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I’m looking for some feedback from strata owners who have been able to successfully negotiate changes to the standard NSW strata management agency agreement.
I’d also like to hear from strata managers on this subject.
I hadn’t seen this agency agreement until recently. It really is a one-sided contract, especially the liability clauses. In Australian Consumer Law (ACL), it would be classified as having “unfair contract terms”. But as owners corporations aren’t classified as small businesses, ACL doesn’t apply.
The reason I ask this question is because I’ve heard anecdotally that most strata management companies refuse to make changes to the agency agreement stating that it’s the standard contract from Strata Community Association (SCA) NSW.
I’ve found a good OCN document titled “Guide to Strata Management Agreement” at:
that suggests changes that you should make to the standard strata management agreement. But if most strata management companies refuse to make these changes, it doesn’t give strata owners a lot of options.
This problem seems to have been recognised in the “Report on the statutory review of the Strata Schemes Development Act 2015 and Strata Schemes Management Act 2015”:
where recommendation 57 is to amend the NSW SSMA 2015 as follows:
“The SSMA should be amended to include a prohibition on unfair terms in standard form contracts offered to owners corporations, mirroring the principles set out in Part 2-3 of Australian Consumer Law (ACL) and aligned with its monetary limits”
But who know how long that will take?
Strata schemes find themselves in the situation where the standard strata management agency agreement makes it almost impossible for the strata management company to be held liable for any costly screw ups. SSMA 2015 makes it hard for the strata committee to be held liable for anything. In both cases, liability always falls back to the owners.
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This has been a glaring hole in strata management contracts for decades and the strata managers’ professional body in its various iterations, previously fought tooth and nail to protect its members immunity from liability.
This included threatening to sue owners corps for copyright infringement if they tried to use the rest of their standard contracts with perfectly reasonable amendments.
However, the NSW SCA (the strata managers professional body) last year was accepted into the Professional Standards Scheme. This comes with certain self-regulatory commitments, including a review of their standard contract.
And we hear that Fair Trading is also looking at fixing that at the next strata law changes.
So the answer is, if your strata manager refuses to change the liability clauses in their contract, find one who will. They’re out there – just keep looking.
The opinions offered in these Forum posts and replies are not intended to be taken as legal advice. Readers with serious issues should consult experienced strata lawyers.
Then why do strata managers have to buy professional indemnity insurance?
Find a new strata manager? Impossible! I’ve never met anyone who has recommended a strata manager. Be that their past or present one or by word of mouth. Ideally, SMs should be rated with a star system made available on a respectable website.
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