Strata owners’ rights in NSW, a guide by Dotto

Line 02 of 07 · The management agreement and its term

The management agreement and its term

An NSW owners corporation appoints a strata manager by majority vote at its annual general meeting, or at an extraordinary general meeting if the owners can’t wait. An appointment made at the scheme’s very first AGM can last only 12 months; after that, a management agreement can run for up to three years.

General information. This page explains NSW strata law in plain words. It is not legal or financial advice. NSW Fair Trading’s strata pages hold the current rules, and a solicitor can advise on a particular scheme.

Before the vote

Fair Trading sets out the steps it suggests to an owners corporation choosing a strata manager. In order:

  1. A shortlist

    Three or more strata managers or agencies that service the area, which Fair Trading’s free Strata manager finder in Strata Hub can help find.

  2. The jobs to delegate

    Decided before candidates are approached, normally by the strata committee, with Fair Trading’s Strata managing agent engagement planner as a guide.

  3. Proposals compared

    At least three, weighed on who would manage the scheme and their experience, how responsive they are, what the fees cover, and what the contract says about changing manager before it ends.

  4. The draft agreement

    Fair Trading notes that every term can be negotiated, even when a contract is described as having “standard terms”. Before the AGM, the secretary must attach the preferred agency’s draft agreement to the agenda. Where expected fees exceed $30,000, the agenda must carry two independent draft management agreements, attached by the secretary.

  5. The meeting

    A majority vote appoints the manager. The strata manager’s contract is one of the documents that must go out with the meeting notice when a manager is to be appointed.

What an agreement can’t say

Since 1 July 2025, two kinds of term are banned in strata management contracts:

  • a term requiring the owners corporation to pay for the agent’s professional indemnity liabilities, including an insurance excess
  • a term capping the agent’s liability at a fixed amount, allowed only where a professional standards scheme covers the agreement and the Professional Standards Council has approved that scheme

Also from 1 July 2025, an unfair term is banned in a standard form contract for goods or services supplied to an owners corporation, if the contract was made on or after that date or has been renewed or varied since; the ban does not reach a term that sets the upfront price, defines the main subject matter, or is specifically required or permitted by another law. Fair Trading’s example of a term that may be unfair is one that loads the owners corporation with excessive charges for ending the agreement. A copy of the agreement must be available to the owners corporation at all times.

The term, drawn out

An example three-year management agreement on a timeline A bar runs from month 0 to month 36. The stretch from month 30 to month 33 is shaded as the window in which the agent must give notice that the agreement is ending. After month 36, two dashed blocks of up to three months each show extensions the strata committee can grant until the next AGM. 01224303336 months AGREEMENT IN FORCE Expiry notice window Committee extensions up to 3 months at a time
An example only: a three-year agreement, with the notice window placed between six and three months before it expires, and committee extensions after it.

A strata manager must give notice that its agreement is expiring between three and six months before the expiry date. It can be appointed again after the old agreement ends, by a vote at an owners corporation meeting such as the AGM.

If the contract ends before the next AGM, the strata committee can extend it by up to three months at a time until the AGM is held. The manager must give at least one month’s notice before an extension ends, and if the committee decides not to extend again, or not to reappoint, it must give the manager at least one month’s written notice.

In one narrow case the manager can extend the agreement itself, by an extra three months, telling the owners corporation in writing: where the agreement was for three years, the owners corporation chose not to reappoint and doesn’t want to extend, but did not give the manager three months’ written notice that the contract would not be renewed.

Ending an agreement early

Fair Trading lists reasons an owners corporation might remove a strata manager: ongoing trouble contacting the manager, facilities not being maintained, finances not being managed properly, and commissions not properly disclosed. The contract itself says when and how it can be ended, including any early termination conditions.

Removal takes a motion passed by majority vote, at the next AGM or at an extraordinary general meeting called sooner. If it passes, the owners corporation must tell the manager in writing, and there is a handover to the new manager, or to the strata committee if there isn’t one.

The scheme’s records belong to the owners corporation, and a manager who is not reappointed must hand them to the new manager or the owners corporation. The owners corporation can also apply to the Tribunal to change or end an agreement, for example over its terms; since 27 October 2025 that includes where the manager acts unlawfully in the role.

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