Switching strata managers is one of the most significant governance decisions an OC can make. Done well, it brings fresh expertise, better communication, and improved outcomes for the scheme. Done poorly, it can leave the OC exposed to breach of contract claims, gaps in management, and messy handovers. This guide explains the legal framework, the step-by-step process, and what to watch for at every stage.

When switching makes sense

Dissatisfaction with a strata manager is common, but switching is not always the right immediate response. Before committing to a change, it is worth being clear about what the problem is and whether it can be resolved with the existing manager.

Common reasons OCs consider switching

• Persistent communication failures: calls and emails go unanswered for days, or owners cannot get straight answers
• Failure to action maintenance and repair requests, leaving common property in disrepair
• Errors in financial management: incorrect levy notices, unexplained charges, or financial reports that do not reconcile
• Non-compliance with the Act: meetings not called properly, minutes not distributed, records not maintained
• Lack of proactive guidance: the manager does not advise the committee on legal obligations, upcoming deadlines, or emerging issues
• Loss of trust following an incident, a complaint, or a regulatory finding
• The scheme has grown or changed and the current manager no longer has the capability or resources to handle it

Before you decide to switch

If the issues are specific and recent, consider raising them formally with the manager's principal or complaints team first. Put the concerns in writing, give a reasonable timeframe for improvement, and document the response. A formal complaint creates a paper trail that may be relevant if the situation escalates to a breach of contract claim. It also gives the manager a clear opportunity to address the problem, which the OC may be required to show it provided before seeking early termination.

If after a genuine attempt to resolve the issues the manager's performance does not improve, or if the issues are fundamental and ongoing, proceeding with a switch at the end of the contract term is the most straightforward path.

Audience	Relevance	Why it matters
Strata committee members	Critical	The committee initiates the process, obtains quotes, and recommends a new manager to owners. It cannot terminate the contract by itself.
Lot owners	Important	Only owners at a general meeting can authorise termination and appointment. Your vote matters.
Owners who are dissatisfied	Directly relevant	If you have concerns, raise them at a committee meeting or put a motion to the next general meeting requesting that quotes be obtained.
Prospective buyers	For information	Strata management quality is a signal of building health. You can review meeting minutes and the management agreement as part of your pre-purchase due diligence.

Understanding your current contract

The single most important step before doing anything else is reading your existing strata management agreement. The contract controls almost everything about how and when you can terminate. Assumptions about what is permitted are frequently wrong.

Contract term limits under the Act

Under Section 50 of the Strata Schemes Management Act 2015 (NSW), strata management agreements are subject to the following term limits:

• First appointment at the first AGM: maximum term of 12 months.
• All subsequent appointments: maximum term of 3 years.

An agent appointed for 3 years has an automatic right under the Act to extend their appointment by up to 3 months after the end of the term if the OC has not given at least 3 months' written notice of its decision not to reappoint. This is an important provision: if the OC fails to give timely notice, the agent can exercise this extension option automatically.

The 3-to-6-month notice requirement

Under Section 50(6) of the Act, the agent must give the OC written notice of the approaching end of the appointment at least 3 months but not more than 6 months before the expiry date. This is the signal for the OC to consider whether to reappoint or make a change. If the OC decides not to reappoint, it must give the agent at least 3 months' written notice of that decision before the end of the term.

Early termination: the difficult path

Terminating a management agreement before it expires is significantly harder than waiting for natural expiry. Mid-contract termination is generally only available in the following circumstances:

• Breach of contract: The agent has failed to perform a material obligation under the agreement and has not remedied the breach within 28 days of receiving written notice requiring it to do so.
• Insolvency: The agent company is wound up or enters administration.
• Loss of licence: The agent loses their licence to act as a strata managing agent.
• Mutual agreement: Both parties agree to terminate early. Some agents will negotiate a mutual exit, particularly if the relationship has broken down.
• NCAT order: Under Section 72 of the Act, NCAT has the power to terminate or vary a strata management agreement if the agreement is oppressive or the agent has engaged in conduct that warrants it.

