselves.

This is not a moral failure. It is a design reality.

And design can be changed.

March 18, 2026

Francesco Andreone

The GoStrata Governance Doctrines

Some of GoStrata’s work develops and applies analytical doctrines relating to the design and operation of strata systems.

These doctrines address recurring structural conditions that shape behaviour, decision-making, capital flows, and accountability within strata title environments.

They are not commentary.
They are analytical reference points.

Doctrinal development within GoStrata is deliberate, selective, and cumulative. Each doctrine is versioned and refined over time. Doctrines are published when sufficiently stable. They are not maintained as a running series or reactive commentary stream.

Applied writing, case analysis, and reform commentary may reference these doctrines, but do not replace them.

Why strata systems fail is often explained in terms of behaviour

Bad actors.
Weak ethics.
Poor professionalism.

But across jurisdictions and decades the same outcomes appear, even when participants act in good faith.

That suggests a different explanation.

Over time GoStrata has been developing a set of analytical doctrines to examine the structural design of strata systems — how incentives, authority, capital flows and information shape outcomes.

The first of these doctrines has now been published:

Doctrine #01: Incentive Alignment

It explains why systems that rely on ethics or disclosure alone often continue to produce poor results.

The doctrine is intended as a reference point for future analysis rather than commentary on specific disputes.

You can read about GoStrata Doctrines and Incentive Alignment here.

Further doctrines examining governance, capital, accountability and information will follow over the coming year.

March 01, 2026

Francesco Andreone

Synopsis

For years, explanations of strata failure have centred on behaviour — unethical managers, disengaged committees, insufficient disclosure, or weak professionalism. But across jurisdictions and reform cycles, similar distortions continue to emerge regardless of personalities or regulatory adjustments.

This article argues that the problem is not primarily moral. It is structural.

Drawing on the GoStrata Incentive Alignment Doctrine, this article reframes strata system failure as a predictable outcome of misaligned incentives embedded in legal, financial, and governance design. When incentives reward stability over scrutiny, delegation over accountability, and complexity over clarity, poor outcomes are not surprising — they are expected.

Understanding this shift from ethics to incentives is the necessary starting point for meaningful strata reform.

[a 4:75 minute read, with 973 words]

Introduction

Most debates about strata system failure begin in the wrong place.

They focus on behaviour — bad actors, poor professionalism, weak ethics, inadequate disclosure. The implied assumption is simple: if participants behaved better, outcomes would improve.

Across jurisdictions, markets, and reform cycles, the pattern is consistent.

Strata title systems repeatedly produce distorted outcomes not because participants are uniquely unethical or incompetent, but because the system’s incentives are misaligned with the interests of the people it is supposed to serve.

This is not occasional failure.
It is recurring.
And it is structural.

The Recurring Pattern

Across strata buildings and regulatory regimes, the same features appear:

• Owners bear the financial risk.

• Decision-making authority is widely delegated.

• Information flows are intermediated.

• Payments are structured in advance or indirectly.

• Accountability is diffuse and delayed.

These features are not accidental. They are embedded in the legal, financial, and governance architecture of strata systems.

In that environment, even well-intentioned participants are rewarded for behaviour that does not align with strata owners’ long-term interests.

No bad actors are required.
Rational behaviour alone is sufficient.

Why Ethics Is the Wrong Explanatory Lens

Ethics-based explanations dominate strata commentary because they are intuitive.

When strata owners pay too much, committees lose control, managers act unilaterally, or strata suppliers appear entrenched, it feels as though someone must be acting improperly.

But ethics is a weak tool for explaining systemic failure.

Ethics asks individuals to restrain themselves in environments where the structure quietly rewards the opposite. Over time, structure prevails.

A system that requires exceptional integrity to function acceptably is already failing.

Strata does not primarily suffer from a shortage of decent people.
It suffers from incentive structures that do not consistently align with strata owner interests.

Why Disclosure Doesn’t Solve the Problem

Disclosure regimes are frequently proposed as the corrective measures. But they rarely change outcomes.

Disclosure assumes:

• informed participants,

• meaningful choice, and

• the ability to act against entrenched commercial arrangements.

In the strata system, those assumptions are often fragile.

Disclosure adds information without redistributing power, altering cashflows, or rebalancing risk. It does not change who controls contracts, who sets agendas, or who frames information.

As a result, the structural dynamics remain intact.

This is why repeated strata reform cycles produce more paperwork, more reporting, and more documentation — yet similar patterns continue to re-emerge.

Each reform layer treats strata symptoms while preserving the incentive architecture that produced them.

Incentives Explain What Behaviour Cannot

Incentives determine, in practice:

• who gets paid, when, and by whom,

• who sets agendas and controls information,

• who bears consequences when decisions fail,

• who benefits from complexity, and

• who absorbs risk when things go wrong.

Once these elements are mapped, behaviour becomes predictable.

Participants do not need to be malicious to produce harmful outcomes. They only need to respond rationally to the incentives placed in front of them.

When incentives reward stability over scrutiny, delegation over oversight, and complexity over clarity, the strata system will drift in that direction.

That drift is not moral; it is mechanical.

The Cost of Misdiagnosis

Treating strata failure as primarily behavioural produces familiar responses:

• more regulation,

• more disclosure,

• more training,

• more codes of conduct, and

• more “education”.

Each addition increases process without materially changing structure.

The result is what GoStrata describes in the Compliance Theatre Doctrine — activity that signals responsibility without redistributing power, risk, or accountability.

Compliance can coexist with distortion.
Procedure can coexist with misalignment.

Without structural realignment, reform accumulates documentation rather than discipline.

The Design Question That Matters

The relevant question for strata systems is not whether participants are behaving ethically.

It is whether the strata system:

• rewards outcomes aligned with owners’ interests, and

• penalises outcomes that are not.

Until incentives are realigned, strata systems will continue to produce predictable distortions — politely, legally, and repeatedly — regardless of how many reforms are layered on top.

This is not a moral conclusion.
It is a structural one.

Systems produce what they are designed to produce.

Incentive Alignment Doctrine

The GoStrata Incentive Alignment Doctrine (Version 1.0) formalises this structural analysis.

The Doctrine begins from a foundational premise:

Strata systems fail not because of widespread unethical behaviour, but because incentive structures embedded in legal, financial, and governance design are misaligned with strata owner interests.

Version 1.0 maps how:

• payment structures influence discipline,

• delegation frameworks reshape control,

• pooled capital distorts accountability,

• information asymmetries shape decisions, and

• governance rituals can replace governance substance.

Rather than focusing on blame, the Incentive Alignment Doctrine focuses on design — because incentives predict behaviour more reliably than ethics statements.

This article is its first applied GoStrata ARC exploration.

Further GoStrata publications will examine how the doctrine operates in practice and how incentive alignment can be operationalised at the strata scheme level without waiting for legislative reform.

March 03, 2026

Francesco Andreone

Synopsis

This article explains the purpose and structure of the GoStrata Governance Doctrines — what they are, how they will be published and tested, and why structural explanation must precede structural reform in multi-owned property systems.

[a 7:00 minute read, with 1266 words]

Introduction

The strata sector generates constant activity.

There are defect disputes, levy debates, insurance controversies, maintenance failures, by-law conflicts, regulatory reviews and reform proposals. Issues are analysed, argued and responded to in real time.

What is often missing is a coherent structural vocabulary.

Problems are typically treated as isolated events — a defect here, a commission payment there, a quorum failure somewhere else. Each issue is debated within its own lane, with its own actors and proposed fixes.

Yet many of these events share common structural conditions.

They are not random. They are patterned. Those patterns require structural visibility.

The GoStrata Governance Doctrines are an attempt to describe those patterns.

They are not political positions.
They are not industry attacks.
They are not legislative reform packages.
They are not consulting products.

They are structural explanations.

Over time, these doctrines will be published in formal, versioned form as part of the GoStrata ARC. This article explains what they are, why they exist, how they will be used, and why they matter.

What the GoStrata Doctrines Are

A doctrine, in the GoStrata sense, is a recurring structural condition observed within multi-owned property systems.

It is not a slogan.
It is not a campaign.
It is not an imported theory imposed on practice.

It is an explanatory lens.

The current primary doctrine topics include:

• Incentive Alignment

• Accountability Gap

• Capital Distortion

• Information Failure

• Governance Substitution

• Multiplicative Effects

Each describes a repeated structural pattern visible across contracts, financial arrangements, regulatory design and decision-making processes.

These doctrines are not mutually exclusive. They overlap. They interact. They compound. They are also not fixed.

Each doctrine will be published as a versioned document [Issue 1.0, 1.1 and beyond] and refined as evidence accumulates and critique is absorbed.

The purpose is not to declare final truths.

The purpose is to describe the system accurately enough that better decisions become possible.

Why the Doctrines Emerged

The GoStrata doctrines did not begin as a formal project.

They emerged gradually across case analysis, advisory work, contract review, financial assessment and governance disputes. Certain structural patterns repeated — across buildings, managers, insurers and jurisdictions.

The personalities changed.
The building types changed.
The language changed.

The structural conditions did not.

Incentives were frequently misaligned.
Accountability was often diffused.
Information was regularly asymmetrical.
Financial flows shaped decision-making in ways not always visible to participants.
Small governance errors multiplied across time and scale.

The doctrines represent a shift from commentary to mapping.

Rather than reacting to each controversy as an isolated event, the doctines attempt to identify the architecture that produces recurring outcomes.

They do not assume bad faith.
They do not rely on moral critique.

They focus on structure — because structure outlives actors.

What Purpose They Serve

The GoStrata doctrines serve five practical functions.

1. A Shared Vocabulary

Participants in strata systems — owners, residents, committees, managers, regulators — often describe the same structural condition in different language.

Doctrines provide shared terminology for recurring patterns. When a contract embeds misaligned incentives, that condition can be named. When a financial mechanism shifts risk without visibility, it can be described precisely.

Naming structure reduces noise.

2. Structural Diagnosis

Rather than asking “who is at fault?”, doctrines allow the question: “what structural condition is operating?”

This reframes analysis from personality and criticism to design.

3. Evidence Anchoring

Each doctrine is reality tested against strata outputs like:

• Tribunal and court decisions

• Contractual architecture

• Financial flows

• Regulatory instruments

Evidence does not create doctrine. It tests it.

Where evidence contradicts a doctrine, the doctrine evolves. Versioning ensures that refinement is transparent.

4. Governance Framework Design

The doctrines inform the development of governance tools and frameworks — including structured diagnostic instruments, advisory methodologies and, in time, measurement systems.

Measurement without doctrine produces noise.
Doctrine without measurement produces abstraction.

The two must converge.

5. Long-Cycle Reform

Quick strata reforms often target symptoms rather than structure.

Doctrines encourage long-cycle adjustments that align incentives, clarify accountability, improve transparency and reduce compounding error across the life of strata schemes.

They are slow architecture for long-lived systems.

How Strata Citizens Will Encounter the Doctrines

The doctrines will not appear all at once. They will emerge through repeated application.

They will be encountered through:

• GoStrata articles.

• Case analyses.

• Governance frameworks accompanying analytical writing.

• Visual diagrams explaining structural flows.

• Advisory memoranda.

• Journal volumes preserving doctrine evolution.

They will also appear in applied settings like contract typology reviews, governance diagnostics, financial structure assessments and law reform submissions.

Over time, the doctrinal language becomes familiar not because it is announced loudly, but because it proves useful repeatedly.

Where the Doctrines Will Be Found

The doctrines will be published in structured form:

Settled Doctrines (Issue 1.0 and beyond) — formal, versioned publications hosted on the GoStrata website.

Concept Doctrines (Issue 0.1) — exploratory papers where structural observations are still developing.

Applied Articles — writings demonstrating doctrine in context.

Journal Editions — curated collections preserving evolution.

Diagram Assets — visual summaries for clarity and accessibility.

They will be public.
They will be citable.
They will be versioned.

