Our strata manager has submitted a new strata management contract using the SCA form Version 2024. Clause 6.2 states the agent’s maximum liability shall not exceed any cap set by a scheme approved under Professional Standards Legislation and applicable to the agent. I asked the agent whether any such scheme had been approved and if so, what was the cap. He replied that the cap is $750,000. Is this right (it seems low)? I was also informed that the P I insurance for required for agents in NSW is just $1 million for one claim and $3 million in aggregate for all claim during the period of insurance. This is a significant drop from the $10 million cover required under our soon to expire current agreement (SCA form Version 2017) Has it been driven by changes to the Agents Act or regulations?
Clause 6.4 of the new form provides that the agent is discharged from all liability under contract, tort or otherwise at the expiration of 3 years from the date of the act given rise to the liability. When I said that this was unreasonable and that the agent should rely on the statutory limitation period like everyone else I got the response that they are not authorised to use the SCA agreement if they amend this wording. Sounds like BS to me. Are the insurers driving this change?