Read All [or Some] About It ! As there’s finally a Netstrata report

After almost 11 months of the first public revelations about Netstrata, there’s some information for strata citizens about what’s been going on there.

That’s because a report prepared by McGrathNicol for NSW Fair Trading and Netstrata has been released.

It’s called the Summary of Findings and Recommendations about Network Strata Services Pty Ltd [the licensed strata management corporation], and you can read it here.

It’s an interesting glimpse into what’s been going on, and we’ll be writing more about it in the near future. So, watch out for more GoStrata Articles and Daily Posts.

But, for now, let’s recap how it happened, what resulted, and what some strata stakeholders and commentators have been saying about it.

The independent investigation by McGrathNicol resulted from an agreement between Netstrata and NSW Fair Trading in May 2024 that was contained in an Enforceable Undertaking which we wrote about in the Daily Post Wanna Know What Netstrata & NSW Fair Trading Agreed.

So, it’s not everything as the scope was limited, it’s the anonymised and neutered public version, and, it’s been filtered through a process of consultation between NSW Fair Trading and Netstrata.

Some key strata stakeholders and commentators have already made comments about it as follows.

NSW Fair Trading issued a Press Release that’s pretty neutral, and you can read it here.

The NSW Fair Trading Commissioner, Natasha Mann, interestingly said that:

• ‘the heart of this matter is that strata managers have a legal duty to act in the best interests of the people they work for – the owners’ corporation’

• ‘the disturbing practices described in this report suggest that Netstrata does not appear to have always done this’

• ‘the McGrath Nicol review is only one component of NSW Fair Trading’s broader review into Netstrata’.

Netstrata responded to the report on its website by disputing most of the potential breaches identified in it, saying it has implemented many of the recommendations and heralding the report's comments that some services provided by its subsidiaries were at or below typical market rates.

Strata Community Australia told everyone in a News Release issued on the same day as the report was released and that:

• they’d completed an independent review of Netstrata by Graham Gorrie,

• the review contained a number of recommendations for improvement being made to Netstrata [that weren’t released],

• the review led to changes to the SCA NSW Code of Ethics,

• they sent it to the Professional Standards Authority in connection with their Professional Standards Scheme,

• they’re discussing things with NSW Fair Trading, and

• that the SCA Board is reviewing the McGrathNicol report.

The Owners Corporation Network noted the issue of the McGrathNicol report but didn’t really comment on it in its Media Statement.

Amanda Farmer at Your Strata Property said on Linkedin that ‘the report confirmed that, for the most part, Netstrata complied with the law as it was at the time, making disclosures where required’ but that it ‘describes some of Netstrata’s conduct as being “not in the consumer's best interests"’, focusing on whether or not disclosure is a solution or not.

Michael Teys said seven things as quick takes on Linkedin that focused on the lessons strata managers [and others] can take from the report.

The Australian Consumers Insurance Lobby complained about the limited scope of the investigation and queried the selection criteria for the 60 strata buildings that were reviewed in a Media Release that you can read here.

So, there hasn’t been a lot of analysis of the McGrathNicol report, virtually no critiques of what it contains, and almost no clues as to what’s happening next in relation to the report, its findings or NSW Fair Trading’s wider investigation.

At GoStrata Media, we’ll be keeping an eye on any more and better commentary that comes out. Plus, we’ll have more to say about the McGrathNicol report soon.