The objective is institutional memory for the strata system, not rhetorical impact.

How Evidence Will Be Used

Evidence plays a specific role.

It does not create doctrine.
It tests doctrine.

Three primary evidence streams are central.

A. Case Evidence

Tribunal and court decisions provide structured reasoning about statutory interpretation, duty scope, governance authority and contractual enforceability.

These decisions reveal how the legal system interprets structural strata conditions.

B. Contract Evidence

Building management statements, by-laws, management agreements, brokerage structures and consultancy contracts reveal incentive design.

Contract architecture frequently explains behaviour more clearly than commentary.

C. Financial Evidence

Budgets, cashflow structures, levy mechanisms, borrowing models, commission arrangements and fund allocation rules reveal where capital flows influence governance.

Financial architecture often shapes behaviour before strata governance actors are even aware of it.

Where financial flows are opaque, governance risk increases.
Where financial exposure is misunderstood, capital distortion follows.

Evidence does not guarantee correctness. But without evidence, doctrine becomes abstraction.

The approach is iterative:

Observe → Articulate → Test → Refine → Republish

Why This Matters

The strata system operates at significant scale — tens of thousands of schemes and millions of participants making recurring decisions each year.

Each committee resolution.
Each owner vote.
Each levy determination.
Each insurance renewal.
Each contract execution.

These decisions repeat and compound.

When structural conditions are misdiagnosed, errors multiply.
When incentives are misaligned, distortions persist.
When information is incomplete, accountability weakens.

Small structural flaws can produce system-wide effects over time.

The GoStrata Multiplicative Effects Doctrine captures this dynamic: repeated minor governance errors can compound across scale and duration.

The doctrines matter because they aim to reduce structural strata error before it multiplies.

They do not promise strata perfection. Rather, they aim for improved alignment between structure and outcome.

A Stake in the Ground

The publication of the Governance Doctrines marks a shift by GoStrata.

From commentary to architecture.
From reaction to mapping.
From isolated critique to structural explanation.

The doctrines will be published formally, versioned carefully and applied consistently.

They are not final answers.
They are working maps of the strata system.

If the map is clearer, decisions improve.

And if decisions improve, the strata system strengthens — not through noise, but through structure.

The first formal doctrine publication will follow.

February 25, 2026

Francesco Andreone

Synopsis

This article revisits Real Estate Services Council v Alliance Strata Management Ltd not as a historical curiosity, but as an early structural inflection point in Australian strata governance.

The 1994 decision confirmed the fiduciary obligations of strata managers and clarified the strict conditions under which insurance commissions may be retained. More significantly, it revealed a tension at the heart of the strata title system: that remuneration structures capable of distorting advice were known, understood, and legally articulated decades ago.

The regulatory responses that followed prioritised disclosure over structural realignment. As the strata sector scaled and capital flows expanded, those preserved incentive settings shaped market behaviour in predictable ways.

The Alliance case, therefore, matters not because it exposed misconduct, but because it illuminates a design trajectory — one that continues to influence insurance commissions, procurement practices, and governance accountability in strata today.

[a 6:00 minute read, with 1388 words]

This Pattern Is Not New

The conflicts at the heart of today’s strata system are often described as modern problems.

Insurance commissions.
Conflicted remuneration.
Professional managers paid in ways that quietly distort advice, procurement, and outcomes.

They are framed as recent scandals — the result of market excess, insufficient disclosure, or a failure of professional ethics in an otherwise sound system.

That narrative is institutionally convenient. It is structurally incomplete.

The Australian strata system was warned about these problems more than thirty years ago. Not in theory. Not by academics. But by the Courts, in the early years of modern strata management.

The NSW Supreme Court and Court of Appeal decisions in Real Estate Services Council v Alliance Strata Management Ltd are not important because of what the Court ultimately decided. They are important because of what the cases revealed — and what the strata regulatory trajectory that followed preserved.

This was an early warning case.
The warning was clear.
The subsequent regulatory settings did not structurally realign the incentives identified.

What we’re seeing today is not a sudden collapse of ethics or professionalism. It is the long, predictable consequence of leaving remuneration structures intact while the system scaled, consolidated, and financialised around them.

What the Case Exposed — Even Then

The Alliance Case sits at an early point in the modern strata economy.

This was before national strata business roll-ups.
Before vertically integrated management service models.
Before insurance commissions became systemically embedded revenue lines.
Before procurement pipelines and preferred supplier ecosystems hardened into industry norms.

And yet, even at that stage, the Court was confronted with familiar features:

• remuneration structures that created inherent conflicts of interest,

• information asymmetries between professionals and the clients they served, and

• a regulatory environment that relied heavily on disclosure rather than structural realignment.

The core tension was visible even then: professionals charged with advising strata clients were being paid in ways that could — and did — influence the advice given.

The Court did not characterise the conduct as systemic failure. It applied established fiduciary principles to specific contractual arrangements. But the structural tension was visible and easily legible.

What matters is not simply that the Court identified the conflict.
What matters is how the strata system evolved around it.

Incentive Alignment — Identified at the Foundation

This case belongs at the base of what the GoStrata describes as the Incentive Alignment Doctrine.

The Alliance Case demonstrates an enduring structural principle: when professionals and others are rewarded for behaviours that diverge from client outcomes, the system will behave rationally — but not necessarily in the way clients expect.

When remuneration structures:

• reward volume over suitability,

• reward placement over quality,

• reward fewer suppliers over options, or

• reward opacity over clarity,

the result does not require misconduct. It reflects incentive-consistent behaviour.

Misalignment does not require dishonesty. It requires structure.

The strata manager in the Alliance Case did not need to be unethical to act in ways that favoured certain outcomes. The manager’s remuneration architecture shaped behaviour.

The Court recognised the fiduciary tension and articulated the legal constraints clearly.

What followed was a regulatory trajectory that preserved disclosure-based responses rather than structural separation.

Disclosure Without Structural Realignment

The regulatory posture that emerged in the wake of cases like the Alliance Case was familiar, and remains so today:

Identify the conflict.
Disclose the conflict.
Assume the market will adjust.

But disclosure does not realign incentives.
It documents them.

By privileging disclosure as the primary mechanism of control, strata regulatory settings effectively accepted the presence of conflicted remuneration, provided it was sufficiently described.

That approach has shaped decades of strata regulation and operations.

Instead of asking whether remuneration structures should exist at all, regulators asked whether they were sufficiently disclosed.
Instead of restructuring incentives, regulatory settings expanded disclosure architecture.

The result was procedural containment rather than structural redesign.

Professionalisation Without Accountability

One of the quieter legacies of the Alliance Case is the reinforcement of a narrative: that professionalism itself would mitigate conflicts.

Licensing regimes expanded.
Education requirements increased.
Codes of conduct multiplied.

Strata management became more professional in form.

But professionalism, without structural accountability, does not neutralise incentives. It may instead render them more complex and opaque.

As the strata sector professionalised:

• remuneration structures grew more layered,

• information asymmetries deepened, and

• owners became increasingly reliant on intermediaries to interpret contracts and risk.

This contributed to what GoStrata describes as the Information Failure Doctrine: the expansion of disclosure without commensurate improvement in comprehension or bargaining symmetry.

The case also reflects an early form of governance substitution — where informational dominance by the manager or supplier limits the practical capacity of owners to exercise meaningful oversight.

The conflicts did not disappear. They became embedded.

Capital Distortion — Following the Money

The deeper lesson of the Alliance Case is not behavioural. It is financial.

Systems do not distort because individuals are necessarily unethical.
They distort because capital flows create predictable pressures.

When revenue streams are tied to insurance placement, procurement volume, or opaque service arrangements:

• advice bends toward revenue,

• market consolidation follows those flows, and

• outcomes skew — even where fiduciary language remains intact.

This is GoStrata’s Capital Distortion Doctrine in practice.

These distortions did not require a breach of duties.

They only required that remuneration structures remain intact while scale increased.

The Accountability Gap

The Court clarified the fiduciary principles.
Disclosure requirements evolved.
Professional standards expanded.

But accountability for incentive-driven and conflicted outcomes remained diffuse.

Who bore responsibility when disclosure was technically adequate but comprehension was limited?
Who internalised the cost when incentive structures shaped advice across tens of thousands of schemes?

Responsibility remained distributed across committees, managers, and regulators — without structural attachment.

This is GoStrata’s Accountability Gap Doctrine in action.

As the strata system expanded in size and financial complexity, that gap simply widened.

Why the Alliance Case Matters Now

The Alliance Case matters today not because it is controversial, but because it is foundational.

It demonstrates that:

• the fiduciary tension was understood early,

• the legal framework was articulated clearly, and

• the regulatory responses emphasised disclosure over structural separation.

What is visible today in strata insurance commission and procurement conflicts is not a sudden crisis.

It represents cumulative consequences of preserved remuneration architecture.

The scale is larger.
The capital flows are greater.
But the structural logic remains consistent.

Conclusions: Structure Shapes Outcomes

The Alliance Case did not break the strata system.

It marked an inflection point.

The regulatory trajectory that followed preserved disclosure-based strata governance rather than redesigning incentive architecture to recognise that:

Capital flows shape advice.
Remuneration architecture shapes behaviour.
Disclosure alone does not neutralise either.

We have seen this pattern before. And, will do so again.

Since strata outcomes will not materially change unless incentive structures change.

February 19, 2026

Francesco Andreone

Case Summary

In Real Estate Services Council v Alliance Strata Management Ltd [1994] NSWCA 258, the NSW Court of Appeal considered whether a strata managing agent could lawfully retain insurance commissions received when arranging insurance for strata schemes, and whether aspects of its business structure breached statutory licensing restrictions. The Court confirmed that a strata managing agent acts as a fiduciary and cannot retain commissions arising from that role unless a recognised exception applies — principally full disclosure with fully informed consent, or prior contractual agreement made before the fiduciary relationship arose. After analysing seven different management contract forms used by Alliance, the Court held that only one version clearly entitled the manager to retain specified insurance commissions. The decision clarified the fiduciary framework governing strata managers and the strict conditions under which commissions may lawfully be retained.

Synopsis

Much of what passes for “information” in strata is not neutral education at all, but advertorial shaped by commercial incentives. This article explains how that happens, why disclosure alone doesn’t fix it, and how misaligned information flows quietly distort decision-making, contracts, and capital allocation across the strata sector.

[a 5:50 minute read, with 1100 words]

Introduction

There is a quiet but pervasive feature of the Australian strata ecosystem that most participants sense but rarely name.

Much of what passes for information in strata — articles, webinars, guides, explainers, “education”, even regulatory commentary — is not designed primarily to inform. It is designed to influence.

More precisely, it is designed to influence decision-makers in directions aligned with the commercial interests of those funding the content.

This is not a scandal.
It is not a conspiracy.
It is not even unusual.

It is the predictable outcome of a system in which the incentives that fund strata information are misaligned with the interests of the people consuming it.

This article is not about blaming publishers, suppliers, managers, or associations.

It is about understanding the strata advertorial machine: how it operates, why it dominates strata title discourse, and why goodwill or disclosure alone cannot fix it without structural change.

Advertorial is not the problem … misaligned incentives are

Advertorial is advertising presented in editorial form. On its own, it is neither good nor bad.

In many industries, it is clearly labelled, openly understood, and read with appropriate scepticism.

Strata title is different.

Strata decision-makers are typically:

• unpaid volunteers,

• time-poor,

• information-poor,

• legally exposed,

• responsible for assets worth millions, and

• structurally dependent on intermediaries.

In that environment, the distinction between strata education and promotion collapses.

The result is not occasional bias, but systemic narrative shaping — where the dominant explanations, risks, priorities, and “best practices” in strata just happen to align with the commercial models of those paying to be heard.

This is the core insight of GoStrata’s Incentive Alignment Doctrine:

Outcomes in strata are driven less by bad behaviour than by the incentives embedded in operating practices, contracts, revenue models, and information and capital flows.

