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[Jef]

Our Owners Corporation which has 19 lots is in the process of signing an agency agreement with a new strata manager (agent).

The draft contract has a clause (clause 6) which sets out the agent’s liability as follows: “The agent is excluded from all liability for any claim, liability or loss arising …. except to the extent …..” 

The clause is taken from a document with copyright by Strata Community Australia (NSW) Issue Version 2012.

In the case of a legal dispute could this clause cause the Owners Corporation to be held responsible for any claims, damages etc. by third parties that were contracted to do work etc. , the benefits of which would accrue to the Owners Corporation, irrespective of how diligent the new agency would act?

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[Jimmy-T]

Jef
Can you quote the entire clause, please? We can’t really judge without reading it.

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[Jef]

@Jef said:
Our Owners Corporation which has 19 lots is in the process of signing an agency agreement with a new strata manager (agent).

The draft contract has a clause (clause 6) which sets out the agent’s liability as follows: “The agent is excluded from all liability for any claim, liability or loss arising directly or indirectly out of the services or additional services or arising from any cause of action whatsoever except to the extent that the claim, liability or loss is caused or contributed to by the agent’s breach of the agreement, breach of statutory duty, negligence, dishonesty or fraud”.

“This clause applies to the extent permitted by law”.

The clause is taken from a document with copyright by Strata Community Australia (NSW) Issue Version 2012.

In the case of a legal dispute could this clause cause the Owners Corporation to be held responsible for any claims, damages etc. by third parties that were contracted to do work etc. , the benefits of which would accrue to the Owners Corporation, irrespective of how diligent the new agency would act?

 

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[Jimmy-T]

My reading of that clause is that, as long as the strata manager has done their job properly, they can’t be held liable for damages cause by any work that they have commissioned or contracted in good faith.  For instance, if they had contracted an unlicensed builder to do work, that would be negligent and they could be partially liable for any damages resulting from that.  However, if they have hired a licensed builder, with the full approval of the Owners Corp through an agreed tendering process, then if it all goes pear-shaped, the Owners Corp’s beef is with the builder, not the strata manager who hired them.

 

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