Why Your Body Corporate Should Only Hire an Ethical Manager (No Commissions, No Kickbacks)

Based on research by Dr Nicole Johnston, “At the Crossroads: Addressing Pervasive Conflicts of Interest in Strata Management” (Strata Knowledge Pty Ltd, October 2025)

The Problem: Hidden Commissions and Kickbacks

If you own an apartment in Queensland, your body corporate manager plays a huge role in looking after your building and your money. But did you know that many managers get paid extra—commissions and kickbacks—from insurance companies and suppliers? This means they might make decisions that benefit themselves, not you.

Key Issues:

Managers may choose insurance or suppliers that pay them the highest commission, not the best value for your building.

You often pay more, and it’s hard to know where your money really goes.

Some owners end up subsidising others, especially in larger buildings or those with higher insurance premiums.

Why Disclosure Isn’t Enough

The law says body corporate managers must “disclose” commissions, but Dr Johnston’s report found this doesn’t fix the problem. Disclosure is often confusing, incomplete, or even misleading. Most owners don’t understand the full impact, and it doesn’t remove the conflict of interest.

How It Hurts Owners

Trust breaks down: Owners feel body corporate managers are working for themselves, not for the building.

Pressure tactics: Managers may push you to use certain suppliers or brokers that are affiliated with them.

Property Developer deals: Some body corporate managers work with property developers before a building is finished, often for free or low fees, in exchange for future management contracts and commissions. This can lead to low budgets, poor defect management, and ongoing control by the developer—hurting future owners.

Staff incentives: Some managers pay staff bonuses based on extra fees charged to owners, encouraging overcharging and unnecessary services.

Market failure: The body corporate management industry has a history of low base fees, with managers making up the difference through hidden commissions and kickbacks. Owners often lack the expertise to provide proper oversight, making it easy for managers to take advantage.

What Ethical Body Corporate Managers Do Differently

Some managers (like The (Nuu) Co have moved to a “fee-for-service” model—no commissions, no kickbacks, just clear fees for clear services. These body corporate managers are more transparent, trustworthy, and focused on serving owners.

What Needs to Change

Dr Johnston’s report recommends:

Ban insurance commissions and kickbacks.

Separate developer consulting from management.

Restrict affiliated entity dealings.

Require independent oversight for supplier choices.

The Bottom Line

If your manager gets paid extra by someone else (like an insurer or supplier), their advice and decisions may not be best for you. You deserve a manager who works only for you, with clear fees and no hidden payments. That’s the only way to get honest service and protect your investment.

Credit:

This blog is based on the findings of Dr Nicole Johnston, “At the Crossroads: Addressing Pervasive Conflicts of Interest in Strata Management” (Strata Knowledge Pty Ltd, October 2025).