Advertorial is simply the informational expression of that reality.

How the strata advertorial machine actually works

The strata advertorial machine is not one thing. It is an ecosystem loop.

Suppliers sell long-tail, high-value, low-frequency services. Their commercial risk is not capability; it is uncertainty. Shaping the narrative reduces that uncertainty.

Publishers and platforms need revenue. Independent strata publishing is economically fragile, and advertising or sponsorship is often the only viable funding source.

Industry associations rely on sponsors. Membership fees rarely cover costs, and sponsorship inevitably shapes tone, topic selection, and the boundaries of critique.

Strata managers are time-poor. Packaged explanations and supplier-produced “industry guidance” are often more accessible than bespoke analysis.

Committees seek reassurance. Faced with complexity and liability, they gravitate toward authoritative-sounding explanations that reduce perceived risk — even if they increase cost.

None of these actors are irrational. All are responding logically to their constraints.

But together they produce a self-reinforcing loop:

Suppliers Fund Content →

Content Shapes Risk Perception →

Perception Drives Decisions →

Decisions Reward Suppliers →

Suppliers Fund More Content

That is the strata advertorial machine.

What strata advertorial looks like in practice

Once the structure is visible, the patterns become obvious.

Australian strata media, events, magazines, newsletters, association platforms, and “education hubs” are awash with predictable themes:

• problems framed in terms that only one class of supplier can solve;

• webinars where risk is generic but solutions are brand-specific;

• articles heavy on anecdote and urgency, light on jurisdictional precision or data;

• guidance that frames owners as confused, managers and suppliers as heroic intermediaries, and regulation as impossibly complex; and

• content that avoids lower-cost, owner-led, or structural alternatives.

Importantly, much of this material is technically accurate.

The problem is not falsity.
It is selectivity.

Advertorial does not lie.
It curates reality.

Why advertorial is so insidious in strata

Advertorial becomes systemically distorting in strata because:

• owners tend to trust “expert” information;

• committees lack time to interrogate claims;

• the marketplace is informationally asymmetric;

• advertorial-shaped decisions are expensive; and

• over time, conflicted narratives become normalised.

Eventually, people forget what genuinely independent strata information looks like.

Why disclosure doesn’t solve the problem

The standard response to many issues in strata title is “better disclosure”.

Disclosure helps, but it does not cure.

A small “sponsored content” label does not rebalance:

• unequal expertise,

• time asymmetry,

• financial exposure, or

• the absence of competing narratives.

In strata, disclosure often functions as Procedure & Compliance Theatre rather than meaningful protection. The narrative effect remains intact.

This is why the issue must be understood structurally, not ethically.

The deeper cost: distorted decision making

The real harm of the advertorial machine is not persuasion. It is Capital Distortion.

Advertorial-shaped strata decisions tend to:

• favour early replacement over maintenance;

• privilege bundled services over modular ones;

• normalise premium pricing as “risk mitigation”;

• discourage owner capability-building; and

• entrench dependence on intermediaries.

Individually, each decision seems small. Collectively, across tens or hundreds of thousands of strata entities, they redirect billions of dollars by narrative rather than necessity.

This is not a media problem.
It is a governance and capital allocation problem.

Reading strata information like an adult

The solution is not to reject supplier strata content, but to read it with structural awareness.

Useful questions include:

• Who benefits if this framing is accepted?

• What alternatives are not mentioned?

• What would this problem look like if described by someone who does not sell a solution?

• Is this risk being explained — or amplified?

• What incentives shaped this perspective before a word was written?

This is not cynicism.
It is civic strata literacy.

Where to find (or build) better strata information

Independent research centres, regulators, ombudsmen, and peer-to-peer owner networks provide imperfect but generally agenda-free counterweights.

However, Australia still lacks a genuinely independent strata knowledge base built by owners, for owners.

That gap can be filled — and should be.

Why GoStrata operates differently

Since December 2025, GoStrata has deliberately repositioned away from commentary about strata actors and toward analysis of strata systems.

That means:

• no supplier sponsorship,

• no advertorial,

• no revenue model dependent on access-selling, and

• no need to soften conclusions for commercial comfort.

This is not virtue.
It is design.

If you want to analyse incentive misalignment, you cannot be funded by the incentives you are analysing.

Conclusion: the point is not purity … it is clarity

Advertorial will not disappear from strata. Nor should it. Suppliers have a legitimate right to advocate for their services.

The problem arises only when promotion pretends to be neutral explanation — or worse, education — and when decision-makers are not equipped to tell the difference.

The aim is not to eliminate advertorial, but to strip it of its camouflage.

Once recognised for what it is, advertorial loses its most powerful feature: the illusion of neutrality.

And in a sector where decisions shape buildings, finances, and lives for decades, that clarity matters.

GoStrata ARC extensions: from analysis to tools

This article forms part of the GoStrata ARC and is accompanied by a Governance Framework & Instruments that operationalise this aspect of the Incentive Alignment Doctrine at the strata entity level.

The framework is intentionally light-touch, manager-safe, and designed to function without law reform.

Analysis explains the strata system.
Tools change strata outcomes.

February 10, 2026

Francesco Andreone

Synopsis

Strata is no longer a niche form of property ownership or a marginal legal category. It is now a core institutional system shaping housing, wealth, governance, and everyday life for millions of Australians. Yet the way strata title is understood, debated, and regulated has not evolved to match its scale or significance.

The GoStrata ARC exists to address that gap. It is not a campaign or reform agenda, but a structural atlas: infrastructure for understanding how strata systems actually operate in practice, where they repeatedly fail, and which underlying design features matter over time. This article sets out what the ARC is, how it will operate, and why a structural approach is now necessary.

[a 6:50 minute read, with 1311 words]

Introduction

Strata is no longer a specialist corner of property law or a niche form of housing.

Across Australia, millions of people now live within strata and community title schemes. Trillions of dollars in residential assets sit inside collective ownership structures. These systems shape housing affordability, household wealth, insurance markets, building safety, and urban density. They are now a core institutional layer of modern Australian life.

Yet the way we understand strata has not evolved to match its scale or importance.

Public discussion remains fragmented and reactive. Regulatory attention focuses on discrete practices rather than system design. Reform cycles repeatedly target symptoms — fees, conflicts, governance failures — without a stable framework for understanding why those problems recur.

The GoStrata ARC exists to address that gap.

What the ARC Is

The GoStrata ARC is a structural atlas for strata systems.

It exists to provide orientation: to show how authority sits, how decisions are made, how money moves, how accountability is enforced, and where systemic stress accumulates over time within strata systems as they actually operate.

ARC is infrastructure for understanding. Its purpose is orientation, not persuasion.

It does not argue positions, promote policy prescriptions, or respond to news cycles. It sits deliberately upstream of debate, reform, and application, providing a stable reference point for how strata systems function as systems.

Why an Atlas Is Needed Now

Strata systems have crossed a threshold.

They are now:

• dominant, not marginal

• permanent, not transitional

• systemically important, not administratively incidental

Yet they are still commonly treated as:

• a narrow sub-field of property law

• a compliance problem rather than a governance system

• a consumer issue rather than an institutional one

This mismatch matters.

Systems of this scale cannot rely on goodwill, professionalism, or perfect behaviour. They must be designed to operate under pressure — anticipating error, incentive distortion, information asymmetry, and institutional fatigue.

Most contemporary strata debate does not begin there. It argues outcomes — fees, conflicts, defects, insurance costs — without first examining the system architecture that produces them.

ARC exists to change the starting point.

Where Strata Comes From — and Why That Now Matters

The strata system is now more than sixty years old.

In that time, almost everything around it has changed — how people live, work, invest, communicate, govern, and what they expect from institutions. Technology has transformed coordination and transparency. Social expectations have shifted. Housing has become central to household wealth, economic security, and daily life.

But the core design of the strata system has barely changed at all.

That mismatch now matters.

Strata is no longer a niche form of property ownership. It is becoming the dominant way people will live, work, and hold wealth in dense cities. It underpins housing affordability, urban density, sustainability, and social cohesion. Yet the system that governs it was never designed to operate at this scale, complexity, or visibility.

As a result, it increasingly fails in predictable ways:

• incentives are misaligned,

• accountability is diffuse,

• decisions are slow or distorted,

• disputes substitute for governance, and

• complexity overwhelms participants.

These are not conduct problems.
They are design problems.

GoStrata’s ARC exists because strata systems now operate in conditions very different from those for which they were originally designed — conditions of permanent visibility, financial significance, and institutional reliance.

The Problem the ARC Addresses (Structural, Not Moral)

The persistent failures of strata systems are not primarily the result of bad actors or insufficient disclosure.

They are structural.

They arise from repeated misalignment between:

• incentives and authority,

• decision-making power and accountability,

• cashflow sequencing and risk exposure, and

• information access and enforcement mechanisms.

These misalignments recur across jurisdictions, sectors, and regulatory cycles. They are remarkably stable and resistant to reform precisely because debate focuses on conduct rather than architecture.

ARC reframes the question.

Instead of asking who behaved badly, it asks:
What system design makes this behaviour predictable — and persistent?

What the ARC Actually Does

Because strata systems repeat the same structural patterns across buildings, jurisdictions, and time, ARC organises its analysis around doctrine rather than commentary.

ARC is a framework for identifying, mapping, and comparing the structural mechanics of strata systems.

It is concerned with:

• how governance operates under real conditions,

• where decision rights sit relative to consequences.

• how financial flows shape behaviour,

• how information is created, controlled, and withheld, and

• how enforcement functions in practice, not theory.

ARC’s use of doctrine is technical, not ideological. Doctrine refers to repeatable structural insights — patterns that recur across cases, buildings, markets, and time.

These insights are not policy positions. They are observations about system behaviour under pressure.

Some ARC insights may take years to mature. Others may never be published.

That restraint is intentional.

What the ARC Is Built From

The ARC is grounded in primary material rather than commentary.

Its inputs include:

• legislation and subordinate instruments,

• case law, used as structural evidence,

• contracts, approvals, and financial records,

• day-to-day governance mechanics, and

• comparative analysis across jurisdictions and systems.

ARC does not aim to harmonise law or produce guidance notes. Its purpose is to isolate which structural features matter over time — and which do not.

How the ARC Will Operate

ARC is not designed to be fast, comprehensive, or reactive.

It will publish selectively, move slowly, and prioritise durability over frequency. Some insights will take years to mature. Others may never be published if they do not meet the threshold of structural significance.

That discipline is deliberate. ARC is designed to outlast cycles, not feed them.

Why an Atlas, Not a Map

An atlas does not tell you where to go.

Rather, it tells you:

• where you are,

• how systems connect,

• where friction accumulates, and

• and where pressure is likely to break things next.

The GoStrata ARC exists so that future decisions about strata — by regulators, courts, policymakers, and market participants — can be made with structure in view, rather than after systemic failure has already occurred.

Background & Context

My work focuses on structural failures in strata systems — particularly conflicts of interest, governance breakdowns, and incentive structures that consistently produce poor outcomes for strata owners, residents, committees, and regulators.

I have spent more than three decades working inside this field, across law, policy, disputes, governance, development, regulation, and reform. I have seen strata when it was smaller, simpler, and more forgiving, and I have seen what happens when it is pushed beyond what it was designed to carry.

In the late 2000s, I founded and led what became the largest specialist strata law firm in Australia. As the firm expanded, it came under acute financial and governance pressure and, during that period, a trust account default occurred. At the same time — unexpectedly and without prior symptoms — I was diagnosed with prostate cancer and underwent surgery in March 2010.

In that context, I chose to prioritise health and recovery and to close the firm rather than attempt to salvage a failing structure. The professional consequences of that period are a matter of public record.

That experience permanently reshaped how I think about institutional fragility. It demonstrated how legal, financial, and governance systems behave under stress, particularly where incentives, human limits, and institutional expectations collide.

