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Topic
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The 2024 edition of the SCA’s strata management agreement provides for automatic fee increases over the life of the agreement. Our contract is due for renewal soon and our manager wants us to sign the new form.
Are there competent and helpful management companies that don’t use this form?
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Replies
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Yes, there are! Even the company you are talking to, may be willing to use another contract, or to amend the one they have presented. Some strata management companies have their own contract, or use a “standard” contract that is provided by strata law firms or other institutions.
But if your issue is the cost varying according to the period of the contract, which has a maximum of 3 years (36 months), then ask for that clause in the contract to be struck out. In fact, I’ve seen a contract where the cost decreases depending on the term chosen – eg (say) $4,000 pa if the term is 3 years, $5,000 pa if the term is 2 years, and $6,000 pa if the term is for one year.
If the offered contract is still an issue, agree to sign it, with the term on 1 year. You can then renegotiate it each year, and hopefully, you can get the same price offered each time…
Note too, that there are rumours that the NSW govt, and the Dept of Fair Trading, may present a standard strata management contract that all strata managers will have to use (similar to the standard building contract). The provisions for this is now in the strata law. If you are finding contract terms and negotiations a problem, then you can lobby the Dept of Fair Trading, and especially its Minister to institute this, and provide a standard contract with set terms (although the strata manager will still be setting their own charging rates).
It’s reasonable that the fees would increase in line with inflation as the strata company has to pay for increased rent on its premises, increases in utilities and so on. Does your contract include an index that will be applied each year? If not, then you could try to negotiate that in (standard contracts can be adjusted).