New protections from 1 July 2025: unfair contract terms

From 1 July 2025, unfair contract terms in standard form strata management agreements are banned under Australian Consumer Law as applied to strata. A term is unfair if it creates a significant imbalance between the parties, is not reasonably necessary to protect the agent's legitimate interests, and would cause financial or other loss to the OC if applied. Examples of potentially unfair terms include:

• Terms requiring the OC to pay excessive exit fees or penalties for early termination
• Terms that automatically roll over the agreement for another full term without the OC's affirmative consent
• Terms that require the OC to pay for the agent's professional indemnity insurance or insurance excess
• Terms that unfairly limit the agent's liability to a specific amount

If your management agreement contains terms of this kind and was entered into or renewed on or after 1 July 2025, those terms may be void. You can raise this with the agent and, if unresolved, seek a determination from NCAT.

The step-by-step process for switching

Step	Action	Detail
1	Read the current contract	Obtain a copy of the current management agreement. Identify: the expiry date, the notice period required for non-reappointment, the grounds for early termination, any exit fees or financial obligations, and whether the agreement contains any terms that may be unfair under the 1 July 2025 reforms.
2	Confirm the committee's position	The strata committee cannot terminate the contract or appoint a new manager by itself. But it can lead the process: discuss the situation at a committee meeting, agree to proceed with obtaining quotes, and resolve to recommend a change to owners. Document this committee decision in the minutes.
3	Obtain quotes from prospective new managers	Get at least two quotes from prospective new managers. Review not just the fee structure but the proposed contract terms, services included, response time commitments, and the manager's track record with similar schemes. From 3 February 2025, all new agreements must include itemised insurance disclosure — check prospective managers are compliant with this.
4	Draft the meeting motions	Two separate ordinary resolutions are needed at the general meeting: one to terminate the existing agreement (in accordance with its terms), and one to appoint the new agent. The new agent can provide draft motions. Before the meeting, the secretary must attach the proposed new management agreement to the meeting agenda so owners can review the contract terms before voting.
5	Give the outgoing agent formal notice	Before or at the same time as the general meeting, give the outgoing agent written notice in accordance with the contract. If the contract is expiring, give at least 3 months' notice of non-reappointment. If terminating for breach, serve a written notice specifying the breach and providing 28 days to remedy it before termination takes effect.
6	Hold the general meeting and pass the resolutions	Both resolutions require only an ordinary majority (more than 50% of votes cast). Ensure the meeting satisfies notice, quorum, and voting requirements under the Act. The meeting can be an AGM or an extraordinary general meeting. Using the next AGM avoids the cost of a separate meeting, but a general meeting can be called if the matter is urgent. Owners can also vote by proxy or electronically if the OC has resolved to permit this.
7	Sign the new agreement	Once the resolutions pass, sign the new management agreement with the incoming agent. The new agent will then issue a formal appointment notice to the outgoing agent. Agree on a transition date with both parties.
8	Manage the records handover	Under Section 62 of the Act, the outgoing agent must provide all records, documents, and information held on behalf of the OC to the incoming agent or the OC on termination. This includes all financial records, correspondence, contracts, by-laws, strata roll, AGM and committee minutes, insurance documents, levy records, and any pending matter files. A handover with a cooperative outgoing agent can take a few weeks; a difficult handover can take longer.
9	Notify relevant parties	Once the new agent is in place, ensure all direct debit authorities, bank account signatories, and insurance certificates have been updated to reflect the new agent's details. The OC's listing on the Strata Hub annual reporting system should also be updated.

Evaluating prospective managers

Choosing a new strata manager is as important as removing the old one. A poor transition that installs an equally unsuitable manager solves nothing. Take the evaluation seriously.