Those events are not the focus of my current work. They are, however, the reason that work now concentrates on identifying structural misalignment and building frameworks that continue to function when people, organisations, or markets do not.

The aim is not commentary for its own sake. It is to understand why these failures recur, and how strata title systems can be designed to remain functional under pressure without relying on perfect behaviour from imperfect people.

The GoStrata ARC exists because systems must be designed for reality, not for best-case assumptions.

January 28, 2026

Francesco Andreone

[a 2:00 minute read, with 415 words]

Introduction

GoStrata Media has now published its 1,000th article.

That milestone matters - not because of the number itself, but because it marks the completion of a phase.

Over the past five years, GoStrata Media has built a substantial public record of how strata title systems actually operate in practice. That work has covered hundreds of Tribunal and Court decisions, policy shortcomings, governance failures, commercial conflicts of interest, regulatory gaps and recurring structural problems affecting strata owners, residents, committees, managers, suppliers, service providers and regulators.

The accompanying infographic summarises that body of work.

But volume alone does not change systems.

From output to evidence

Much of GoStrata Media’s early stage publishing was necessarily broad and frequent.

Strata title is a fragmented sector with weak institutional memory and a tendency to repeat the same mistakes under different labels. Publishing regularly, responding to developments and explaining foundational issues have helped create a shared reference base.

That phase is now largely complete.

With more than 1,000 articles published, the constraint is no longer access to strata information.

The constraint now is that the same structural failures continue to occur in strata title despite the information being readily available.

Which tells us something very important.

Why publishing less matters now

At a certain point, publishing more strata articles does not produce better strata outcomes. It produces diminishing returns.

The core problems in strata title - misaligned incentives, embedded conflicts of interest, weak governance structures, poor accountability mechanisms and missing public policy - are not the result of misunderstanding. They persist because they are built into how the strata title system is designed.

Addressing those problems requires more than commentary.

It requires sharper focus.

A deliberate shift

As GoStrata Media moves beyond its first 1,000 articles, the pace of publishing will slow - intentionally.

Future GoStrata articles will be:

• More selective.

• More structural.

• Less reactive.

• More clearly directed at identifying recurring failure modes and design flaws rather than reporting symptoms.

The existing GoStrata Media archive remains central to this work. So, it is not being replaced or expanded for its own sake.

It stands as a body of strata evidence.

What remains unchanged

So, GoStrata will continue to examine:

• Why strata title systems fail in predictable ways.

• How strata governance and commercial incentives shape outcomes.

• Where strata title reform efforts succeed, and where they do not.

• What alternative structures might look like if they were designed to function under real-world conditions.

• Real and credible data that establishes those things.

• Which cases matter and why.

What changes is intent.

The next phase for GoStrata is not about producing more information. It is about using what is already known - carefully and deliberately - to support a better strata title system.

That is the work ahead.

January 13, 2025

Francesco ...

In this article, I venture into the current and ongoing debate about how Australian strata managers should be paid for insurance related work in a detailed critique of Bobby Lehane’s LinkedIn article that argues that it should continue to be by insurance commissions rather than on a ‘fee for service’ charging basis.

[a 7:00 minute read, with 1370 words]

The Full Article

INTRODUCTION

The ongoing debate over whether strata insurance work by strata managers should be remunerated through commissions or direct fees is not merely a technical argument about billing models. It is a debate about market structure, transparency, agency, conflict of interest and the economic conditions that shape how more than $1.50 billion in strata insurance premiums are distributed every year in Australia.

In Net vs Gross: Who Really Wins?, Bobby Lehane [CEO of Australia’s largest strata management business, PICA] offers a seemingly data-driven claim:

That commission based strata manager remuneration is better for consumers because, in his organisation’s experience, brokers operating on a net of commission basis charge higher fees than those working within the commission model.

On the surface, this appears persuasive. But as with most debates involving incentives, markets and intermediaries, the argument is only as strong as its assumptions. And those assumptions, once examined, reveal substantial conceptual, methodological and structural flaws.

Lehane’s article ultimately functions less as an objective assessment of insurance economics and more as a defence of an entrenched remuneration architecture that has, with decades of evidence, produced distortions, opacity and consumer harm.

Below, I unpack the core problems in the argument.

1. A narrow data point is not a market analysis

The backbone of Lehane’s claim is simple: two brokers operating on a net basis charged fees that were, on average, 52.0% and 84.0% higher than his organisation’s preferred panel broker.

Even if accurate, this finding proves almost nothing.

Sampling bias and self-selection.

The brokers analysed are explicitly those already operating in a net model within Lehane’s own portfolio. That is:

• they are not randomly selected,

• they are not representative of the full broker market, and

• their pricing reflects their own individual business models, not the structural effects of net pricing.

A sample size of two [both non-random, both operating within an ecosystem dominated by commission norms] cannot sustain a conclusion about what “the whole market” would do under an alternative remuneration regime.

A transition market is not a steady-state market.

A broker operating net-of-commission in a market where 90.% to 95.0% of competitors operate on commissions will inevitably appear more expensive. Why?

Because they must unbundle a cost that competitors currently disguise inside premium loadings.

If we evaluated renewable energy in 1996 using the same logic, that “wind and solar cost more per kWh than coal; therefore, consumers prefer coal”, we would never have created the conditions for competition, efficiency, innovation and scale that has led to the green energy revolution in Australia.

You cannot use transitional pricing to predict the economics of a mature market.

2. Commission-based pricing remains largely opaque and structurally inflationary

Lehane’s argument hinges on the premise that commission-based models result in lower costs for strata owners. But this is a proposition widely challenged by economists, actuaries, regulators and multiple state inquiries.

Where commissions sit, margins expand.

Insurance commissions increase as premiums increase. They are a percentage of a percentage.

For example:

• If premiums rise 15.0%, strata managers earn 15% more commission, without performing 15% more work.

• Brokers bundle their own commissions inside the product price, and insurers price to accommodate this.

This is a textbook case of moral hazard in business. A remuneration structure that rewards intermediaries for increases in insurance costs is, by definition, not aligned with consumer interest.

Opaque loadings distort true price comparison.

Unlike itemised fees, commissions are invisible within a premium. Strata owners are not provided with:

• the dollar amount of every commission and sub-commission,

• the loadings applied at underwriting to fund these commissions, or

• the effective margin diversification across insurers and brokers.

Lehane’s argument repeatedly invokes “choice” and “transparency”, but offers neither real price transparency nor structural separation of roles.

3. “Choice” in a structurally constrained market is not choice

Lehane notes that across 1,400 plans, 86% selected the commission model. He presents this as evidence of consumer preference.

But preference is only meaningful when choice is:

1. well-informed,

2. contextually independent, and

3. free of behavioural distortions and structural asymmetries.

Here, none of those conditions apply.

Information asymmetry.

Owners do not have actuarial models, broker tendering data, underwriting loss ratios, or visibility of the layered commission structures. They rely on the strata manager [who is remunerated and incentivised by the commission] to advise on which option is better.

This is an inherent conflict of interest.

Framing and default effect.

If commission based remuneration has been the default for decades, behavioural research (see Thaler, Sunstein, Kahneman) shows that consumers overwhelmingly stick with the default option even when alternatives are better, particularly in complex domains such as insurance.

Thus, citing that 86.0% of strata buildings choose the default tells us nothing about rational preference; it tells us how defaults behave in a low information environment.

Market lock-in.

Strata managers selecting panel brokers and preferred insurers shape the market more than owners do. Strata owners are not exercising “choice”, they are exercising bounded consent within an architecture designed by the suppliers and the intermediaries.

4. The argument ignores the governance and conflict-of-interest dimensions entirely

Insurance is not an isolated transaction. It is a governance activity touching:

• risk management,

• claims handling,

• capital works planning,

• building renewal, and

• value protection.

When the strata manager receives a benefit tied to the magnitude of the insurance premium, not the quality of the governance, conflict is structurally unavoidable.

A fee for service model aligns incentives with:

• efficiency,

• quality of advice,

• prudent claims management, and

• competitive tendering.

A commission model aligns incentives with:

• higher premiums,

• lower scrutiny of insurer pricing,

• higher retention of incumbent insurers and brokers,

• reduced competition,

• opaque cross-subsidisation.

Lehane’s article does not address this at all. It treats insurance as though it exists in a vacuum.

5. Economic reform is not judged by today’s prices but by tomorrow’s market behaviour

Lehane’s core claim that “structural change doesn’t guarantee consumer benefit’, is technically correct but theoretically empty.

Structural reform is not judged by:

• what brokers charge today, or

• what strata buildings owners choose under legacy defaults.

It is judged by what market mechanisms would operate under transparency, competitive neutrality and aligned incentives.

Historically, in Australia:

• banning conflicted remuneration in financial advice led to better long-term efficiency and lower costs,

• transparency in mortgage broking changed remuneration behaviour, and

• regulation of life insurance commissions reduced churn and mis-selling.

Strata insurance is not immune to these dynamics.

When incentives are unconflicted, markets price more efficiently over time.

6. A defence of the status quo framed as consumer protection is still a defence of the status quo

Lehane invokes “consumer choice” as the centrepiece of his argument.

But genuine consumer protection is not about providing multiple options. It is about ensuring the options are structurally fair, transparently priced, free of conflicted incentives and governed by principles of agency law.

A strata manager is an agent, a trustee and a fiduciary of the strata building and the strata owners. In agency and trust law, remuneration structures that create conflicts are not “choices”, they are breaches of fiduciary alignment, mitigated only by disclosure, not cured by it.

Disclosure of a conflict does not neutralise the conflict.

It simply notifies the consumer that the conflict exists.

CONCLUSIONS: The wrong debate, framed the wrong way

Lehane’s argument presents a simplistic binary - commissions vs net fees - and attempts to resolve it with a narrow and structurally biased dataset.

The real debate is not whether net models currently cost more under transitional market conditions.

Rather, it is:

• whether remuneration structures should align incentives with the interests of owners,

• whether pricing transparency should be real rather than theoretical,

• whether market distortions created by conflicted commissions should remain acceptable, and

• whether governance outcomes improve when intermediaries are paid for the work they actually perform rather than the size of the premium.

On these more meaningful criteria, the evidence from economics, regulation, market design and consumer protection all point in the opposite direction to Lehane’s conclusion.

Commission-based pricing is not “what consumers want.” It is what consumers have been funnelled into through legacy defaults, opaque pricing and structurally misaligned incentives.

The question, therefore, is not:

“Net vs Gross – Who Wins?”

Rather, it is:

Why have Australian strata owners been denied a properly functioning insurance market for so long, and who actually benefits from keeping it that way?

December 17, 2025

Francesco ...

Did you hear the joke about the strata manager? No? Well … here it is, but with an unexpected punchline about strata sector issues.

* Warning, this is a semi-satirical piece

[a 6:00 minute read, with 1168 words]

The Full Article

THE LIGHT BULB JOKE EXPLAINED

The light-bulb joke is a classic genre built on a simple setup: how many people from a particular group does it take to change a light bulb? with a punchline that usually exaggerates a stereotype about the group for comic effect.

There are endless variations. Most poke fun at cultures, professions, or tribes. And while the jokes can sound derogatory, they’re often embraced by the very groups being teased, just like the old favourite:

“How many Germans does it take to change a light bulb? One. We are efficient and not funny.”

Sometimes, applying the format to sub-groups is a way of relieving tension rather than creating it.

MY [STRATA MANAGER] VERSION OF THE JOKE

Q: How many strata managers does it take to change a light bulb?

A: One… doing the work of fourteen people, three software systems, one cranky chairperson, and a committee WhatsApp thread.

