Recommendation 8: A Closer Look at No-Cause Termination and why this creates a voltage drop
The ACT Strata Review's proposal to allow no-cause termination of strata management contracts has attracted less scrutiny than the headline reforms. It deserves more. Here's what it would actually change for owners corporations - and what it might cost them.
Recommendation 8 is one of 33 proposals delivered by the ACT Legislative Assembly's strata inquiry on 29 April 2026. It proposes that the ACT Government consider permitting no-cause termination of strata management contracts,giving owners corporations the right to end an agreement at any time, without needing to provide grounds. This article examines what that change would mean in practice, where the risks sit, and which recommendation from the same inquiry better addresses the problems executive committees actually face.
The ACT Strata Review delivered 33 recommendations on 29 April 2026. Most of the conversation across the industry has, rightly, focused on the headline reforms — commissions, insurance, training. There's one further down the list that hasn't drawn as much attention, and it deserves more.
Recommendation 8 proposes that the ACT Government consider permitting no-cause termination of strata management contracts.
That would give owners corporations a new right: ending a strata manager contract at any time, for any reason, without needing to provide grounds. Whether that's the right tool for the problems executive committees face is a more open question than the recommendation makes it sound. It's worth working through before the legislation lands.
What no-cause termination would change
Ending a strata manager contract isn't currently impossible in the ACT. Section 54 of the Unit Titles (Management) Act 2011 already lets an owners corporation end a contract for breach, misbehaviour, bankruptcy, conviction (where it affects suitability), or insolvency. Termination is mandatory for incapacity or extended absence.
So owners corporations can already end strata management contracts. What they can't currently do is end them without giving a reason. That's the change Recommendation 8 would introduce.
The case the Strata Review heard
The recommendation didn't come from left field. The evidence put to the Committee included submitters who had been frustrated by strata managers refusing to accept the ending of a contract at its expiry, by termination provisions in standard contracts that read more in the strata manager's favour than the building's, and in some cases, by managers reportedly engineering AGM outcomes to reappoint themselves for fresh terms.
The frustration executive committees raised with the Committee is worth taking seriously, particularly in newer buildings, where committees often inherit a strata manager appointed by the developer rather than chosen by the owners.
The question is whether no-cause termination is the right response to those concerns, or whether the cost of the fix lands on the buildings it's trying to help.
What executive committees would carry
Four things worth thinking about, particularly for committees in buildings under three years old.
1. Transition risk and loss of building knowledge
One of the least discussed consequences of a more flexible termination regime is the transition risk it creates for owners corporations.
In commercial property management, onboarding and offboarding are treated as core competencies. A good manager is judged not just on how they run a building, but on how well they can hand it over — structured data rooms, clean document registers, indexed records, and a clear transfer of knowledge. Continuity is protected because the process is designed.
That discipline is largely absent in strata. In practice, the offboarding of a strata plan too often amounts to handing over a box of paper files or a bulk digital export - a shared drive filled with poorly named, inconsistently stored, and incomplete documents. Critical records are fragmented, email histories are lost, and the narrative of the building such as why decisions were made and what positions have been taken,is rarely captured in a usable way.
Each transition compounds the problem. Information degrades, context is stripped away, and gaps widen. By the third or fourth manager, the building is no longer operating from a complete or reliable record. The voltage drop at each transition becomes real with less clarity, less continuity, more risk.
For buildings with active issues - defects, disputes, or regulatory exposure - that loss of institutional knowledge is not just inconvenient. It can directly impact outcomes, weaken negotiating positions, and increase cost.
Introducing easier termination without first addressing how transitions are managed risks accelerating that decay. It makes changing managers simpler, but it does nothing to preserve the information and continuity that buildings rely on.
2. How strata management contracts get priced
Strata managers price for the work, but they also price for the predictability of the relationship. If a strata management contract can be ended at any point without reason, the rational industry response over time is to price in that uncertainty. That shows up as higher fees, narrower scopes, or less willingness to take on buildings that need real work.
The buildings most affected aren't the easy ones. They're the buildings with defects, complex governance, or difficult histories. The buildings that most need a stable manager are the ones that would feel the pricing change first.
3. Committee turnover
The committee that signs a contract isn't always the committee that wants to end it. Executive committees change. Priorities change. A right to terminate at will makes the management relationship vulnerable to whichever faction holds the committee in any given year, including factions that may not have the building's longer-term interests in view. Stability in the manager's tenure is one of the things that absorbs that volatility. No-cause termination removes that absorber.
4. The problem most executive committees actually have
The frustration executive committees voice about strata managers is rarely about ending the contract. More often it's "we don't know what we're entitled to," or "we don't have the documentation to act on what we know." The existing grounds in section 54 for ending a strata manager contract are broader than most committees realise. Strengthening committees' awareness of what they can already do and making it easier to act on it, addresses the real-world experience more directly than a new termination right would.