What to look at	What to ask / check for
Licensing and compliance	Is the agency and individual manager licensed under the Property and Stock Agents Act 2002 (NSW)? You can verify licence status on the NSW Fair Trading public register.
Portfolio size and staffing	How many schemes does this manager handle? How many schemes per manager? A manager with an overloaded portfolio will deliver the same problems you are trying to escape.
Experience with similar schemes	Does the manager have experience with schemes of your size, building type, and complexity? A 200-lot high-rise has different needs from a 6-lot villa scheme.
Fee structure	Is the management fee fixed or variable? What is included in the base fee and what is charged additionally? Ask for a fully itemised quote that separates all components.
Insurance disclosure compliance	From 3 February 2025, all insurance quotes must be itemised to show base premium, commission, and broker fees. Does the prospective manager comply with this?
Contract terms	Review the proposed agreement carefully. Is the term no more than 3 years? Are exit provisions reasonable? Are there terms that may be unfair under the 1 July 2025 reforms?
Communication standards	What are the manager's committed response times? Is there a 24/7 emergency line? Is there a portal or app for owners to access documents and lodge requests?
Technology and reporting	How are financial reports produced? How are levy notices issued? Can owners access records online? Is the manager integrated with Strata Hub for annual reporting?
References and track record	Can they provide references from schemes of similar size and type? Are there any regulatory findings or complaints on the public record against the agency?
Transition plan	How will they manage the handover from the outgoing agent? What is their standard process for onboarding a new scheme?

The records handover: what to expect and how to protect the scheme

The handover of scheme records is often the most practically challenging part of switching managers. Problems here can leave the incoming manager without the information needed to run the scheme properly, and can cause significant disruption for owners.

What the outgoing agent must hand over

Under Section 62 of the Act, when a strata managing agent ceases to hold an appointment, they must provide the following to the OC or incoming agent:

• All financial records, including bank statements, levy records, receipts, and disbursements
• All correspondence relating to the scheme, including emails and letters
• The strata roll (the register of all lot owners, tenants, and their contact details)
• All meeting minutes, AGM and general meeting papers, and committee resolutions
• Copies of all contracts, warranties, and service agreements the OC is party to
• All insurance policies and certificates of currency
• Building plans, specifications, and any compliance or fire safety documents
• By-laws and any registered by-law amendments
• Any pending matter files, including outstanding maintenance orders, NCAT applications, and debt recovery matters

Protecting the records during the transition

Before giving notice of termination, the committee should take the following protective steps:

• Request a complete index of all documents held by the current manager and compare it against what is ultimately provided
• Ask the incoming manager to assist with drafting a records request checklist, as they will have done this before
• Check that the OC has a copy of all current insurance policies and confirm the renewal dates, so coverage is not accidentally allowed to lapse during the transition
• Confirm the OC's bank accounts are in the OC's name, not the manager's, and arrange to change the authorised signatories and direct debit authorities promptly
• Check that the levy arrears schedule is provided in full so the incoming manager can resume recovery action on any outstanding debts without delay

How the 2025 reforms affect your choice of manager

The NSW strata law reforms introduced between 2024 and 2025 significantly changed the obligations of strata managing agents. Understanding these reforms helps committees evaluate whether their current manager is compliant and what they should expect from any new appointment.

Disclosure obligations (from 3 February 2025)

Strata managers must now disclose, before and during appointment:

• All connections with suppliers and developers they routinely use, including the nature of those relationships
• Whether they have provided advice about the strata plan or scheme to the building developer in the past two years
• Any new connections or interests that arise during their appointment, in real time
• Detailed, itemised breakdowns of all insurance quotes, including commission amounts, broker fees, base premium, and GST separately stated

Strata managers are banned from receiving a commission or non-approved benefit related to insurance contracts unless it is included in the management agreement and specifically approved by the OC. Penalties for non-disclosure can reach $55,000 in court-imposed fines.

Annual reporting requirements

Strata managers must provide the OC with an enhanced annual report detailing all supplier and developer connections during the reporting period. This gives OCs a regular, documented view of the manager's financial relationships and any potential conflicts of interest.

Banned contract terms (from 1 July 2025)

Standard form management agreements entered into or renewed from 1 July 2025 cannot contain:

• Terms requiring the OC to pay for the agent's professional indemnity insurance (including insurance excess)
• Terms that unfairly limit the agent's liability to a specific monetary cap (unless covered by a professional standards scheme approved by the Professional Standards Council)
• Any other term that is unfair under Australian Consumer Law

If a prospective manager presents you with a contract containing these terms, ask for them to be removed. If they refuse, this is a significant red flag about how they intend to operate the relationship.