Here’s what that looks like in real life:

1. One strata manager to eventually read the first email/voicemail about the broken bulb.

2. The same manager to email the chairperson asking, “Do we actually need to replace it?”

3. The same manager to eventually read the chairperson’s reply confirming, yes, it is indeed dark.

4. The same manager to search the company directory for the electrician/handyman whose ABN hasn’t expired.

5. The same manager to issue the work order (after remembering the portal login).

6. The same manager to follow up a week later because no strata supplier has replied.

7. The same manager to review the electrician’s invoice and wonder why changing a bulb costs more than their first car.

8. The same manager to email the chairperson again asking: “Can you confirm the light works now?”

9. The same manager to eventually read the chairperson’s voicemail reply confirming it does work.

10. The same manager to enter the invoice into the payments system for committee approval [or send it to accounts].

11. The same manager to check whether anyone on the committee has actually clicked approve.

12. The same manager (or accounts) to finally pay the electrician.

13. The same manager (or accounts) to enter the invoice/payment into the accounts system.

14. The same manager to answer two separate strata owner queries at the next AGM: “Why did we spend money on an electrician?”

WHY I’M MAKING THE JOKE HERE [AND NOW]?

I’m often accused of ‘picking on’ strata managers. And yes, this article will attract the same kind of feedback, which is fine.

Because my point isn’t to criticise individual managers, it’s to highlight the structural issues that shape the strata management environment.

As I’ve said many times, most strata managers work hard, are very busy, and are usually overloaded.

The joke works precisely because even a tiny operational issue like replacing a single bulb becomes a 14-step compliance, communication, workflow, accounting, and customer-service drama.

It’s not the strata manager. It’s the strata system.

SOME [HOPEFULLY] CONSTRUCTIVE OBSERVATIONS

Here’s what the joke really illuminates.

I’ll summarise them now and explore some of the more poignant ones more fully in future articles.

1. There’s far more work in strata than most people realise

Even small tasks pile up. And when big tasks arise: litigation, defects, major refurbishment, etc, the workload explodes.

This raises important (and unanswered) questions:

• How many hours per year does it actually take to run a strata building well?

• How does that differ by size, complexity, age, and owner behaviour?

• How much time is spent on compliance vs routine issues vs owner and third party liaison?

• And, how do service levels and satisfaction shift as hours vary?

There is no public dataset. And, probably no private dataset either.

I’ve done my own calculations, and the results are surprising. More on that soon.

2. There simply aren’t enough strata managers

Here’s the current Australian snapshot from 2024 as best we can know and estimate it:

• 356,970 strata buildings,

• 3,173,631 strata lots, and

• approximately 12,500 strata managers and support staff.

[Source: UNSW City Futures, 2024 Strata Insights Report]

So there’s only:

• 1 management staffer per 29 buildings, or 0.72 management-hours per building per week, and

• 1 management staffer for every 254 strata owners, or 6.5 management-minutes per owner per week

That means that every person working in Australian strata title management can only devote three-quarters of an hour each week to a strata building or less than 10 minutes per week to a strata owner.

Even halving the number of “managed” strata buildings or doubling the number of strata staffers, doesn’t make the numbers pretty.

We need lots more strata management hours. Or, we need better use of those strata management hours. Preferably both.

3. Regulation is unintentionally reducing the supply of strata managers

Over the last decade, the strata title sector has pursued professionalism via education and licensing reforms.

Arguably, this has lifted standards but also raised barriers to entry.

The result is that the number of strata managers is rising too slowly to keep pace with the growth of strata buildings and strata lots.

Some consequences include:

• A shortage of experienced/senior managers.

• Higher wages (good for individuals, but disruptive for strata buildings).

• More turnover and “musical chairs” with strata management businesses.

• Pressure on strata management businesses to lower service levels, unless they raise fees.

We need more strata managers, experienced ones in particular.

4. Buildings don’t pay enough for management, given the required work

For 35 plus years, strata managers have said, “Buildings won’t pay more.”

And for 35 plus years, they’ve been right.

The outcomes of that are very predictable:

· Managers do less work, often reduced to compliance only activities.
More work is charged as extras, leading to customer cynicism and opaque pricing.
Disbursement charges proliferate, adding further scepticism.
Many strata management businesses depend heavily on commissions or third party incentives.

None of this helps strata buildings, strata owners, strata managers, or suppliers.

Everyone benefits if strata buildings pay realistic fees.

5. Automation is almost non-existent where it actually matters

While office tech has improved (cloud, email, accounting, CRM, etc), the core operational work of running strata buildings remains largely manual.

The strata title management sector is overdue for:

• workflow automation,

• predictive scheduling,

• real-time building operational tools,

• customer-facing dashboards, and

• AI-driven triage and documentation.

If the strata title sector doesn’t innovate, disruption will come [sooner or later] from outside.

6. The strata management “model” hasn’t changed in decades

Since the 1980s, almost everything people use daily, like banking, transport, shopping, and communication, has changed beyond recognition.

But strata title management has the same structures, same delivery model, same pricing logic and the same customer experience.

The strata title sector would benefit from experimentation in some or all of the following:

• business models,

• service packaging,

• hours and access,

• pricing methods,

• contract structures,

• communication approaches, and

• quality systems.

Innovation isn’t really optional anymore.

CONCLUSIONS

So next time a light bulb blows in your strata building, spare a thought for the person who, through no fault of their own, must navigate a 14-step obstacle course just to restore illumination.

The light bulb will always need changing.

But the process doesn’t need to stay this ridiculous or the same.

Now feels like the right time to build a better way for strata title management.

December 16, 2025

Francesco ...

It’s that magical time again. When strata levies fall due, strata committees melt down, suppliers release another glossy brochure, industry groups hand out awards, and everyone wonders whether their strata building will survive until the New Year.

So warm up your vocal cords, pour a glass of bubbly (or something much stronger), and join me in singing the only Christmas carol that truly honours the spirit of Australia’s multi-owned strata title madness.

Cue the choir. Cue the Wiggles. Cue the Fair Trading strata hotline [on hold].

[a 2:00 minute read, with 400 words]

The Full Article

THE 12 DAYS OF STRATA XMAS

On the first day of Christmas, my strata love gave to me…

A resigning NSW strata commissioner (finally free!)

On the second day of Christmas, my strata love gave to me…

Two Four Corners specials
(and a sinking feeling they’ll make a sequel)

On the third day of Christmas, my strata love gave to me…

Three quitting strata managers
(burnt out, bought out, or just quietly disappeared)

On the fourth day of Christmas, my strata love gave to me…

Four quarterly levies
(each one higher than the last, of course)

On the fifth day of Christmas, my strata love gave to me…

FIVE CONFLICTS OF INTEREST !!!
(The choir gets louder every year)

On the sixth day of Christmas, my strata love gave to me…

Six states reforming strata laws
(none of which match, help, or make sense)

On the seventh day of Christmas, my strata love gave to me…

Seven new SCA directors
(each promising transparency… again…)

On the eighth day of Christmas, my strata love gave to me…

Eight insurance underwriters
(all quoting numbers that look like phone numbers)

On the ninth day of Christmas, my strata love gave to me…

Nine committee training sessions
(yet somehow… zero improved behaviour)

On the tenth day of Christmas, my strata love gave to me…

Ten per cent interest on levies
(Merry Christmas, debt collectors!)

On the eleventh day of Christmas, my strata love gave to me…

Eleven unfinancial owners
(and one one going into bankruptcy)

On the twelfth day of Christmas, my strata love gave to me…

Twelve more months of public strata drama
(and we know there’ll be more spin-offs)

And now … everybody together (and, take a deep breath)

Twelve more months of public strata dramas,
Eleven unfinancial owners,
Ten per cent on levies,
Nine committee training sessions,
Eight insurance underwriters,
Seven new SCA directors,
Six states reforming laws,
FIVE CONFLICTS OF INTEREST,
Four quarterly levies,
Three quitting managers,
Two Four Corners shows,
And, a resigning NSW strata commissioooooner !!!

December 18, 2025

Francesco ...

NSW Fair Trading’s current consultation on strata insurance commissions will just reveal easy-to-predict strata stakeholder opinions. But they won’t matter much. That’s because what it will really reveal is structural dependence, and since it is, ultimately, asking the wrong question.

[a 8:00 minute read, with 1589 words]

The Full Article

NSW Fair Trading has opened the floodgates (again) on one of the longest-running and most corrosive debates in strata governance: insurance commissions for strata managers.

Their new Have Your Say consultation seeks feedback on an Issues Paper that asks four deceptively simple questions:

1. How well are commissions and their effects understood?

2. Do current requirements appropriately manage conflicts of interest?

3. Has the Issues Paper accurately described the likely effects of its options?

4. Are other conflicts of interest missing from the options?

NSW Fair Trading wants clarity, but they’ve stepped into a marketplace where clarity itself is a political act. Everyone understands strata insurance commissions differently because everyone benefits (or suffers) from them differently. In strata titl, ‘what’s true often depends on where your invoice revenues come from.

So, here’s what I predict the submissions to NSW Fair Trading will say. But more importantly, also why each strata stakeholder will say those things and why they don’t and won’t matter.

You can read our Daily Post for a summary of my predictions.

Or, for my more detailed explanations, become a paid subscriber.

Subscribe now

WHAT THE DIFFERENT STRATA STAKEHOLDERS WILL SAY, & WHY

Here’s who will [and won’t] make submissions to NSW Fair Trading, what they’ll say [or not], why and why it doesn’t matter.

Read more

Since common property in strata buildings is real estate, it’s assumed it has value like every other piece of real estate. But, maybe that’s completely wrong and common property is actually valueless [at least in the conventional sense]. In this article, I explore alternative propositions about common property value.

[a 10:00 minute read, with 2012 words]

The Full Article

INTRODUCTION

Something has been bugging me [and challenging others] for a long time in relation to strata title buildings: and that’s how to value common property.

It’s an issue that comes up from time to time in a few situations, like.

• When a strata owner wants to use common property temporarily for parking or to put tables and chairs out when they run a café,

• When a strata owner wants to extend their apartment into common property to create a balcony, terrace, attic, or to add a roof terrace or another floor.

• When a telecoms company wants to lease the common property roof or air space for antennae.

• When a developer of adjoining land wants to buy some common property on the boundary or to create a drainage easement.

In each instance, the issue of what that common property and/or rights over that common property are worth crops up and usually needs to be agreed or determined by a valuer or Court for the arrangements to be finalised.

There’s always been an assumption that strata common property has value, just like any other piece of real property.

In my view, that’s because:

• common property is real estate [after all there is a certificate of title] and it must, therefore, logically have value,

• people offering to use or buy use common property offer money for it,

• if the common property was not part of a strata subdivision, it would have value,

• licensed valuers’ ascribe value to common property,

• Courts have made decisions ascribing value to common property, and

• no one wants to accept that something they own [like a strata lot owner’s appurtenant interest in common property] is worthless

But, all those things don’t necessarily make that conclusion right, and I can think of many reasons why the opposite [or something fundamentally different] is correct instead.

So, in this article, I explore the problematic concept of whether or not common property has value, and, if it does, how it is determined.

Some basic land valuation concepts & principles

There are a few basic and long-standing concepts and principles to land valuation in Australia.

Firstly, there’s the unimproved capital value of land.

That’s determined in each state by the Valuer General or their equivalent.

It’s supposed to represent the underlying value of the earth [or dirt] in a parcel of land without any improvements like buildings, fences, productive vegetation or animals, etc. In some parts of Australia, it does include merged improvements such as drainage, levelling and filling, for land within the metropolitan areas.

It’s largely used for applying and apportioning government and other statutory charges like rates, land tax, etc.

Secondly, there’s the market value of land and/or structures on land.

Market value is simply the price of the land likely to be agreed upon between a seller and buyer in a marketplace.

