NSW Fair Trading has begun criminal proceedings against Netstrata, claiming the strata manager breached its statutory obligations, did not adequately disclose or appropriately manage conflicts of interest and received undisclosed financial benefits.

The proceedings name Netstrata director and licensee in charge Stephen Brell, and Netstrata today announced he will step aside as MD while the legal process plays out. Chairman Ted Middleton will take on the MD role.

“The charges will be defended,” a company spokesman told insuranceNEWS.com.au.

The matter is listed for the NSW Supreme Court on July 27 and 28.

Netstrata is one of the biggest strata management companies in NSW, handling about 1000 properties.

Fair Trading says the company failed to disclose or manage conflicts of interest, including in relation to third-party service providers, and provided false or misleading information to the regulator.

The regulator announced in 2024 that it was investigating Netstrata after an ABC report said the company was charging excessive fees. The ABC also made allegations around some strata insurance broking practices.

The Netstrata spokesman says the company wants to emphasise “the proactive work we have done with the Office of Fair Trading since its investigations began in 2024, including support for the independent review of our operations. We have since implemented, or are implementing, that review’s recommendations, most of them ahead of schedule.”

Netstrata has also implemented a total zero-commission policy, it says.