A more precise tool already exists
The same Strata Review that produced Recommendation 8 also recommended (Recommendation 6) that the ACT Government develop a standard template for strata management contracts. A standardised contract with equal notice periods, defined termination grounds, and clear obligations on both sides, that addresses the asymmetry concerns the Committee heard about with much more precision than no-cause termination does. It deals with the specific problem rather than reaching past it.
That's the recommendation worth getting behind.
Where this leaves executive committees
The Committee's wording in Recommendation 8 was that the Government consider the change. That word is doing real work. There's room for owners corporations, strata managers, and the Government to look hard at whether the diagnosis and the prescription line up - and whether the proposed reform helps the buildings it's meant to help.
For executive committees thinking through their position, the question worth asking isn't whether more rights sound appealing in the abstract. It's whether the building you live in - the building your committee is responsible for, is better served by a flexible exit, or by a stable relationship with someone who knows it.
For most buildings, particularly newer ones with active issues to work through, the honest answer is the second one.
What good looks like
If the objective is to give owners corporations more flexibility, it should be paired with a clear view of what "good" looks like in practice. The capability already exists within the broader property sector, and it's the standard that needs lifting.
At its core, good strata management is not just about day-to-day administration. It's about clarity of responsibility, visibility of performance, and continuity of information.
Strong, detailed management agreements
Good outcomes start with well-constructed management agreements. Scope should be clearly defined, with specific tasks, responsibilities, and service standards set out in plain terms. Ambiguity in contracts creates ambiguity in delivery. By contrast, detailed agreements provide:
- Clear accountability for both manager and committee
- Defined expectations around service delivery
- A practical foundation for performance assessment and, if required, termination
This is standard practice in commercial property management and provides a baseline level of professionalism that strata should be working toward.
Performance visibility through KPIs
What gets measured gets managed. A mature model of strata management includes a set of agreed Key Performance Indicators that give committees visibility over how their building is being managed. These don't need to be complex, but they do need to be consistent and meaningful.
Examples might include responsiveness, financial reporting timeliness, completion of agreed tasks, and progress on key issues such as defects or compliance matters. Importantly, KPIs shift the conversation:
- From subjective dissatisfaction to objective performance
- From reactive change to informed decision-making
In that environment, termination becomes a considered outcome of performance, not a first resort.
Standardised handover protocols
Where a change in manager does occur, the process should be structured, repeatable, and accountable. A minimum standard for handover should include:
- A defined checklist of required documents and records
- A clear transfer of active matters, including disputes, defects, and ongoing projects
- A structured summary of building history and key decisions
- A defined transition period to allow continuity
Without it, every transition introduces unnecessary risk. With it, transitions become manageable and predictable.
Centralised and standardised document management
Underpinning all of this is the way building information is stored and maintained. Good practice requires a centralised, structured, and accessible document repository - not fragmented emails, private drives, or ad hoc filing systems. Jurisdictions like New South Wales have already moved in this direction, recognising that ownership of records should sit with the building, not the manager.
A fit-for-purpose system should ensure:
- Consistent document naming and categorisation
- Secure but accessible storage for committee members
- Preservation of correspondence and decision-making history
- Continuity of records regardless of manager changes
This is the single most important control in preventing the loss of institutional knowledge over time. In combination, these elements do one thing well: they protect the building. They create clarity in how a manager is appointed, visibility in how they perform, and continuity in how information is preserved.
Without these foundations in place, increasing flexibility around termination risks addressing the symptom - dissatisfaction with managers, while leaving the underlying system unchanged.
Three things to know
The right already exists for cause. Section 54 of the Unit Titles (Management) Act 2011 already allows owners corporations to end strata management contracts for breach, misbehaviour, and other specified grounds - broader than most committees realise. Recommendation 8 would add termination without any grounds at all.
Easier exit doesn't fix the transition problem. Every change of strata manager risks a voltage drop in building knowledge - records lost, context stripped, institutional memory degraded. No-cause termination makes changing managers simpler without making the handover any safer.
Recommendation 6 is the more precise tool. Standardised strata management contracts with equal notice periods, defined termination grounds, and clear obligations on both sides, address the asymmetry concerns the inquiry heard about. That's the reform worth prioritising.
This article draws on the final report of the ACT Legislative Assembly's inquiry into the management of strata properties, tabled 29 April 2026. References to the Unit Titles (Management) Act 2011 are to the current ACT legislation. This article represents Vantage Strata's independent analysis and does not constitute legal advice.
Thinking about your management agreement?
Bring the conversation to us.
Whether you're reviewing your current arrangement or considering a change, we're happy to talk through what a well-structured management agreement looks like.
Start the conversation