The International Valuation Standards Council defines ‘market value as:

‘The estimated amount for which an asset or liability should exchange on the valuation date

between a willing buyer and a willing seller in an arm’s length transaction, after proper

marketing and where the parties had each acted knowledgeably, prudently and without

compulsion.’

https://www.ivsc.org/

But, in Australia, the principles for determining market value were set out by the High Court in an old case, Spencer v Commonwealth (1907) 5 CLR 418 , which included the following guiding principles in its judgment:

At paragraph 41 of the judgment Isaacs J said:

‘In the first place, the ultimate question is, what was the value of the land on 1st January 1905? All circumstances subsequently arising are to be ignored. Whether the land becomes more valuable or less valuable afterwards is immaterial. Its value is fixed by Statute as on that day. Prosperit,y unexpected, or depression which no man would ever have anticipated, if happening after the date named, must be alike disregarded. The facts existing on 1st January 1905 are the only relevant facts, and the all important fact on that day is the opinion regarding the fair price of the land, which a hypothetical prudent purchaser would entertain, if he desired to purchase it for the most advantageous purpose for which it was adapted. The plaintiff is to be compensated; therefore, he is to receive the money equivalent to the loss he sustained by deprivation of his land, and that loss, apart from special damage not here claimed, cannot exceed what such a prudent purchaser would be prepared to give him. To arrive at the value of the land at that date, we have, as I conceive, to suppose it sold then, not by means of a forced sale, but by voluntary bargaining between the plaintiff and a purchaser, willing to trade, but neither of them so anxious to do so that he would overlook any ordinary business consideration. We must further suppose both to be perfectly acquainted with the land and cognizant of all circumstances which might affect its value, either advantageously or prejudicially, including its situation, character, quality, proximity to conveniences or inconveniences, its surrounding features, the then present demand for land, and the likelihood, as then appearing to persons best capable of forming an opinion, of a rise or fall for what reason soever in the amount which one would otherwise be willing to fix as the value of the property.’

That’s a bit long and [legally] heavy, but it is commonly summarised as:

The estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm’s length transaction, after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion.

Thirdly, there’s the value of land as an income producing asset or a future developable asset.

That’s the value of land today, taking into account the potential future use, income or development of the land, less the cost of changing it to realise that potential and an allowance for risk.

There are a number of ways that potential value is determined, including approaches like the following that make predictions about future use and offset risk and uncertainties:

• The direct comparison method.

• The summation method.

• The income capitalisation method.

• The discounted cash flow method.

• The hypothetical development approach.

And, depending on the location and type of land, there are probably a few more ways to value it.

What happens in most strata buildings over common property value?

In practice, when common property needs to be valued, the appropriate method is less than obvious and a hybrid approach is usually taken between the market value approach and the hypothetical [or actual] development approach. So that:

• the common property space is compared to apartment space in the strata building to determine its value as if it were part of an apartment,

• the future value of the common property space after its use is changed and/or works are done is determine,d less the cost of reaching that stat,e plus some adjustment for risk to determine the next gain or profit, and

• a value is subjectively determined somewhere in between those amounts.

It’s all a bit vague and unsatisfactory. Leaving the parties involved to ultimately negotiate a number if they can, or Courts and Tribunals to pick their preferred or favourite valuer’s approach and simply adopt it if there’s a dispute.

In my view, that happens because neither method is appropriate and that’s because common property can’t be valued like other stand-alone real estate.

So, everyone’s using the wrong tools to measure common property value.

My issues about common property having value [in the conventional sense]

I think that there are a few options for common property value as follows.

A. Common property has value like all other real estate [the conventional position].

B. Common property has no monetary value [a radical counter view].

C. Common property only has value as part [proportionately] of the strata lot values.

But common property is not like other real estate.

In fact, I’ve written before that common property is a unique form of real property that is unlike any other and that Australian Courts have struggled to properly define it and appurtenant rights [see my article The Dilemma of One v. Many in Strata Buildings: Part 1: or, why the essential nature of a strata title scheme remains enigmatic …

Here are a few of the things that make strata title common property different and that I’ll explore in more detail in future articles.

1. Common property is not independently owned by anyone. So, whilst the strata corporation is the owner, it’s really owned by a group of strata lot owners.

2. Common property ownership is fluid. The group of strata lot owners who own common property is not fixed and changes without reference to other strata lot owners.

3. Common property cannot be singularly controlled. All of the common property is part of each strata lot in a legal sense and in practical terms, so no one can claim ownership of any part of the common property at any time.

4. Common property can’t be removed from the strata complex without most or all of the strata lot owners’ approval [although that varies from state to state].

5. Common property can’t be used exclusively by anyone without most or all of the strata lot owners [although that varies from state to state].

6. Common property can’t be sold without most or all of the strata lot owners’ approval [although that varies from state to state].

7. Common property value has multiple components that go well beyond the dimension, location and characteristics of the physical common property space itself, including things like:

• providing structural integrity to buildings and other strata lots,

• open space for planning control compliance,

• space and separation between strata lots, and

• light, air, wind, views and other amenity benefits.

8. The amenity and, to the extent that affects value, the value of common property is different to different strata owners and strata residents based on how it relates to their strata lot. For instance, a garden outside a ground floor apartment is more valuable to you than to top floor strata owners and strata residents, and a roof cavity space is more valuable to the strata owner of the lot immediately below it than to any other strata lot owner.

9. The concept of lost rights in and benefits from the common property has not been considered much in valuations, by Courts and Tribunals and in strata transactions. So, tricky questions like the following remain unanswered.

• Who loses the value when common property changes occur?

• Who gains value when common property changes occur?

• In what proportions do value changes affect strata lot owners, and can they vary?

• When do common property value changes affect strata lot owners [at the time of the change or when they sell]?

• Does the strata building play any part in value questions [and if so, how] or is it neutral?

In fact, when common property is exclusively used by only one or some strata lot owners, what really happens is that all other strata lot owners lose the use of that common property and suffer the opportunity cost. That’s why making exclusive use by laws, subdividing common property or selling or leasing common property usually requires that most or all of the strata lot owners approve it.

In other words, strata lot owners must approve giving up those common property rights and benefits.

CONCLUSIONS

I don’t think that strata title common property can be valued like other real property.

The value of the common property is really its value to each strata lot owner and not some independent or fixed amount.

Perhaps the value of common property is really best measured oppositely: by how its exclusive use, sale or transfer impacts the value of all the other strata lots and the strata owners’ property values. But, I’m not sure how you’d practically do that.

So, I’ll be exploring this alternative approach more in the future with a few other experts in the area. So, watch out for those musings.

December 10, 2021

Francesco ...

Whilst strata citizens aren’t really at war, they’re under siege from within their ranks and from outside foes without much awareness, few strategies and almost no weapons. So, they need to learn some lessons for the great conquerors, warriors and peace makers to survive and win. Mobilising a Strata Army is the antidote to the default setting of ‘patch now, panic later’.

And, here’s how they can do it.

[a 4:50 minute read, with 1178 words]

The Full Article

INTRODUCTION

Australia’s skylines bristle with towers like porcupines with commitment issues.

Behind every glittering [non combustible] façade lies a strata building corporation [part democracy, part soap opera, part unending group chat] tasked with fettling lifts, curating corridors, patching leaks, manicuring landscapes, and calming neighbours who behave like toddlers with legal representation.

Yet too many strata buildings slip into disrepair, financial peril or civic to and fro, while research and white papers gather dust and governments play copycat and crisis reactive law making. But, if housing is the headquarters of public policy, high density strata ownership and living is the poorly resourced satellite office everyone forgot to resupply and resource, no one wants to be that, and management never visits, whilst it is under attack from foes and friends alike.

So, it’s time to conscript a Strata Army; disciplined, well-drilled and armed with by laws, information and advertorials, checklists, how-to guides, levy and cashflow spreadsheets, and ruthless optimism.

Think of strata apartment ownership and living as Game of Thrones in micro-form: dragons replaced by fire doors, White Walkers swapped for water leaks and more, and every AGM a potential Red Wedding. Where the strata families vying for control of Sratateros, and a Jon Snow leads the fight against what threatens everyone.

But, a Strata Army isn’t about bayonets in the basement; it’s about transforming scattered strata owners and residents into a coordinated force that can plan, budget and act instead of lurching from crisis to crisis.

Mobilisation is the antidote to the default setting of ‘patch now, panic later’.

And, here’s how to do it, sourced from General Patton, Genghis Khan, Rommel [the Desert Fox], and Sun Tzu [with humble apologies as well].

MEET THE ENEMY: Now with Added Foes

First, an army needs to know and understand its enemies of all kinds and from all places.

And, here’s a strategic analysis outline.

DRAFTING OUR RANKS: A Deeper Recruitment Drive

Next, an army needs recruits. Plenty of recruits off varying types with different skills and abilities.

And, here’s where and how to get them.

STRATEGIC OBJECTIVES: With Expanded Battle Plans

Battles are tools to implement strategies, so they both need developing, refining, practising and reviewing.

So, here’s the ongoing development plan.

MORALE & MESSAGING: A Boosted Arsenal

Public opinion and citizen/soldier morale depend on strong, consistent and validating messaging that garners support.

Here’s a a few ideas about messaging. And, there’s plenty more.

1. Propaganda with Purpose

• Elevate communications to streaming service quality and memorability: like 90 second “episode recaps” before each meeting.

• Eye-level elevator screens rotating bite-sized facts (“Your levies at work: this week we fixed X”).

2. Humour as Armour

• A strata meme contest, with the winner scoring a month's levy rebate.

• “Bad By Law Bingo” at town-halls, strata shame them, laugh, learn and then rewrite the worst offenders.

3. Recognition Rituals

• A digital badge or button system (“Leak-Hunter”, “Budget-Ninja”, and more).

• The annual “Strata Honours List” published strata building wide.

4. Shock-and-Awe Transparency (NEW)

• Real-time spend trackers (“$436 being spent today on lift maintenance, and here’s the invoice”).

• A public “hall of fame” for contractors who come in under quote, on time and problem free.

5. Community War-Games (NEW)

• Scenario drills: “48-hour water outage - who does what?”, “unapproved works start on Saturday'“, etc.

• Hackathons [or Stratathons] with local university students to solve strata waste, energy and security pain points.

OCCUPATION, NOT RETREAT: A Longer Term Garrison Plan

The siege might end, but the battle and the war continue. So, the Strata Army’s role and work never ends, it just changes.

And, here’s how to do and maintain that.

1. Five-Year Review Boards

Every half-decade, an external audit of governance, finance and sustainability. Think of it as a NATO readiness review, minus the camouflage.

2. A Strata Academy

A national free online curriculum: from “Levies for Newbies” to “Advanced Dispute Detonation.”

3. Alliance Network

Buildings team up in regional clusters to bulk buy strata goods and services like insurance, power, gardening, and other services, the way small nations join defence pacts.

4. Civic Integration

Lobby local councils for shared infrastructure credits: recycling depots, micro-grids, community gardens, all bridging multiple towers.

5. Exit Strategy

Yes, armies plan for peace: set triggers for de-mobilising once KPIs are met, otherwise mission creep will have you repainting stairwells just to stay busy.

CONCLUSIONS

The opposite of military mobilisation isn’t peace, it’s benign neglect.

Strata organisations [whether strata buildings, strata committees, strata managers, representative associations, suppliers of goods and services, and regulators] and their strata owner and resident constituents that fail to arm themselves with knowledge, cashflow and community spirit end up surrendering to strata entropy, mundanity, negativity and pettiness.

Australian strata can’t afford garrison towns of creaky towers.

So, let’s muster a Strata Army now, while victory still costs less than defeat.

December 09, 2025

Francesco ...

Everyone’s very focused on the more visible and active strata stakeholders like strata committees, strata owners and strata managers. And, there’s a bit of focus on secondary stakeholders like building managers, suppliers of goods and services, and industry groups. But there’s some strata zombies lurking in the neverlands that no one notices, who, if they ever awaken, could change everything. They’re the zombie banks and financiers of strata lot owners.

[a 8:50 minute read, with 1701 words]

The Full Article

INTRODUCTION

Hidden just beneath the polished tiles, the by law disputes, and the bureaucratic churn of Australia’s strata title landscape lies a colossal but curiously silent stakeholder. Everyone knows they exist. Everyone depends on them. Yet they make no noise, raise no objections, and rarely, if ever, intervene directly in strata affairs.

