3.7 How long a contract period? | Owners Corporation Network

3.7 How long a contract period?

Strata managers prefer contracts for two or more years so as to be financially secure and spread their costs. Strata managers’ costs are usually greater in the first year of managing a scheme, so they will naturally be wary of only being signed up for one year and you may pay more for the privilege.
to ensure good governance: It is very easy for one owner with an agenda or a minor misunderstanding to derail an otherwise good working relationship between a strata manager and a strata scheme. Strata managers are not immune to the arrows of strata politics, and may be easy scapegoats. To ensure that there is time to communicate, resolve and rectify minor issues or misunderstandings a longer term contract is desirable for good governance.

On the other hand if you contract for a longer term and your strata manager does not provide the expected level of services you have a problem. Between one to three years are common and practical initial terms (where you cannot terminate except under exceptional circumstances) and then continue month-to-month afterwards with a 3-month in writing notice period.