Any luck in changing strata management contract with unfair terms?

No, I have had no success in changing the strata manager’s terms.  My owners corp held a meeting and passed motions to change the strata manager’s terms were passed.  The consequence was that the strata manager resigned and we had to seek another strata manager.

When we sought other strata managers, their contracts appeared to be made from the same template.  It was the template from the Strata Community Association.  Again, we requested changes such as don’t give yourself a $500 spending limit on repairs without consulting the owners corporation.

Reason:  Tradies were charging $490 or $495 for work.  We did not know about it until we read them in our periodical financial statements.

The strata managers concerned were not willing to give us that concession.  They said it was too much trouble to call the owners for small jobs.

I don’t think options (a) and (b) are legally valid.  It is another way of expressing (c) Take it or leave it.

kaindub wrote:

There are new strata laws coming into effect soon. ( they have been passed by parliament and just waiting to be gazetted)

The new laws which will come in around November mean contracts will have to line up with National consumer protection laws, meaning any that are seen to unfairly disadvantage consumers – that’s us – can be challenged.

I believe SCA has already rewritten the standard strata management contract to reflect this.  If your strata manager insists on using the standard contract, make sure it’s the current one.

john888888 wrote:

Has anyone had luck with changing this or just been given the push back that a) its a standard contract that can’t be changed b) It was written by lawyer and can’t be changed c) these are the terms – take it or leave it.

All of the above arguments are very familiar and the only one that matters is the last one. Strata contracts are not holy scripture – they are a business agreement between two entities.  You don’t even have to have a strata manager (unless you are a very large building in Victoria).

I always laugh when I hear anyone say – oh, this was written by a lawyer and therefore it can’t be changed. Sez who? If the strata manager won’t, or says they can’t change the terms of the contracts (they probably can, they just don’t want to) then show them the door.  There are nearly 3,000 full-time strata managers in NSW and the Strata Community Association (SCA) has more than 200 companies on its books (and that’s only 75 percent of the industry). You must be able to find a strata manager who will make the compromises you need.

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?

Lawman wrote:

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 contacted SCA about this and this was their reply.

This agreement was updated as of February 2025 as part of SCA’s ongoing efforts to align with government reform, the Unfair Contract Terms Act, drive best practice and support continued reform across the strata industry.
Schedule 12 of the Property and Stock Agents Regulation 2022 noted terms specific to an agency agreement for management of strata or community title land that are to be excluded.
2A Terms excluded from agency agreement
(1) The agency agreement must not include a term or terms to the effect of the following—
(a) the owners corporation or association must pay for the agent’s professional indemnity liability, including insurance excess,
(b) the agent’s liability is limited to a specified monetary amount.
2A (2) states that subsection (1)(b) does not apply to an agreement covered by a professional standards scheme that has been approved by the Professional Standards Council, within the meaning of the Professional Standards Act 1994, and that is in force.
SCA (NSW) has a Professional Standards Scheme, therefore any member of SCA are able to have this term as they are undertaking the professional standards and requirements of the scheme instrument. This includes annual reporting of their professional indemnity, significant regular CPD education above the NSW Fair Trading CPD requirements.
For more detailed discussion or clarification, we recommend they contact the SCA (NSW) office directly to ensure they receive the most accurate and appropriate response to their concerns.

Lawman also  wrote:

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.

This is what SCA replied:

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.  It was increased from 2 years to 3 years and included reciprocal rights to both the agent and the owners corporation.

SCA Agency Agreement User Licence – Terms and Conditions
“The Corporate Member may make amendments to the SMAA template by hand alterations or by attaching special conditions to reflect terms agreed with specific clients. However, the Corporate Member does so at its own risk, is responsible for obtaining its own legal advice in relation to the implications of such amendments and releases SCA (NSW) from any liability in relation to such amendments.”

In short, get your strata manager to get the latest version of the contract from SCA and bear in mind that you can still make changes that you both agree on.