NSW: Can a pre-2003 caretaker deal escape the 10 year cap?

Question: Is a caretaker agreement that’s been extended by deeds since 2003 still bound by the 10 year contract cap?

We have a caretaker agreement which has been extended by 10 year deeds since 2003 without going to tender. The strata committee feels legally pressured to keep it in place by the caretaker. The last deed was signed in 2022 and before that, in 2016.

I understand that the 10 year rule was introduced in 2015, so can a lot owner like me complain to NCAT and have the agreement/deed terminated retrospectively to the 2016 deed?

Answer: A pre-2003 caretaker agreement stays protected from the 10-year cap unless materially varied since.

Any caretaking agreement entered into after 10 February 2003 (including any option periods) will automatically expire 10 years after commencement unless it terminates earlier in accordance with its terms.

The only circumstances in which legacy issues generally arise are where agreements were entered into before 10 February 2003 and contain multiple extension or renewal options.

The 10-year cap was introduced on 10 February 2003 through the insertion of section 40B(2) of the Strata Schemes Management Act 1996:

40B

1. A caretaker is required to be appointed by an instrument in writing (a caretaker agreement) executed before or after the strata scheme commenced by the caretaker and:
2. Unless it expires or otherwise ceases to have effect earlier, a caretaker agreement (including any additional term under any option to renew it) expires:
   1. at the conclusion of the first annual general meeting of the owners corporation, if the agreement was executed by the original owner, or
   2. when 10 years have expired after it commenced to authorise the caretaker to act under it, in any other case.

However, clause 12 of Schedule 4 contained transitional provisions which preserved certain pre-existing agreements:

12

1. Any agreement that was in force immediately before the commencement of Part 4A of Chapter 2 that, if entered into after that commencement, would be a caretaker agreement is taken to be a caretaker agreement appointing a caretaker.

2. section 40B(2) does not apply to such an agreement, and

Accordingly, agreements that were already in force before 10 February 2003 were protected from the operation of the 10-year cap.

The transitional provisions in the Strata Schemes Management Act 2015 did not displace these earlier savings provisions.

The Specific Query

The query does not clearly identify the relevant factual circumstances. In particular, it is unclear whether:

• the agreement was originally entered into before 10 February 2003 and the subsequent extensions have merely involved the exercise of existing options; or
• a new agreement has been entered into at some point since then.

If the agreement remains a pre-2003 agreement and the subsequent terms arise solely through the exercise of options contained in that original agreement, the agreement will generally continue to benefit from the transitional protection and remain effective.

However, if there has been a material variation to the agreement after 10 February 2003, such as the addition of further renewal options or other changes that materially increase its duration, the agreement will no longer be treated as a protected pre-2003 agreement.

In that circumstance, the agreement would expire 10 years after the relevant variation, regardless of any purported exercise of options thereafter.

This principle was considered by Darke J in Australia City Properties Management Pty Ltd v The Owners – Strata Plan No 65111 [2020] NSWSC 1505. His Honour’s reasoning begins at paragraph 41 and includes the following observations at paragraph 50:

“…it is difficult to discern a legislative intention that where such an agreement is later varied so as to increase its duration (even substantially so), the agreement so varied should nonetheless continue to be protected from the strictures of s 40B(2), and exposure to challenge under s 183A on the basis of its duration. Indeed, that seems to me to be contrary to the evident aim of the amendments.”

Accordingly, the critical issue is whether the agreement has remained unchanged since before 10 February 2003, with only the exercise of existing options, or whether it has been materially varied since that date. The answer to that question will determine whether the transitional protection continues to apply.

This post appears in the August 2026 edition of The NSW Strata Magazine.

Paul Wiseman
Bannermans Lawyers
E: enquiries@bannermans.com.au