Agent notification of contract expiry

Under Section 50(6) of the Act, the agent must give the OC written notice of the impending end of the appointment between 3 and 6 months before expiry. If the agent fails to give this notice, the OC is not penalised — the agent is. This means the OC can still act to switch without having received the formal notice, provided it gives its own timely notice of non-reappointment.

Frequently asked questions

Can the strata committee terminate the agreement without a general meeting?

No. Under Section 50(3) of the Act, termination of a strata managing agent's appointment must be authorised by a resolution at a general meeting of the OC. The strata committee does not have the power to terminate the agreement on its own. If the committee purports to terminate without a general meeting resolution, it is acting outside its authority and the termination may be invalid, potentially exposing the OC to a breach of contract claim.

Our AGM is 8 months away. Can we call a general meeting to switch sooner?

Yes. A general meeting can be convened by the secretary or the strata committee at any time. Alternatively, owners holding at least one-quarter of the total unit entitlements in the scheme can requisition a general meeting. A general meeting carries additional costs for printing and distribution, so it is worth weighing whether the urgency justifies those costs. If the current manager's performance is causing significant harm to the scheme, a general meeting is entirely appropriate.

The current manager is also managing the meeting at which we want to terminate them. Can they refuse to put the motion on the agenda?

The manager cannot lawfully refuse to include a properly submitted motion on the agenda. Under the Act, any owner can require a motion to be included in the agenda for the next general meeting by giving written notice to the secretary. If the secretary happens to be the strata manager, they must include it. If there are concerns about the manager's conduct in managing the meeting, the committee can elect a chairperson at the start of the meeting who is independent of the outgoing manager, and owners can exercise their right to participate by proxy if they cannot attend.

The outgoing manager says we owe exit fees. Do we have to pay?

That depends entirely on your contract. If the contract includes a legitimate exit fee clause and the circumstances of termination trigger that clause, you may be liable. However, if the contract was entered into or renewed on or after 1 July 2025 and the exit fee is excessive, it may constitute an unfair contract term that is void. Even for older contracts, a fee that is entirely disproportionate may be challengeable at NCAT. Get legal advice before paying any exit fee you believe is unreasonable.

The outgoing manager is slow to provide records. What can we do?

Send a formal written demand specifying all records required and setting a reasonable deadline, typically 14 days. If the agent fails to comply, the OC can apply to NCAT for an order under Section 62 of the Act requiring the records to be provided. NCAT can act relatively quickly in these situations, particularly where the delay is causing operational harm to the scheme. Your incoming manager can assist with drafting the NCAT application.

We want to self-manage after switching. Is that possible?

Yes. An OC can choose to manage its own scheme without appointing a professional strata manager. This works best for small, low-complexity schemes where committee members have the time, skill, and interest to manage the administrative requirements. Self-management requires the committee to fulfil all the legal obligations the manager would otherwise handle: holding meetings, maintaining records, issuing levy notices, managing insurance, and complying with the Act. For most schemes of any significant size or complexity, self-management carries substantial compliance risk. If you are considering this option, seek advice from NSW Fair Trading or a strata industry association before proceeding.

Can we appoint Netstrata directly, or do we need to go through a general meeting first?

The appointment must be authorised at a general meeting. Netstrata can assist by providing the termination and appointment motions in advance, so the committee can prepare the agenda items and communicate with owners before the meeting. Once the resolution passes at the general meeting and the new agreement is signed, the formal appointment takes effect. Netstrata's transition team then works with the outgoing manager to manage the records handover and gets the scheme operational on our systems as quickly as possible.

Related reading

• Meetings and voting: democratic processes and procedures — learning.netstrata.com.au
• What the latest strata law changes mean for owners in 2025 and 2026 — learning.netstrata.com.au
• Disputes and resolution: conflict resolution processes — learning.netstrata.com.au