00:00So, if you are one of the 2 million Australians living in apartments or townhouses, there's
00:08a good chance that you do use this contract.
00:12They are promoted by an industry-picked body called the Strata Community Association, or
00:18SCA, and this contract has been long marketed as the industry's best practice and standard.
00:26And that's why a lot of Strata firms across the nation, large and small, do use them.
00:31So why then might these contracts end up leaving apartment owners worse off?
00:36So what we have learned during this investigation from apartment owners, advocates, and specialists
00:42is that this type of Strata contract have really long legal documents with a lot of
00:47fine print.
00:48And this fine print will outline stuff like commissions or declare conflict of interest
00:55from the Strata managers, but oftentimes these contracts also include terms that offer
01:01your Strata manager indemnity, even if they neglect or require the owner's corporation
01:06to pay commissions on insurance, even if your Strata manager has nothing to do with
01:11securing that insurance policy.
01:13So one senior lawyer we spoke to really described this contract as appalling, disgraceful, and
01:20unfair to consumers.
01:22Okay, so if a group, a Strata group, want to terminate the contract, how can they do that?
01:29Is it easy?
01:30Oh, it's not easy at all.
01:31It often could cost them up to tens of thousands of dollars because they have to take their
01:36Strata manager to court in order to terminate them.
01:39It's also because the contract contains clauses that require mutual agreement to terminate
01:45the contract, or you have to prove in court that your Strata manager has indeed disappeared
01:49or refused to ratify the contract.
01:51Okay, and I know...
01:52So it's pretty hard.
01:53Yeah, and I know it's different between different states, the rules that each state and territory
01:58has and within each company.
02:01But what do experts, what have they been saying to you about the issue?
02:05So the fact that different states have different regulations is actually adding up to the problem
02:09as well.
02:10That's why many experts have called for comprehensive reviews across the state, asked the governments
02:16from different states to come in to provide a more balanced contract.
02:21And one expert actually pointed out there should be specific consumer protections built
02:25into this contract, and the government could also ban these unfair terms as a way to deal
02:31with it.
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