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Under the new legislation, our strata manager is requiring us to sign a new 3 year agreement. They’ve presented us with the Strata Community Australia (NSW) model agreement which has a Clause 6, Liability of the Agent and Exclusions, which is unacceptable to us. This clause indemnifies the agent from any liability for any claim except where gross negligence, dishonesty or fraud is involved.
We have been advised in writing by the strata manager that the proposed agreement is a copyrighted contract and therefore they can’t amend it. They have referred us back to Strata Community Australia (NSW) but have also stated they will not accept an amendment. Under consumer law a person is protected against signing a contract that is not in their interest – is there any similar protection under strata law?
What advice would you give us.
Thank you.
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Maybe others have more learned views than me but my comments are:
What are the other rights beside “gross negligence, dishonesty or fraud” that the OC is being asked to sign away?
Consumer law protects a person from signing away rights that the law gives them. If a consumer signs a contract giving up their warranty rights that is not enforceable against the consumer so they still have warranty rights.
I am not exactly what rights you are referring to for your strata agreement but if you are not happy what happens if you just don’t sign it?
Maybe approach the department of fair trading and see what they say.
First of all, the SCA standard contract is basically fair and reasonable but there may be terms (like ‘fair and reasonable’) that are a little too loose for some tastes – especially those who have had their fingers burned in the past.
I believe the Owners Corporation Network (OCN.org.au) has been wrestling for some years over the standard strata manager’s contract. And for as long as I can remember, the SCA has been using the copyright argument to prevent anyone from altering the contract.
Personally, I think the copyright argument is self-serving BS and the SCA really needs to get over itself. If your customers want something that isn’t in their interests and it doesn’t bother the strata manager, why not put a line through the offending clause and be done with it?
To get back to the OCN, I believe members can get access to their strata manager contract, so give them a hoi!
And it’s worth getting this right. Despite all the complaints about strata managers that we get and some serious issues of mismanagement and even corruption that have been reported to Fair Trading, the number of Strata Management licenses revoked (for misdeeds as a strata manager) is ZERO.
In short, Fair Trading will not look after you if you get a rogue strata manager – the kind that do the one-week course then start charging like wounded bulls. So you need a watertight contract.
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You don’t have to use SCA standard agreement. Our SM agreement ‘liability’ clause (no 9 in our agreement) begins with –
“Except to the extent that the relevant liability is caused by the Agent’s negligence or dishonesty and to the extent permitted by law, the Scheme releases the Agent from and indemnifies the Agent in respect of ……”
Several years ago our OC’s management agreement with Independent Property Group was a standard (ACT) agreement with the SCA logo in the top left corner of the first page. The AGM noticed an asymmetry between ‘Termination by the OC’ and ‘Termination by the agent’ clauses: They did not have to give us as much notice as we had to give them. The AGM decided to appoint the manager subject to changing the required notice to being 28 days for both parties. The manager agreed to the change which was made by hand on the standard form and initialed. It was just a matter of crossing out the printed ’14’ and writing ’28’ instead with the change initialed on each copy.
Perhaps what the agent really means is that the agreement is only available to the managing agent electronically and locked down with only some flelds editable. If they are young they might not be aware of an old-fashioned but more flexible technology known as ‘hand-writing’. 😉
I also have great objection to clause 6 of the SCA standard agreement, particularly the provisions which (a) limit the agent’s liabilty to the amount of the agreed service fee for the year in which the liabilty was incurred and (b) state that no claim at all can be made against the agent after the date being two years after the agreement terminated.
Two agents I dealt with last year agreed to alter the clause to the (less objectionable) form it was in prior to the 2016 Version of the agreement but the agent who has made a submission for our business this year has refused to amend the agreement on the basis that he “can’t make changes to the agreement as that would be a breach of our licence agreement with the SCA”. This sounds like a variation on the breach of copyright argument referred to in Post 1.
I agree with Jimmy that this argument is self-serving BS and I think the clause is unfair and a breach of the Australian Consumer Law.
Does anyone know whether it’s been tested before the ACCC?