They are the sleeping giants. Or, more accurately, the silent strata zombies.

Banks and financiers, those mortgage-holding institutions that technically own vast swathes of Australian strata title apartments through secured lending, are the most under discussed and under-acknowledged power bloc in strata title. They hover in the background of every strata building meeting, every capital works decision, every special levy, every repair or replacement project, and more. They watch. They wait. They do not participate.

But what if they did?

What if the banks ever awakened from their long strata slumber and acted in their actual financial interests? What if this silent horde of institutional strata mortgagees suddenly lurched into the governance of strata buildings with the force proportionate to the billions they have at stake?

The result might not be subtle. It might be a strata zombie apocalypse, a revolution in strata governance driven by those who, until now, have preferred to remain undead.

Before exploring this theoretical strata awakening, let’s consider the scale of their investment and the depth of their silence.

SOME BANKING NUMBERS FOR SCALE

Let’s begin with the maths, basic, but chilling.

According to the UNSW City Futures Centre’s Australasian Strata Insights 2024, Australia contains 3.174 million strata title lots. Adjust out around 10% for car spaces, storage rooms, and miscellaneous utility lots, and we are left with approximately 2.8 million actual strata title apartments.

Of all Australian properties, 52% have mortgages, according to the Australian Institute of Health and Welfare. Strata apartments tend to be more heavily mortgaged than free-standing houses, but let’s keep the conservative national average.

Median strata apartment value across Australian cities is $728,000, so applying a conservative 10% haircut for non-capital city stock gives a working median value of strata apartments of $655,200.

The average loan-to-value ratio (LVR) across Australia is 74.3%, meaning the typical mortgage secured against an Australian strata apartment is $491,400. [source]

So, applying those mortgage levels across the 52% of Australia’s 2.8 million strata apartments means there are 1,456,000 mortgaged strata lots, and total bank exposure to the strata title sector comes to approximately $491,400 × 1,456,000 = $7.145 trillion.

Let me repeat and emphasise that the size of the mortgage zombie horde that lurks silently beneath the surface of Australia’s strata sector is a cool seven trillion dollars!

And unlike other stakeholders like strata committees, owners, tenants, strata managers, regulators, suppliers, the banks have something no one else has: A direct, immediate, enforceable financial claim over the value of the asset.

Yet they are absent. Spectral. Comatose.

Why?

HOW CAN BANKS GET INVOLVED WITH STRATA BUILDINGS?

Legally speaking, strata mortgagee banks have a range of rights in strata governance, but most never use them.

The Strata Schemes Management Act (in NSW) and its equivalents in other states allow mortgagee banks to:

• Receive notice of meetings.

• Attend meetings.

• Speak at meetings.

• Vote in place of the strata lot owner when enforcing their security.

• Give directions to strata corporations in limited circumstances.

• Step in during default scenarios.

• Exercise the power of sale.

• Protect their collateral when a strata building is acting negligently or contrary to its duties.

In practice, this means strata mortgagee banks could, if motivated, exert influence on:

• Capital works funding.

• Special levies.

• Maintenance decisions affecting asset value.

• Building safety compliance.

• Insurance adequacy.

• Defect management.

• Litigation strategies.

• Collective sale and renewal projects.

• Sustainable upgrades affecting long term strata building integrity.

In short, strata mortgagee banks could be decisive voices in asset protection, governance quality, and the long-term financial management of Australia’s strata stock.

They could even be the most rational and stabilising force in the strata title room.

But they aren’t.

WHAT BANKS ACTUALLY DO IN STRATA BUILDINGS

Put simply: almost nothing.

• Banks do not attend strata AGMs.

• They do not scrutinise the sinking fund forecasts in strata buildings.

• They do not monitor whether the strata buildings are under-insured, under-maintained, or teetering on insolvency.

• They do not ask whether combustible cladding issues remain unresolved.

• They do not ask whether the windows are failing out or the waterproofing has passed its lifespan.

• They do not call for a special levy, even when doing so protects their own collateral.

A strata mortgagee bank might intervene only when a strata owner defaults on their mortgage, and even then, their engagement is limited to the individual strata lot, not the strata building as a functioning governance and asset structure.

The strata mortgagee banks behave as if their collateral, the strata apartment, is somehow independent of the rest of the strata building.

It is not.

A strata apartment is a derivative asset: its condition, amenity, and enforceability depend entirely on collective property.

And still, the strata banks slumber.

AND, WHY DON’T BANKS GET INVOLVED IN STRATA BUILDINGS?

The answer to the strata mortgagee banks malaise lies in 4 overlapping realities/

1. The Administrative Cost Problem

Strata banks manage millions of mortgages.

Monitoring the governance quality of thousands of strata buildings is expensive, time-consuming, and complicated. It requires specialised knowledge, legal nuance, and ongoing monitoring, none of which fit neatly into a standardised lending model.

2. The Agency Problem

Strata banks assume that strata buildings and their strata managers will act rationally to preserve the value of their own properties.

This assumption is… optimistic [to say the least] as I wrote about in the GoStrata Article Why do Good Owners make Bad Strata Decisions?

Strata buildings delay repairs. Strata committees fight. Strata levies stay too low. Building defects remain unaddressed. Capital works funds remain underpowered. Yet the strata mortgagee banks treat the whole strata title system as if it is self-correcting.

3. The ‘Collateral Pool’ Effect

Because strata banks lend across diversified portfolios, they assume losses in any one strata building will be absorbed by gains elsewhere.

This works, until it doesn’t.

Things like large-scale building defects, regulatory upheaval, climate resilience failures, or mass insurance withdrawal or increases could expose strata banks’ trillions in collateral to systemic risk.

4. No Regulatory Pressure

Australia has never imposed lender engagement obligations in strata title governance.

In contrast, the United States and South Africa have models that actively require or incentivise bank involvement.

Which brings us to the comparative section.

SOME OVERSEAS COMPARISONS

The US Model: Fannie Mae and Freddie Mac

In the United States, Fannie Mae and Freddie Mac impose detailed lending criteria for condominium (strata) buildings. These include very detailed requirements covering hundreds of pages that include:

• Minimum reserve fund requirements.

• No significant unaddressed defects.

• Up-to-date maintenance plans.

• Adequate insurance.

• No litigation threatening solvency.

• Regular financial disclosures.

• Professional management.

If a US strata building does not comply, banks and lenders cannot issue mortgages in that strata building.

This model is preventative. It protects the financial system, strata buyers, and strata bank lenders by forcing US strata buildings to remain financially healthy and operationally competent.

If Australia applied similar criteria tomorrow, a terrifying number of strata buildings would become ‘unlenderable’ overnight.

The zombie banks would awaken and start biting.

The South African Active Mortgagee Model

South Africa’s sectional title system gives strata mortgagee banks far more active and direct involvement with strata buildings. Key features of the South African system for strata banks include the following rights and entitlements:

• Requesting and receiving insurance documentation.

• To withhold or give consent for alienation or extension of rights.

• Applying to appoint administrators.

• Applying for the winding up of the strata building (after deemed or physical destruction of the strata scheme).

• Attending general and trustee (strata committee) meetings, receiving notices, and inspecting records of the strata building.

• Appointing strata managers if they hold interests in over 25% of strata lots.

• Requiring specific insurance coverage if they hold interests in over 25% of strata lots.

In this system, the strata mortgagee banks are not zombies. They are present, vocal, coordinated strata stakeholders.

And, the entire South African strata ecosystem behaves differently as a result: more disciplined, more financially prudent, more focused on long-term strata building management.

WHAT COULD [OR WOULD] HAPPEN IF AUSTRALIA’S BANKS AWAKENED?

If these silent strata zombies were to rise, several structural shifts could occur in Australian strata titles.

1. Strata Buildings Would Become More Financially Responsible

Banks would insist on minimum capital works funding, transparent data, and proper long-term planning.

2. Building Defects Would Be Addressed Earlier

Strata banks would not allow unresolved structural and other building defects to undermine their collateral.

3. Strata Levy Levels Would Increase

Underfunded strata building sinking funds would be unacceptable. Rational financial management would prevail over short-termism.

4. Insurance Adequacy Would Improve

No more underinsurance. No more risk exposure blind spots. No elevated insurance excess levels.

5. Strata Managers Would Face Professionalisation Pressure

Strata banks prefer predictable, standardised processes in all things. So, the strata management sector would undergo a structural maturation to satisfy more involved strata banks.

6. Collective Sales & Renewals Could Accelerate

Strata banks might support redevelopment of aging, unviable strata building stock, creating a massive urban renewal accelerator [which isn’t happening now].

In other words, the strata zombie awakening would be good for strata buildings, but uncomfortable for strata owners and other strata stakeholders.

CONCLUSIONS

Australia’s strata title sector is a multi-trillion-dollar asset class governed by volunteers, intermediated by small businesses, and regulated lightly compared to its scale.

Meanwhile, the largest financial strata stakeholders, the banks, remain the silent strata zombies. Undead but inactive. Present but disengaged. Holding trillions but exercising almost no influence over the governance of the very strata assets securing their loans.

If these strata zombies ever awaken, the Australian strata title ecosystem will transform overnight so that it is.

• Better funded.

• More rational.

• More professionally governed.

• Less chaotic.

• Less short-term.

And, far less tolerant of dysfunction, delay, underfunding, and neglect.

The question is not whether they should awaken.

The question is how long Australia can sustain a multi-trillion-dollar asset class in which the largest financial stakeholders remain silent, slumbering, and structurally invisible.

Until then, the strata zombies remain underground, dead but not gone, present but not active, powerful but dormant.

The smartest people in strata land already know that you should fear the day the strata zombies rise.

December 04, 2025

Francesco ...

The prospect of artificial intelligence coming to strata title is exciting, scary and [more importantly] challenging. So, it’s well worth thinking about. In this article, I critique one strata thinker’s views about AI to keep developing them, to try to guide better strata AI outcomes and to keep strata thinking sharp and insightful.

[a 4:00 minute read, with 785 words]

The Full Article

INTRODUCTION

Christopher Miller’s LinkedIn article, Where the PUCK is AI taking strata management?, offers a grounded perspective on artificial intelligence in the strata title sector. His argument centres on a pragmatic approach to focus on improving strata workflows now, rather than speculating about Strata AI’s future.

While much of Miller’s reasoning is sensible and refreshingly devoid of hype, the article also reveals limitations in its assumptions, scope, and framing of the Strata AI conversation.

STRENGTHS OF THE ARGUMENTS

First, Miller is right to challenge the overblown expectations around AI.

The comparison to the early days of radium [an exciting breakthrough with little immediate application] is apt. In strata title management, as in many industries, AI’s promise has been abstract and speculative. Miller wisely reminds readers that AI, in its current form, is best suited to supporting human tasks rather than replacing them, especially in a field where emotional intelligence, relationships, negotiation, and context sensitivity are crucial.

His emphasis on using AI in strata title work for ‘boring, time-consuming’ tasks like document retrieval, summarisation, and data collation is entirely realistic. These are precisely the areas where large language models and automation tools can shine today for all sectors [including strata title] without posing ethical dilemmas or triggering resistance. His practical advice to document your processes, streamline workflows, and prepare your systems is valuable regardless of how Strata AI evolves.

Miller also correctly identifies that many businesses fail to extract value from digital tools not because the technology is lacking, but because their existing processes are chaotic, undocumented, or overly dependent on individual knowledge holders. In that sense, his advice about ‘tending the garden before the rain’ is also sound operational leadership.

WEAKNESSES & LIMITATIONS OF THE ARGUMENTS

However, Miller’s article has some flaws.

Its most glaring issue is a subtle contradiction between its anti-hype rhetoric and the promotional undertone for the Resvu platform. While Miller transparently discloses his relationship with Resvu, the article ultimately reads as a product endorsement cloaked in strategic reflection. This undermines the objectivity of his analysis and shifts the focus from an industry-wide lens to a vendor-centric pitch. The metaphorical puck, it seems, ends up somewhere near Resvu’s marketing team.

