NSW Fair Trading inspectors targeting strata manager supervision requirements
17 October 2022
NSW Fair Trading has today reported — in their Property Matters newsletter — that they are taking compliance actions against strata managing agents that do not meet their obligations.
The inspections are being undertaken as part of the regulator’s Strata Managing Agent compliance program, which involves targeting supervision requirements during inspections of NSW strata companies.
NSW Fair Trading has advised that “of the 44 inspections conducted during a recent one-week operation, 86% (38) were found to be breaching their obligations under property laws”.
The non-compliant agents were provided with educational information, reinforced warnings, and penalty infringement notices totalling $16,500 by the inspectors. The inspectors also found five licensees in charge that were failing to meet their supervision obligations, four of which were operating without the Secretary’s Supervision Guidelines.
NSW Fair Trading reiterates in their newsletter, “Strata managing agents must follow the Secretary’s Supervision Guidelines to properly supervise a business. This includes the steps they must take to prevent fraud, underquoting and misrepresentation.
”Licensees must also meet the requirements of section 32(3) and all other relevant provisions of the Property and Stock Agents Act 2002 and the Strata Schemes Management Act 2015.
”Licensees that fail to comply could be fined a maximum of 200 penalty units ($22,000) for a corporation, or 100 penalty units ($11,000) for other businesses.”
Licensees who run a business have a legal obligation to ensure the proper supervision of their business. It is vital that businesses are properly supervised, particularly as large sums of money and trust accounts may be involved.
Poor supervision can cause distress and financial loss for consumers. It can also lead to claims of negligence, misleading conduct and fraudulent use of trust money — for which substantial maximum penalties apply.
Licensees who run a business must ensure proper supervision in accordance with the Secretary’s Guidelines for the Proper Supervision of the Business of a Licensee (the supervision guidelines).
The supervision guidelines set out the requirements for proper supervision of a business, including the steps they must take to prevent fraud, under quoting and misrepresentation.
Ongoing inspections to be expected
NSW Fair Trading inspectors will continue to work with strata managers to ensure they understand their obligations. Inspectors will also be conducting inspections of other sectors of the property industry, including:
retirement villages
residential parks
property sale and managements
strata managements
conveyancers.
Read more about the supervision requirements of a licensee in charge of a NSW agency on the NSW Fair Trading website: