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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?
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?