Governments in Victoria, the ACT, and New South Wales are considering prescribed forms of strata management agreements, and 30-day termination without cause rights are on the table. The debate is heating up, and the pushback has started.

I have been promoting no lock-in contracts for The Strata Professionals Group for over a year now. The industry response has been instructive. One manager accused me of cheapening the profession. An altogether more respectable group has published a lengthy rebuttal. I disagree with their position, but I respect that they have engaged with the argument rather than just attacking the messenger. Government officials and academics are in the conversation too. The only group not pushing back? Owners feeling trapped in contracts that are not working for them.

Read: Your Strata Agreement Was Written to Protect the Manager, Not You

What does a broken contract actually look like?

A broken contract looks like a strata that cannot leave, even when the relationship has failed. A case crossed my desk last week that illustrates this precisely. A strata management company was appointed to a large scheme three years ago and renewed their contract for a further three years without the committee's full attention. What eventually came to light was that the ATO had never been notified at the time of the original appointment. No tax returns had been lodged for four years.

A breach like this can, technically, be fixed. The manager admits the mistake, lodges the returns, pays the fines. Done. What cannot be fixed is the loss of trust and confidence that the manager is capable of running the scheme. And yet, under a standard long-term agreement, that strata is stuck. The relationship has broken down. The contract has not.

Read: Trust or Bust: How Radical Transparency Can Save Your Strata Management Reputation

Why do long-term contracts protect the wrong party?

Long-term contracts protect the wrong party because they are structured to insulate the manager from the consequences of service failure. The typical multi-year agreement with no exit clause was not designed with the owners corporation in mind. It was designed to secure revenue. Most owners corporations do not know what they have signed, and many managers rely on that.

Mistakes happen in every business. I have made my share. Relationships sour. Friendships end. Things run their course. When they do, the parties must be free to move on, without penalty, without rancour, and without a lawyer's letter threatening litigation if you try to leave.

Read: Caught in the Crossfire: How Standard Agreements Turn Strata Delegation into a Professional Disgrace

Who actually needs a lock-in contract?

The only managers who need a lock-in contract fall into one of two camps. The first are those not confident enough in their own service to let clients stay by choice. If your value is real, a client does not need to be contractually restrained from leaving. The second are those too invested in old thinking to challenge the status quo: managers who have operated under multi-year agreements for so long that the arrangement feels normal, even reasonable, because it has always been that way. It has not always been right.

Every other professional service inAustralia operates without locking clients in for years at a time. Lawyers, accountants, financial planners. You can change any of them at will. The argument that strata management is somehow different has never been convincingly made.

Does a fair exit clause cheapen the profession?

A fair exit clause does not cheapen the profession. Quite the opposite: it defines it. A contract that allows owners to leave when a relationship stops working is not a threat to good managers. It isa statement of confidence in your own ability. It says: we are good at what we do, and we trust you to recognise that.

Governments are moving on this. Academics are writing about it. Owners are asking for it. The managers who adapt early will be the ones who benefit most from the shift. The ones who resist will find themselves defending a position that is becoming harder to hold, in industry forums, in government submissions, and eventually, in law.

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