Additionally, Miller presents a false binary between speculating about Strata AI’s future and focusing on immediate process improvements. In reality, the best organisations are doing both: experimenting with pilots and proofs of concept while concurrently investing in foundational data and workflow hygiene. A forward-looking strategy does not require clairvoyance, only structured curiosity and iterative testing.

Furthermore, Miller’s claim that ‘AI won’t write the nuanced, relationship-building response’ is already outdated. Generative AI models are increasingly capable of drafting sophisticated messages tailored to tone, context, and even relationship dynamics. While human review is often necessary when using AI, dismissing these capabilities risks underestimating the technology’s present state and narrowing its potential applications too soon.

The article also neglects a broader strategic view. AI in strata management isn’t just about internal efficiency. But rather, Strata AI could reshape regulatory compliance, energy monitoring, contractor accountability, resident engagement, dispute resolution, and predictive maintenance. These systemic opportunities are barely acknowledged, and instead, the focus remains on internal process tidiness. This risks missing the larger shift toward AI as infrastructure rather than just a workflow plug-in.

Finally, Miller’s invocation of the Gretzky quote, only to dismiss it, reveals a missed opportunity.

Rather than abandoning the idea of skating to where the puck is going, the strata sector should be investing in building better predictive models for where technology and strata owner and resident expectations are heading. That requires industry-wide collaboration, policy experimentation, and a willingness to get a bit uncomfortable with uncertainty.

CONCLUSIONS

Miller’s article offers practical, actionable advice: get your strata house in order, clean up your strata processes, and don’t wait for Strata AI to save you. These are undeniably useful messages, especially in an industry sector like strata title that struggles with digital maturity and innovation.

But Miller’s reasoning is overly constrained by present tense thinking and limited by product loyalty.

A more balanced and visionary approach would acknowledge that while no one can precisely predict where the puck is going with Strata AI, we still need to move and not just wait passively for someone else to flick pass it to us.

December 02, 2025

Francesco ...

Imagine waking up every strata day and having to repeat the same mundane, mind-numbing and ineffectual discussions, debates, decisions, problems and outcomes … over and over and over again. Tragically, this kind of Groundhog Day scenario is playing out in strata title buildings across Australia. It’s a curious phenomenon that‘s caused by a few core factors that can [and should] be changed.

[a 9:00 minute read, with 1825 words]

The Full Article

INTRODUCTION

In strata title buildings across Australia, a curious phenomenon plays out year after year.

Strata buildings rehire the same consultants to answer the same questions, receive reports that repeat previous findings, and debate problems that were supposedly ‘resolved’ long ago. Strata committees get excited about upgrades that were already shelved three years ago, and issues resurface as if they’re appearing for the first time.

It’s not a coincidence.

It’s Strata Groundhog Day, where strata buildings seem stuck in a loop of déjà vu, unable to move forward, because they don’t remember what’s come before. Decisions lack continuity, memory is fragile, and the wheel is reinvented endlessly.

This Strata Groundhog Day effect isn’t just frustrating; it’s inefficient, expensive, and sometimes destructive. And, it happens because of deeply embedded structural and cultural issues within how strata buildings are governed, managed, and inhabited.

So, let’s look at the core contributors to this repeating cycle, why they persist, and what we might do to break free.

The Illusion of Strata Information Collection

Strata buildings generate mountains of information: defect reports, meeting minutes, contractor quotes, legal advice, owner correspondence, building plans, by laws, insurance policies, and more. At first glance, it seems like a strata building should be rich in knowledge.

But the reality is very very different. Most of this strata information is collected for the moment, not for the future. It lives in strata manager or strata committee inboxes, personal laptops, or paper files tucked away in storage. It’s rarely tagged, indexed, summarised, or structured for future use. So while the strata information exists, it’s often unusable.

As a result, the next time the strata building faces a similar issue [say, investigating waterproofing failures], there’s no usable record of what happened last time. No one knows what was tested, what was found, or why a decision was made.

So a new consultant is hired, the inspection cycles start again, and the loop begins anew.

Inaccessible Strata Information: The Hidden Barrier

Even when past information does exist, accessing it is often a frustrating or impossible process.

Consider the formats: many strata building records are stored as scanned PDFs, disorganised email threads, or locked inside proprietary software used by a specific strata manager. If that strata manager changes or their system upgrades, the strata information may become permanently inaccessible or only accessible with extra effort, time and cost.

There’s also a control problem. Sometimes strata committee members or strata managers hoard access, intentionally or unintentionally, so others can’t easily see past reports, historical decisions, or detailed data. Strata buildings don’t have central, transparent, digital libraries where every strata stakeholder can search for and retrieve past material.

So when new people join, they don’t pick up where the last group left off; they start again, building from scratch. That’s not just inefficient; it creates a culture of forgetfulness, even when the strata memory technically exists.

Revolving Door Membership: New Strata People, Same Strata Debates

The high turnover rate among strata stakeholders is a structural challenge.

Strata owners sell. Strata tenants relocate. Strata committee members step down. New strata residents arrive enthusiastic and full of ideas, unaware that those ideas have already been explored, often multiple times.

Without onboarding processes or documented strata decision histories, each new group assumes they’re the first to encounter these challenges. The solar panel debate reignites. The question of strata building security gets revisited. Strata renovation policies are re-argued. It’s not the people that are the problem; it’s that no one passed them the strata baton.

So, strata title becomes a relay race where every strata runner keeps starting from the starting line because no one remembers where the last runner left off.

Strata Manager Churn: When the Memory Leaves the Strata Building

Strata managers play a key role in continuity, but they, too, come and go.

Whether due to staff turnover, strata manager business consolidation, interpersonal issues, poor service, cost savings, etc, strata buildings often replace strata managers every few years. With each change, there’s a risk that institutional knowledge is lost.

Even within a single strata management business, staff assignments can shuffle frequently. The strata assistant who knew the building inside out might be replaced with someone new who’s unfamiliar with its quirks, history, and politics. They inherit a digital filing system that may be disorganised, outdated, or full of gaps. They don’t know what they don’t know and rarely get told.

A new strata manager might reissue the same work orders, request the same quotes, or give advice that conflicts with past legal opinions, simply because they weren’t aware of the context. That creates friction, frustration, and unnecessary strata expense.

Strata Consultant, Contractor & Supplier Opportunism: Profiting from Forgetfulness

When knowledge is fragmented and forgotten, opportunism creeps in.

Strata consultants, advisors, contractors and suppliers often benefit from a strata building’s amnesia. They can resell the same advice, supply more goods or services, offer duplicative inspections, or suggest action plans already proven unworkable because no one remembers or can prove otherwise.

It’s not always malicious. In fact, many strata consultants, advisors, contractors and suppliers simply respond to the brief they’re given. But if that brief ignores the past, they’re happy to start from scratch. That means strata buildings pay again and again for reports, audits, light globes and things that repeat prior work, without achieving new outcomes.

This Strata Groundhog Day isn’t just tedious; it’s profitable for those on the outside, and costly for those on the inside.

Differences of Opinion, Lacking Context

Disagreements in strata buildings are normal.

What’s not normal, or at least, not healthy, is having the same strata arguments repeatedly without ever learning from them.

Why? Because strata stakeholders often disagree without access to the background context. One strata owner argues for cost-cutting, another strata owner wants investment in maintenance, and a third strata owner pushes for capital works. But none of them know that similar decisions were made three, four, five and more years ago, and how they played out.

Context is essential to understanding the consequences of past strata decisions.

Without it, strata debates are reduced to gut feelings and personal preference. Every strata conflict becomes new and unresolvable, not because strata solutions don’t exist, but because no one remembers what they were.

Short-Term Thinking Over Strata Custodianship

In strata buildings, there’s often a dominant year-to-year mindset.

Strata committee members plan around the next AGM or the next levy cycle. Rarely do they think about the building as a 50 or 100 year asset with evolving needs and long-term responsibilities.

This short-termism leads to reactive rather than strategic strata decision-making. Maintenance is deferred. Investment is avoided. Long-term planning is reduced to what can be squeezed into next year’s budget. Important decisions are delayed simply because they might not benefit the current strata committee’s term.

A strata custodian mentality where strata owners see themselves as stewards for the next generation is rare. But without it, strata buildings keep circling back to fix the same strata problems, because no one committed to solving them properly the first time.

Invisible Strata Opportunity Costs: The Price of Doing Nothing

In most strata buildings, the cost of doing something is clear: it’s in the budget, the levy increase, or the quote. The cost of not doing something? That’s harder to see.

Opportunity costs like increased strata repair bills due to deferred maintenance, lost energy savings from not upgrading infrastructure, or declining property values from cosmetic neglect are rarely calculated or understood. There’s no “cost of inaction” line item in the strata budget. As a result, action often feels expensive, while inaction feels safe. But in reality, the opposite may be true.

By ignoring strata opportunity costs, strata buildings [and strata committees, managers and owners] undervalue prevention, efficiency, and improvement. They stick with what they know until the next crisis forces them into reactive strata spending once more.

No Tools to Measure Quality of Strata Life

Strata buildings often forget that they are also communities.

They’re not just building structures to be maintained, they’re places people live, sleep, work, love and raise families. Yet, there are few, if any, tools or frameworks for measuring how strata building operations impact strata residents’ quality of life.

Delays in strata decisions, endless strata disputes, dirty and untidy common areas, and ignored complaints wear down strata morale and erode trust. But these impacts go unmeasured and unaccounted for. A legal, plumbing or insurance bill can be quantified. A year of strata dysfunction, frustration, and disengagement? Not so much.

If strata decision making incorporated quality-of-life metrics like strata satisfaction scores, strata resident participation rates, or reported strata frustration levels, it might incentivise better strata governance and long-term planning.

Until then, strata buildings will keep prioritising the quantifiable over the meaningful.

Escaping Strata Groundhog Day

So how do we break the Strata Groundhog Day loop?

It starts with recognising that continuity is not a luxury, it’s a necessity. Every strata building is a long-running project with a changing cast, but the same storyline.

Here are some strategies to help strata buildings evolve instead of revolve. There’s plenty more.

• Create a Strata Building Memory System: Establish a central, cloud-based repository for all strata building reports, decisions, plans, and policies, searchable, secure, and accessible to all strata stakeholders.

• Document Every Strata Decision With Context: Don’t just note what was decided, record why, what alternatives were considered, what supporting evidence was used, and what the expected strata outcomes were.

• Onboard Every New Strata Committee Member, Strata Manager & Supplier: Offer strata building induction packs that include a strata building history, a key strata issues summary, and current strategic priorities for the strata building.

• Conduct an Annual Strategic Strata Review: Don’t just review the strata building budget, instead review the strata building’s long-term goals, unresolved strata issues, progress to date and the lessons learned from the past year.

• Measure Opportunity Costs: Start tracking the cost to the strata building of delays, disruption, and disengagement, and, if not doing things.

• Measure Opportunity Costs and Quality of Strata Life: Develop strata building health key performance indicators, measure and record them and create dashboards that reflect both financial and social performance.

• Hire for Continuity: Engage strata managers, consultants and suppliers who value continuity, document their work thoroughly, and support strata knowledge transfer between straat buildings, strata owners and themselves.

Conclusions

Strata title buildings are not doomed to repeat their mistakes. But unless they confront the cultural and structural issues that make forgetfulness routine, they’ll remain stuck in a costly time loop.

Breaking free of Strata Groundhog Day requires systems, stewardship, and a commitment to collective memory. Otherwise, strata buildings will keep asking the same questions, commissioning the same reports, and debating the same projects, over and over, as if for the first time.

And for all the strata stakeholders inside those strata buildings, it’ll feel like nothing ever changes. Because in a sense … it doesn’t.

November 27, 2025

Francesco ...