Strata commissioner’s $780,000 stake in property group in the spotlight

The NSW Strata and Property Services Commissioner — chargeable for overseeing strata governance and aiding in the regulation of the state’s property sector — has didn’t publicly disclose greater than 500,000 shares in a significant actual property and strata companies firm.

John Minns was initially appointed by the state authorities in November 2021. 

At the time, he instructed the public, through an official authorities biography, that he had “sold his interest in Independent Property Group in mid-2021”.

But a Four Corners investigation has confirmed Mr Minns’s household belief has continued to carry a big stake in the firm, price greater than $750,000.

In a proper interview with the program, he has admitted he nonetheless owns shares in the firm.

Asked whether or not his household belief “continues to own more than 500,000 shares” in the firm, Mr Minns stated: “That is correct.”

The Minister for Fair Trading, Anoulack Chanthivong, has requested for an pressing overview of the matter.

This yr, Mr Minns has been overseeing an investigation into excessive profile strata administration firm, Netstrata, following ABC revelations the company had been charging exorbitant insurance fees and taking an untold sum in industry kickbacks.

In May 2021, Mr Minns offered $3.1m price of Independent Property Group inventory again to the firm, however retained one other 558,776 shares, price round $780,000.

Mr Minns has instructed Four Corners that whereas this wasn’t disclosed to the public, the NSW authorities was totally conscious of his shareholding.

The firm operates primarily in the ACT, however held a NSW actual property licence till June final yr. 

Several of its staff proceed to function in NSW and maintain NSW licences.

Independent Property Group’s most up-to-date monetary assertion, obtained by Four Corners, exhibits the firm has earned greater than $8 million from strata and services administration work throughout 2022 and 2023.

Four Corners found that three weeks in the past, after Mr Minns was first invited to offer an interview to the program, Independent Property Group circulated a discover of a unprecedented common assembly which set out an organization plan to purchase again Mr Minns’s remaining shares.

This buy-back proposal is scheduled to be voted on by the firm’s different shareholders subsequent Wednesday. 

Mr Minns accepted it was attainable he might proceed to carry the curiosity if his fellow shareholders declined to purchase him out.

“I’d be very surprised if I don’t continue to hold them for longer than that.”

Strata specialist solicitor, Stephen Goddard, stated that in his opinion the failure to publicly disclose the shareholding was “a self-evident conflict”.

“The Strata and Property Commissioner is charged with a public duty of growing good public policy in the public interest for those living in the strata space. It’s of course a great disappointment to discover that same person has an interest, a commercial interest in the trading of apartments.”

During his interview with Four Corners, Mr Minns initially stated his published pledge — that he had offered his curiosity in the firm in mid-2021 — was mirrored by a proper pecuniary declaration to the authorities.

But he denied he had misled the authorities.

“The agreement was that I no longer had an interest in the business beyond what hadn’t been paid out [in 2021]. What I would have hoped [was] to have been further paid out much sooner than the three year period that we’re dealing with now.”

“I’ve made it very, very clear at all stages with the NSW government, and it was accepted by the secretary [of the department] at the time.”

The secretary at the time was Emma Hogan.

It’s not the first time that Mr Minns has hit the headlines. 

In July 2022, his position as Property Commissioner was terminated, eight months right into a two-year contract, on the foundation of a restructure of the division.

Three weeks later, Ms Hogan reinstated Mr Minns to his place with an annual remuneration bundle of $400,000.

Anoulack Chanthivong, the Minister for Fair Trading, stated: “All NSW public sector employees are required by law to abide by the NSW Code of Ethics and Conduct for government sector employees which sets out the rules for conflict-of-interest disclosures.”

“Under the Government Sector Employment Act, the Secretary of the Department of Customer Service is the employer of the Property Services and Strata Commissioner,” he stated.

“I have asked the Secretary to review this matter urgently.”

In October final yr, Mr Minns’s remit was expanded to additionally take accountability for overseeing the strata business.

In March, the ABC’s 7.30 program discovered Netstrata had been accepting rebates from suppliers and utilizing its personal agency to cost extreme brokerage charges.

While a typical brokerage charge is about 20 per cent of an insurance coverage coverage’s base premium, Netstrata’s insurance coverage arm was charging in extra of 60 per cent, with out disclosing that charge to house owners.

Since then, the ABC has seen proof that Netstrata was, in some circumstances, charging much more — as a lot as 110 per cent of the price of the premium.

The company’s managing director, Stephen Brell, was forced to stand aside from his position as the state president of the business peak physique, the Strata Community Association (SCA), after he admitted the conduct of his agency, recognized by the ABC, “made me feel really awkward”.

“I’m going to go back and look at our practices and make sure we tidy them up,” Mr Brell instructed the program at the time.

NSW Fair Trading subsequently launched an investigation into the firm. Without sufficient sources to conduct the inquiry itself, it introduced in accounting agency McGrathNicol to conduct the overview and required Netstrata itself to pay for it. 

The McGrathNicol report has but to be accomplished.

In June, the NSW authorities moved forward of the findings of the report and pledged to “stamp out bad behaviour” with a set of legislation reforms.

The modifications proposed are to extend most penalties that may be imposed on strata brokers, together with for the failure to reveal “information about commissions”, and strengthen the necessities to reveal conflicts of curiosity.

Since publishing its first stories about Netstrata, the ABC’s investigative unit has acquired about 2,000 submissions from unit holders round the nation. The overwhelming majority of those complaints seem well-credentialed.

The extent of the neighborhood’s unhappiness with the strata business casts a pall over the authorities’s plans to deal with the housing disaster by radically growing the variety of new residences that it’ll approve.

“We want to change the perception that strata managing agents easily, and readily, take advantage of owners, by significantly increasing the consequences for those who do the wrong thing,” Mr Chanthivong stated when he introduced the reforms.

“The new laws are designed to take immediate action to help restore confidence in living and investing in strata schemes, ensuring more people consider apartment living as a housing option.”

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