For some time now, there has been discussion amongst industry stakeholders about the need to simplify the assignment process. There have been proposals for creating an “industry standard” for new entrants, in particular the need to undertake specific training and to be appropriately qualified and the need to better understand the role of a resident manager and in particular the sometimes considerable extent of caretaking duties. We are confident that if these proposals reach fruition they will eradicate the undue time, expense and stress for all parties involved in an assignment, as well as cause new entrants to carefully consider if management rights is an industry for them before purchasing a business.
One of the other ideas discussed was to implement a transfer deed (or deed of assignment) that is acceptable amongst the majority of management rights and body corporate lawyers. We believe this proposal will play a significant part in reducing the difficulty of assignments for various reasons, some of which include:
- It will lessen the need to review and negotiate amendments between the lawyers for the parties which will lessen the costs involved (particularly for the outgoing manager);
- All parties will have an understanding of what is deemed an acceptable term of the assignment and what is not. This will minimise the likelihood of arguments occurring;
- There is a better chance that the assignment itself will be shorter in duration and the timeframe for settlement is more likely to be met on time; and
- It will drive lawyers predominantly acting for bodies corporate towards a fixed fee model where the review and advice of a deed of assignment should be consistent on each occasion.
Only time will tell if this proposal will be a success. While not all industry stakeholders have yet been informed of the recommendations or committed to the proposals, we are hopeful that they will become commonplace before too long. Each stakeholder plays an important role in upholding standards in the industry and it is far better for the industry if those entering it are aware of and are prepared to meet those standards. It is better for the industry that those who do not understand those standards, or do not want to meet them, do not become part of it. If the objectives of the new assignment process are met, we will all be better for it.