Do we need a new form of Strata Management Agreement ?

If we are doing building work in strata (in NSW)  we  don’t have to use the Master Builders Association ( or any other trade body) agreement, because there are pro forma Fair Trading Agreements available for residential building work.

But we have no such Fair Trading Strata Management Agreement. Where is it ?

80% of the time strata schemes have little option but to use the SCA template agreement – an agreement prepared by the strata manager’s trade association.

We need a neutral agreement that is not weighted in favour of one party or the other. Too many owners accept the current agreements after being told it is” the industry standard”, – whatever that means – and then proceed to sign an agreement that indemnifies  their strata manager beyond all reason, and makes it near impossible for the OC to  terminate the agreement without penalty, no matter how poor performance levels are.

I would be very interested to hear

Of any schemes who have drawn up a commercially negotiated agreement with their Strata Manager
Of any schemes which have substantially modified the liability and indemnification provisions of the SCA (clauses 6 & 7 ) or similar agreements

We have completed a number of tenders for strata management. Against a background of the success we have had in eliminating some of these lop sided provisions, we have had to contend with  responses from certain  strata management companies along the lines “we can’t change the standard agreement – it would invalidate our professional liability insurance”. This is not only highly questionable, but it’s also apparent that a strata scheme, that is prepared to stand up for fair & reasonable deletions and amendments, will most likely get their strata managers to roll over and agree.

Win or lose this sort of wrangling by volunteer committee members v strata professionals should not be necessary just to get the core functions of  a scheme properly managed. Can we push for a fair “Fair Trading”  template Agreement or is there anyone else out there who could contribute to help build one ?

John Hutchinson

m: 0418 797470  e: john.hutchinson@strataanswers.com.au
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