It was December 1980. I was 18, one week out of high school, and starting my first job as a law clerk on the Gold Coast. The Whitlam government’s no-fault divorce reforms were barely five years old, and the legal profession was still clearing out the wreckage of the old regime. My first assignment was to take the firm’s old divorce case files to the furnace at the Southport Hospital to burn them. Box after box of manila folders stuffed with graphic photographs taken by private detectives of naked men and women being unfaithful to their spouses, all assembled to meet the old standard that a marriage was irretrievably broken down.

Before 1975, if you wanted out of a marriage, you had to prove fault. You had to hire a private detective, gather evidence, and drag your spouse through a courtroom. The system did not protect marriages. It punished people for wanting to leave them. The Family Law Act ended all of that. Twelve months of separation. No blame. No evidence of wrongdoing. It was called radical at the time. Today it is common sense. Forty-six years later, strata management is still punishing clients for wanting to leave.

Why are owners corporations forced to prove fault before they can leave?

Owners corporations are forced to prove fault because standard strata management agreements across Australia lock them into terms of up to three years with no meaningful right to exit. If the relationship breaks down, the owners corporation must prove cause, negotiate a mutual termination the manager has no incentive to grant, or pay out the remaining term. Some managers threaten litigation. Others withhold books and records. It is preposterous that a client who is owed a fiduciary duty, the highest duty recognised in law, should beheld to a term-based agreement with no escape. Your accountant does not require a three-year lock-in. Your lawyer does not charge a break fee. Yet your strata manager can hold you hostage for thirty-six months and send you an invoice for the privilege of escaping.

Read: The Fiduciary Timebomb Ticking Under Your Strata Business Model

What happens when your good manager walks out the door?

What happens is that you lose the relationship that kept your building running, while the contract remains. The 2026 Macquarie Bank Strata Industry Benchmarking Report confirms that strata manager turnover sits at 24%, well above the national employment average of 15%. For the largest firms managing over 10,000 lots, the figure is 29%. When your good manager resigns, you do not get a say in who replaces them. You signed a contract with a company, but the service you valued was delivered by a person. That person is gone. You are paying the same fees for a fundamentally different service, delivered by someone you did not choose, and you cannot leave without penalty.

Read: Let’s Be Done With Pettifogging and Shackles: Rethinking Strata Management Agreements

Who profits from your captivity?

The managers and their financiers profit from your captivity. Strata management businesses are typically valued at up to 3.5 times the value of their contracted income stream. Every time an owners corporation signs a three-year agreement, it hands its manager a bankable asset for nothing in return. Those locked-in income streams are the security against which lending is advanced. If a business can only sustain its valuation by contractually preventing clients from leaving, the valuation is built on captivity, not quality. A business worth owning retains clients because it delivers outstanding service. Goodwill starts with the freedom to leave.

Read: Significant Support for Termination of Agreements Without Cause

What would Gough do?

Gough Whitlam would do what he did in 1975: recognise that forcing people to remain in broken relationships serves no one. At The Strata Professionals, we have taken the position that our standard management agreement has no lock-in term. Either party can terminate with reasonable notice, without penalty. If we are not delivering, our clients should be free to move on. If we are delivering, they will stay. The photographs I fed into that furnace in December 1980 were evidence of a legal system that had lost sight of its purpose. Lock-in strata contracts are evidence of an industry that has lost sight of its own.

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